Bequests: The Foundation of Planned Giving

How many time has your nonprofit organization been surprised by a substantial bequest from "out of the blue"? Other than jumping up and down with glee and giving everyone in the office "high fives," what is your reaction after learning you are receiving this surprise gift? Do you ever stop to consider how nice it would be to know ahead of time that a donor plans to make such a significant gift? Wouldn't it have been nice to be able to say "Thank you" to that donor before it is too late? And wouldn't it help your organization plan for the future if you had a general idea about how much money might be available some day from these gifts?

It is probably not surprising that bequests are usually the foundation of most planned giving programs--regardless of how large or sophisticated the program may be. As much as we might enjoy the planning and negotiating involved with "sexier" planned gifts like charitable remainder unitrusts or charitable gift annuities, bequests will very often be the gift of choice for many donors who plan to give significant assets from their estates. Not only are bequests easily set up, they are commonly understood by the majority of donors.

One of the easiest ways to give a new planned giving program a kick start is to begin educating your donors about the importance of having a will and how they can continue their support of your organization through a bequest. Start a Legacy Society and inform your donors about how they can become members by simply letting you know that they plan to leave a bequest to your charity. There are several ways bequests can be styled, including:

The bequest of a specific dollar amount or the bequest of a specific asset.
The bequest of a percentage of the total estate.
The bequest of the residual estate after heirs and friends have received specific bequests.
A contingent bequest that names your charity in case the original designee predeceases the donor.

It is estimated than perhaps only about 30% of the people in the United States currently have a valid will. Do your donors know what will happen to their estates in Texas if they fail to make a will? Do your women donors understand the importance of having their own wills in this community property state? Recent statistics indicate that 90% of women in the United States will live alone at some point, either by choice, due to divorce, or because of the death of a spouse. Starting a bequest program is an excellent way to both educate your donors and give your charity a solid start in planned giving.

Here are some suggestions for getting started:

Use your newsletter to let people know you encourage bequests.
Include articles about how your organization has used bequests in the past to further your mission.
Purchase brochures (available from a number of vendors) that provide information about wills and offer them to your older donors. These usually can be personalized for your charity.
Have instructions available for donors about how to include your charity in a will. Be clear about whether you prefer unrestricted bequests or if you have specific programs that would benefit from bequests.
Segment your donors by age, and target market your Legacy Society to those between 60 and 80.
Consider giving members of your Legacy Society a certificate, pin, or other membership acknowledgement.

And please remember stewardship after the gift is as important, if not more so, to these future donors as it is to any of your other donors. Donors who have made the commitment of an estate gift to your charity have elevated you to the status of "family" according to Robert F. Sharpe, Jr. We should remember to treat them accordingly.