Planned giving is the process of donating contributions in the present allocated for a future date. It’s a wonderful way to intentionally plan ahead and, well, leave behind a legacy!
We recently conducted an in-depth study called Leaving a Legacy: A New Look at Today’s Planned Giving Donors. And some of our findings may surprise you.
According to Giving USA: The Annual Report on Philanthropy, legacy giving makes up only 9 percent of total giving in America. In fact, the largest group to give is individuals, followed by foundations, then bequests giving, and finally, corporate giving.
So why study planned giving?
I believe there is a significant opportunity to grow legacy gifts. And here’s why…
Studies show that there is soon to be a $59 trillion transfer of wealth. You read that right – $59 trillion!
We’re hearing this massive transfer of wealth will take place between now and 2061, primarily coming from the baby boomer generation. Think about the potential increase in revenue that number could represent.
In addition, according to recent surveys, only between 5 and 8 percent of current donors are presently making a planned gift. But one in three, or 33 percent of donors who were surveyed, said they would consider a planned gift.
So… if 9 percent of total giving in America is legacy giving, a massive transfer of wealth is coming, and if one in three donors say they would consider a planned gift, a huge opportunity lies before us.
Who exactly are these legacy donors?
Let’s talk about the profile of a planned giving donor.
1.They are planners.
Legacy donors are planners by nature. Almost 94 percent of respondents from this study had a will or trust. What this tells us is that they are deliberate in thinking about their future, their financial situation and how their assets will one day be transferred.
These donors are planning their future very carefully and a bit younger than you may think. In fact, most will write a will before the age of 60 and give their first planned gift around that same time.
2. They are purposeful.
Once in place, half of donors either do not alter their will, or if they do, they actually increase the amount that they give to an organization.
Factors such as an increase in wealth, marriage, or the birth of children all play a part in purposeful planning.
It’s also interesting to note that 80 percent of the respondents named multiple nonprofits as beneficiaries. Here we see how these donors are purposeful in terms of how they distribute their planned gift to various nonprofits.
How do they like to give?
A major takeaway from this study was the importance of making bequests the anchor offering of your planned giving effort.
Because the large majority of donors prefer to give a legacy gift through a bequest.
And not only that, 63.4 percent of donors said they would fund their gifts with cash or securities. In other words, mostly stock. They’re using their assets to actually fund their planned gifts.
The transfer is coming… so make sure your organization is ready to welcome these legacy donors to the table.
If you would like more insight into how legacy gifts can impact your organization, please check out Rick’s FREE Dunham Institute Course Leaving a Legacy: A New Look at Today’s Planned Giving Donors.
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