PROCESS AND PROFILE: Success Essentials for Nonprofit-Sponsored Charitable Estate Planning

DONOR-focusedWhen it comes to planned gifts and bequests to your organization, a standard consultant’s reply is that organizations “have not because they ask not.” However, it’s usually not quite that simple. If success were based simply on the number of asks, then success would be a lot more easily attained, and many more organizations would achieve it. Thompson & Associates makes thousands of requests each year on behalf of client organizations, and we have been very successful at acquiring gifts of net worth from organizational donors. However, the number of asks is only the third-most determining factor. Below are four things we have discovered about organizational donors and the essential elements of the Thompson & Associates’ profile and process.

If success were based simply on the number of asks, then success would be a lot more easily attained, and many more organizations would achieve it.

1. Even among an organization’s select donors, initially less than 5% have made a bequest or planned gift to that organization. Often there are none. That is true even among donors who have previously demonstrated genuine charitable intent; that is, those who give because they believe in the cause, not merely exchange gifts (i.e., “I’ll support your campaign, if you’ll support mine.”).

2. When organizational fundraisers ask donors to make a bequest or planned gift outside of an ongoing estate planning process, those donors have to gear up for a significant task.

a. If they have no estate plan, they first have to answer several fundamental questions about their heirs and their own needs. Some donors have put off addressing these questions far too long.

b. If they already have an existing estate plan, a lot of those charitable gift decisions have already been made. A planned gift request means altering or undoing a plan that has already been formulated.

In both cases, the request requires that donors deal with issues they have either been avoiding or would rather not revisit. Consequently, even for the organization’s true believers, agreeing to make a bequest or planned gift requires a lot more than simple generosity.

3. In our process, we deal with the fundamental questions every donor must ask before making a bequest or planned gift.

—Do you have enough to live on for the rest of your lives?

—How much do you want to pass onto your heirs?

—What method will be the most efficient for you, and will have the most positive effect?

—Would you rather transfer the remainder of your assets to the Internal Revenue Service or to local charities?

Fundraisers who encourage, or even allow, donors to skip this process are doing them a great disservice. Whether or not the donors have an estate plan in place, all those with significant assets are highly sensitive to these questions. Consequently, asking donors to make a bequest without addressing these questions can potentially alienate them. Some will kindly dismiss the request or tell you they’ll think about it — “it” being the answers to those questions. In some instances, you might hear them saying under their breath or even out loud, “How dare you?” See: HELPING DONORS ANSWER THEIR MOST PERPLEXING QUESTIONS.

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4. The result of the Thompson & Associates process is that 90% of those select donors with whom we meet decide to put the client organization in their estate plan. It’s not that we are more brilliant than the organization’s staff fundraisers. And, it is certainly not because we make a more persuasive appeal. In fact, we have never made an appeal on behalf of a client organization. We have been able to increase client organizations’ bequests among their select donors from under 5% to about 90% simply by focusing exclusively on the donors’ best interests.

BEGINNING WITH THE RIGHT PROCESS AND PROFILE
Twenty-five years ago, I talked to a well known professional in our industry about the company I wanted to start. I explained that our process would be completely independent and free of conflicting interests. I wanted to be the Jerry McGuire of charitable estate planning. The movie, Jerry McGuire, was the story of a sports agent who dreamed of working only for his clients’ best interests. In my dream company, client organizations would put us on retainer to serve their donors with regard to their estate planning needs and with strict non-disclosure agreements. In other words, we served only the best interest of the donors and would not reveal anything we discussed with the client organization. In my friend’s professional opinion, there were two insurmountable obstacles.

OBSTACLE #1: Nonprofits naturally want to know everything they can about the giving capacity of their donors. Some even hire firms to act like private investigators, snooping around in public records to create audits of donor assets. Nonprofits go to these extremes because:

a) because this information is hard to obtain and

b) because it is precisely the information donors do not want nonprofits to have.

Even among donors with deep ties to organizations and great relationships with their representatives, most will not be transparent about their assets and total net worth. In my friend’s opinion, nonprofits would never give us access to their key donors in order to discuss the intricate details of their finances when, in the end, we revealed nothing to the organization that hired us.

OBSTACLE #2: Nonprofits would naturally want us to fundraise for them. If organizations hired us to meet with their donors, they would naturally expect us make the case for estate gifts to their organization. It would be considered a golden opportunity and too good to let pass.

Despite the obstacles, in this proposed dream company, I had no intention of ever revealing anything about donors’ finances or representing the organization as a fundraiser.

My friend concluded with a final pronouncement, “Nonprofits will never agree to those terms.”

I replied, “The good ones will because they understand that great nonprofits are truly donor-centered.”

Even among donors with deep ties to organizations and great relationships with their representatives, most will not be transparent about their assets and total net worth.

Against his advice and conventional wisdom, we stuck to the plan and in 1994 started Thompson & Associates, Inc. What I have loved about our company from the beginning is that there have been no games, no gimmicks, no tricks. Our process and profile enable us to truly put donor needs first.

ATTEMPTS AT PARTIAL DUPLICATION
Recently, I agreed to meet with a financial professional wanting to duplicate what we have been doing in his state. If we are truly focused on donor needs, we don’t have to be so tight-fisted and protective with our process. There’s no big secret to what we do and how we do it. Though several individuals and companies have attempted to replicate the process by serving as charitable estate planning consultants, few, if any, have replicated the Thompson & Associates donor-centered profile. In other words, most other firms attempt to sell donor their products and services (legal fees, life insurance, etc). Others serve as contracted fundraisers for the organization.

FOLLOWING THE MONEY
As in all organizations, executive performance is largely influenced by incentives in the compensation package. But that doesn’t necessarily mean fundraisers have to be organizational-centered rather than donor-centered. See the story of “Fred, the Kindhearted” in THE GREATEST FUNDRAISER OF ALL In some cases, organizational staff can do as good, if not better, job than we can in securing donor bequests. BUT, it’s not simply due to the number of asks; it’s about becoming sincerely focused on donor needs and best interests.

Eddie Thompson, Ed.D.

Copyright 2014, R. Edward Thompson

 

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