initiating the legacy conversation and getting to the ask planet philanthropy 2015 june 7-9, 2015...

Initiating The Legacy Conversation And Getting To The Ask

Planet Philanthropy 2015

June 7-9, 2015

The Hyatt Regency in Jacksonville, Florida

Jonathan Gudema, Esq., Principal, Planned Giving Advisors LLC

What we’ll cover today

Why Legacy Giving for your organization?

Who do you need to be initiating conversations with?

What do you need in place to get started?

What are the key concepts for legacy conversations?

How do you prep your prospects?

How do you start the actual Legacy conversation?

How do you lead initial conversations to a closed gift?

2

Why Legacy Giving for your organization?

America is aging

So is your database!

Baby boomers are moving into retirement years

Generation X’ers and Y’ers are not poised to replaced their contribution dollars

3

The Future of Nonprofits

4

Planned Giving Endowments Long-Term

Viability

The Future of Nonprofits

5

“…over-reliance by nonprofits on just “keeping the lights on” is a short sighted strategy that steadily erodes the long-term survival of the organization. As important as annual giving campaigns are in the fundraising practices of the nonprofit sector, developing a steady stream of sustained long-term financial security deserves at least equal – if not the greater – priority.”It Matters…But Is It Working? A White Paper Series on Our Region’s Nonprofit Sector Fiscal Health & Sustainability The Philadelphia Foundation, July 2010

Charitable Bequests represent Since

1971

7.7%

Revenue Potential

Of all U.S. Fundraising

6

IRS data over 10 years (1987-1997) showed that

On average

left2.7

times their

lifetime charitable

giving in their estates

Revenue Potential

Estate tax payers who left

charitable bequests

7

So-Called Giving Life Cycle

Annual Giving

Major Giving

Capital Giving

Legacy Giving

8

Reality

Annual Giving or Major Giving

Legacy Giving

9

Why Planned Giving?

10

100

150

200

250

300

350

Inflation Adjusted U.S. Giving 1972-2013$ in billions

Inflation adjusted dollarsSource: Giving USA 2014

What changed

?

Why Planned Giving?

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2.2%2.4%

1.9%

11

Individual Giving as a Percentage of Disposable Personal Income

Adjusted for Inflation, in current DollarsSource: Giving USA 2014

Why Planned Giving?

12

100

150

200

250

300

350

Inflation Adjusted U.S. Giving 1972-2013$ in billions

Inflation adjusted dollarsSource: Giving USA 2014

2011 Oldest Boomers Age

65 Youngest Boomers

Age 47

1991 Oldest Boomers Age

45 Youngest Boomers

Age 27

Why Planned Giving?

70,000

90,000

110,000

130,000

U.S. Non-Farm Employment 1972-2013

13

in thousands

Source: U.S. Bureau of Labor Statistics

Rhode Island

Alaska8.1%

Washington

Oregon

California

Nevada

Idaho

Montana

Wyoming

Colorado

New MexicoArizona

Texas

Oklahoma

Kansas

Nebraska

South Dakota

North DakotaMinnesota

Wisconsin

Illinois

Iowa

Missouri

Arkansas

Louisiana

Alabama

Tennessee

Michigan

Pennsylvania

New York

Vermont

Georgia

Florida 17.8%

Mississippi

Kentucky

South Carolina

North Carolina

MarylandOhio Delaware

Indiana West Virginia

New Jersey

Connecticut

Massachuttes

Virginia

New Hampshire

Why Planned Giving?

Hawaii

Source: U.S. Census Bureau

13.0 % of US Population Over 65 -- 2010

Utah

5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+

Maine

14

Rhode Island

Alaska

Washington

Oregon

California

Nevada

Idaho

Montana

Wyoming

Colorado

New MexicoArizona

Texas

Oklahoma

Kansas

Nebraska

South Dakota


Wisconsin

Illinois

Iowa

Missouri

Louisiana

Arkansas

Alabama

Tennessee

Michigan

Pennsylvania

New York

Vermont

Georgia

Florida 19.5%

Mississippi

Kentucky

South Carolina

North Carolina



New Jersey

Connecticut

Massachuttes

Virginia

New Hampshire

Why Planned Giving?

Hawaii


14.5% of US Population Over 65 -- 2015

Utah10.1%

5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+

Maine

15

Rhode Island

Alaska

Washington

Oregon

California

Nevada

Idaho

Montana

Wyoming

Colorado

New MexicoArizona

Texas

Oklahoma

Kansas

Nebraska

South Dakota


Wisconsin

Illinois

Iowa

Missouri

Arkansas

Louisiana

Alabama

Tennessee

Michigan

Pennsylvania

New York

Vermont

Georgia

Florida 21.8%

Mississippi

Kentucky

South Carolina

North Carolina



New Jersey

Connecticut

Massachuttes

Virginia

New Hampshire

Why Planned Giving?

Hawaii



Utah11.4%

5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+

Maine

16

Alaska

Washington

Oregon

California

Nevada

Idaho

Montana

Wyoming

ColoradoUtah

12.6%

New MexicoArizona

Texas

Oklahoma

Kansas

Nebraska

South Dakota


Wisconsin

Illinois

Iowa

Missouri

Arkansas

Louisiana

Alabama

Tennessee

Michigan

Pennsylvania

New York

Vermont

GeorgiaMississippi

Kentucky

South Carolina

North Carolina



New Jersey

Connecticut

Massachuttes

Maine

Rhode Island

Virginia

New Hampshire

Why Planned Giving?

Hawaii


5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+

Florida 24.7%

17


Alaska

Washington

Oregon

California

Nevada

Idaho

Montana

Wyoming

ColoradoUtah

13.2%

New MexicoArizona

Texas

Oklahoma

Kansas

Nebraska

South Dakota


Wisconsin

Illinois

Iowa

Missouri

Arkansas

Louisiana

Alabama

Tennessee

Michigan

Pennsylvania

New York

Vermont

GeorgiaMississippi

Kentucky

South Carolina

North Carolina



New Jersey

Connecticut

Massachuttes

Maine

Rhode Island

Virginia

New Hampshire

Why Planned Giving?

Hawaii


5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+

Florida 27.1%

18


Why Planned Giving?

19

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

0

50

100

150

200

250

300

350

400

450

Non-Bequest $ Bequest $$ in billions

1996 – Oldest Baby Boomers reach age 50


Source: Giving USA


Who do you need to be initiating conversations with?

Who are most likely to include your nonprofit in their estate plans alongside family and loved one?

Long-term givers or volunteers?

Alumni or beneficiaries of your services?

Retired staff or local community?

Who are the people you can identify who have the highest likelihood to go from supporter/friend to family/legacy?

20

Top Ten Predictors of Charitable Bequests

I. # years giving

II. No offspring

III. Highest levels of giving

IV. Funded living trust

V. Female

VI. Last reported wealth

VII. Not married

VIII.Last reported giving

IX. Growing wealth

X. # years volunteering

Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 201421

Who Leave Charitable Bequests?Data Confirms that Wealth Ranked Donors Are Strong

Prospects

22

% LeavingCharitable Bequests

PopulationSegment

4%-5% Everyone

10% Givers of $500 or more annually to charities

20%Moderately wealthy

passing away with $3.5 million to $10 million

28%Pretty wealthy

passing away with $10 million to $20 million

40%Very wealthy

passing away with over $20 million in assets

Sources: IRS Data as reported in Giving USA 2012, Russell N. James III, J.D., PH.D.

Boomers Differ From Their Predecessors

Think about the differences between those age 68 and younger versus those just a few years older…

Women’s liberation movement

Women started having more successful careers

Having children later, if at all

Much higher divorce rates

Generally smaller families

23

1998 2000 2002 2004 2006 2008 2010 2012p5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

GrandchildrenChildren onlyNo Offspring (unmarried)No Offspring (married)

U.S. Pop. Age 55+ Charitable Estates Among Those With Will or Trust by

Family Status


U.S. Childlessness Rates Women Ages 40-44

1970 (85-89)

1975 (80-84)

1980 (75-80)

1985 (70-74)

1990 (65-69)

1995 (60-64)

2000 (55-59)

2005 (50-54)

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

8.6%

10.2% 10.1%11.4%

16.0%

17.5%

19.0%

20.4%

25

Current Ages:

Baby Boomers!

Source: U.S. Census Bureau/U.S. Bureau of Labor Statistics

What Wealth Transfer?

1920

(age

95)

1923

(age

92)

1926

(age

89)

1929

(age

86)

1932

(age

83)

1935

(age

80)

1938

(age

77)

1941

(age

74)

1944

(age

71)

1947

(age

68)

1950

(age

65)

1953

(age

62)

1956

(age

59)

1959

(age

56)

1962

(age

53)

1965

(age

50)

1968

(age

47)

2,300,000

2,500,000

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

26

Current Age:

Birth Year:

# U.S. Births

Boom

Years

Bu

st

Years

Today’s PG $

Today’s PG

Prospects!

Source: U.S. Census Bureau/U.S. Bureau of Labor Statistics

What do you need in place to get started?

Legacy society or other “tool” for initiating conversations

Clear reasons why supporters should want to take this big step

Staff and board commitment to long-term nature of planned giving

Campaign or other time incentive for pushing people to commitment

27


Less than 50% of Americans have any estate planning documents

And that percentage is increasing with Baby Boomers!

Why is there such a big gap between donor and bequests donors?

Generally, only about 10% of your decent donors will include your org in their estate plans

What about our big planned giving failures?

How many times do we see boards refusing to push planned gifts among its members?

How many times have seen beautiful planned giving mailings produce barely any response from a clearly ripe audience!

28

Seminar Tonight:Estate

Planning

What you see

Seminar Tonight:

Your Upcoming

Death

What the subconscious sees


What is 1st-stage defense to death reminders/one’s mortality?

AVOIDANCE (1st stage defense)

Distract

Differentiate

Deny

Delay

Depart

How do we sidestep avoidance?

30 Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013

Brain reaction studies confirm:


How do we sidestep avoidance?

Donor organ donation question in Europe:

Opt-in – Want to donate your organs? MOST SAID NO

Opt-out – Want to opt out of organ donation program – MOST SAID NO

How about mixed packaging?

Help us secure our future good works (like we are doing today) through joining our Legacy campaign (or society or whatever)

Try sidestepping direct death reminder with carefully designed Legacy message that emphasizes other things besides direct death reminders




In any case, it may not be us who have to break through 1st stage avoidance

It could be:

Illness

Injury

Advancing age

Death of a family member

Intentionally planning for one’s death through estate planning

Keep in mind that your prospect may already be beyond 1st stage avoidance



2nd stage defense to death reminders:

Symbolic immortality

Supporting and being remembered by one’s surviving “in-group”

I will die, but my values, beliefs, story will live on, through my influence and support of my “in-

group” [family, interest group, community]

Autobiographical Heroism

Symbolic Immortality

COMMUN I TY

VALUES

Will live beyond them

Something reflecting

the person’s life story

(community and values)

Permanence is psychologically

attractive

H


Bequest decision making emphasizes “visualized autobiography” brain regions

Bequests to friends/family engage “memory and emotion” brain regions more than charitable bequests

2nd-stage defense to death reminders is to seek symbolic immortality or “autobiographical heroism” by supporting one’s “in-group” community

Some part of one’s self – one’s name, family, community, achievements, values, goals, etc… – will persist after death.

Leave a Legacy that will be remembered




Tell life stories of donors who will live beyond their death through bequest giving – PREFERABLE FROM LIVING INDIVIDUALS

Remind donors of life story connections of friends/family with the charity/cause through tribute bequest opportunities

Emotion and memory stronger with family/friends

Connect that emotion/memory to a your prospect’s legacy gift

“Permanence” bolsters the message




Add something to get prospects from YES to NOW

Time limits

Matching gift time limit

Campaign time limit

Participation time limit






Visualized Biography

Family Emotion

AvoidanceSymbolic

Immortality

Life Stories

Tribute Bequests

Mixed Packaging

Bequest Permanenc

e

1 2 3 4

Top ten factors that triggered charitable addition to estate plans:

1. Approaching death

2. Becoming a widow or widower

3. Diagnosed with cancer

4. Decline in self-reported health

5. Divorce

6. Diagnosed with heart problems

7. Diagnosed with a stroke

8. First grandchild

9. Increasing assets

10. Increasing charitable giving

7 out of top 10 triggers for adding charity to estate plans relate to

addressing one’s mortality!

39 Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014

Top ten factors that triggered REMOVING charities from estate plans:

1. Decline in self-reported health

2. Approaching death

3. Becoming a widow or widower

4. Divorce

5. Diagnosed with cancer

6. Diagnosed with heart problems

7. Diagnosed with a stroke

8. First grandchild

9. First child

10. Exiting homeownership


The same 7 out of top 10 triggers for adding charity to

estate plans relating to one’s mortality were the same for

REMOVING charities!

40

When To Start The Conversation

Mid-30s to 50

Climbing Early Acquisition Phase

• Annual giving• Recruitment for future leaders

50s to Early 60s

Top of Hill Late Acquisition Phase

• Major gifts• Leadership positions

60s to Mid 70s

Retirement Planning Early Preservation Stage

• Campaign/planned gift combo• Estate plans are formulating

Late 70s and up

Health Concerns, Legacy Late Preservation Stage

• Annual/major giving slows down• Keep involved and keep in estate

41

How do you prep your prospects?

Messaging done properly works

Announcements and updates at board meetings and other events

Articles in publications about “heroic” planned giving donors

Anything that creates any extra sense of urgency

42

How do you start the actual Legacy conversation?

Prep in form of updates, marketing, etc.. has happened

Get in-person meeting

Bring another legacy donor, if applicable

If possible, have other legacy donor share why they made his/her legacy decision

Any non-death reminder incentives would be great!

43

Frame Conversation Around Legacy

Conversations must be about your prospects’ personal LEGACY

Not about their deaths

Can we tap into their nostalgic org-connected memories through initial chit-chat?

How can we ensure that we can continue our mission for the next generation?

Not about how we need your bequest today

Have you thought about your own legacy with this org/community?

What kind of legacy do you picture for yourself?

44

Initiating The Conversation

Goal: Introducing the idea and starting the conversation

Your goals: simply communicate the legacy case (legacy elevator pitch?) and get your prospect thinking about their legacies (these take months, if not years, to develop!)

Have a “legacy” opener ready that challenges your donor to think about his/her impact beyond their live(s)

Have you ever given thought to your own legacy with ….?

Also decide in advance what you are asking the prospect to consider

Would you consider being a founding member of our Legacy challenge?

Gauge the response for continuing the conversation

45

Your Legacy Case Statement

Why a legacy case statement?

Website and other communications

A call to action

Articulation of the reasons why your institution’s members, friends, alumni, etc.. should include your organization in their estate plans

46

Your Legacy Case Statement

Different than your organization’s case statement for giving

Your case for giving today should emphasize what you are accomplishing today and in the near future

Your legacy case emphasizes how your donors’ legacy giving can ensure the future of the institution

Elements of a legacy case statement link:

Past experiences/benefits/memories (words or imagery)

With current success

And need to secure the future

Challenge for your donors’ to establish their own personal legacy

47

Making The “Ask”

Your goal is to ensure that the prospect knows that he/she has been asked to do something

Don’t expect an answer on the spot

Write a game plan and script for yourself, other staff and volunteer solicitors

Know how you are going to start off the conversation

Have an idea of what you will say to transition the conversation towards an ask

Have your ask memorized and ready to go

Put the ball in your prospect's court and listen

Gauge the response for continuing the conversation

48

Training Yourself

No training replaces just doing it

In person meetings are a must

Never be overly aggressive

But make sure your prospect at least knows he/she is being asked to consider joining the legacy effort

Start with getting the commitment to the idea (details not needed now)

Build into your efforts follow-up for later years for more details

49

Initiating The Legacy Conversation And Getting To The Ask

Planet Philanthropy 2015

June 7-9, 2015

The Hyatt Regency in Jacksonville, Florida

Jonathan Gudema, Esq., Principal, Planned Giving Advisors LLC

initiating the legacy conversation and getting to the ask planet philanthropy 2015 june 7-9, 2015...

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