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Planned-Giving Programs & the Small Nonprofit: Getting Started - Part One

NOTE: This is Part One of a four-part cover story from the September/October 2002 issue of Advancing Philanthropy.

Parts 1 | 2 | 3 | 4 | Full Version

Planned giving today isn't the domain solely of large nonprofits that can afford to hire financial and legal specialists. Many small nonprofits with one or two fundraising professionals are launching successful programs or expanding their informal efforts; those who aren't sure whether such programs are feasible for them will find many resources from the Association of Fundraising Professionals and others to help with the decision.

The trend toward greater use of planned-giving models is relatively recent. Frank Minton, a planned giving specialist for more than 25 years and president of Planned Giving Services in Seattle, estimates, "About 5,000 nonprofits have gift-annuity programs, about a third of them started within the past 5 years, and half within the past 10 years. Many more nonprofits have long-term giving programs."

"There's been a greater emphasis in the past few years on nonprofits wanting to build endowments, and planned gifts are a way to do that," Minton says, explaining the increase. "And demographics tell us that the population is aging and a concentration of wealth will soon change hands."

This overview suggests the opportunities that a planned-giving program can bring and outlines the planning necessary for launching one.

'The Time Couldn't Be Better'

No data exist for the total amount of all planned gifts in the United States, but Giving USA estimates that bequests brought in $16.3 billion--about 8 percent of total contributions--in 2001. (This represents a decline from 2000 that is attributable to stock market losses.) With the coming transfer of wealth, we can anticipate the increased attractiveness of planned giving vehicles generally to the large cohort of older U.S. donors. "The time couldn't be better to set up a planned giving program," says Richard D. Barrett, coauthor of Planned Giving Essentials. "It's a cost-efficient way to raise funds."

Gift annuities, gifts of life insurance, bequests, charitable remainder trusts, pooled income funds, and many other planned gift options exist. Their rather daunting names make planned giving sound complicated and may deter a fundraising professional from taking the plunge. But Tanya Howe Johnson, executive director of the National Committee on Planned Giving, says knowing the limits of your expertise shouldn't stop you. "Development generalists should learn the basics, but don't get hung up on the complexities of the instruments. Leave that to the appropriate professionals, such as attorneys, accountants, and other gift planning experts," Johnson recommends.

Fortunately for smaller nonprofits, the simplest planned gift to administer is also the most prevalent: a bequest left to a charity in a will to be administered after the donor dies. According to Minton, most U.S. nonprofits find that 70 to 80 percent of their planned-gift dollars come in the form of bequests. Kayla Stevenson, CFRE, chair of the Canadian Association of Gift Planners, reports that bequests represent more than 95 percent of planned gifts in Canada. And, she says, "Planned giving is gradually growing in Canada among small nonprofits."

Go to Part Two»





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