Has Planned Giving Made It Into Your Nonprofit Organization’s 2022 Development Strategy?

Created By: Stephen K. Orr and Piper Hardin
March 14, 2022

As development professionals and nonprofit organization leaders, we likely feel the excitement that comes as the end of the year rolls around. Finalizing year-end gifts, sending acknowledgment letters, ensuring we have stewarded our donors properly, and strategizing with our development teams on a business plan for the new year. Before we know it, March is here, and we are off to the races! What strategies and processes made the cut this year? If planned giving did not make the top of the list for your 2022 development strategy, you may want to strongly reconsider your development team’s business plan.

Why do we say that? Let’s consider the facts:

• $67 trillion will be transferred to Gen X and Millennial children from their parents over the next several decades.
• $6.3 trillion will be transferred through charitable bequests (fancy word for legacy or estate gift).
• 90% of donor mortality will result in lost opportunity without efforts to generate planned giving.

Legacy gifts or planned gifts will be among the largest gifts your nonprofit organization will ever receive, so if you don’t have a plan in place to accept these types of gifts then you are leaving money – and donor affinity opportunities – on the table. The ROI Is evident – according to Planned Giving Today (March 2017), for every $1 you spend marketing and implementing a planned giving program, your return on investment is $56.93. It would be hard to believe that your major gifts program isn’t in full swing. So, why wouldn’t your planned giving program be just as robust? According to this same article, for every $1 spent on major gift development efforts, the return on investment is half that of planned giving ($33.33 to $1).

Even amidst a global pandemic, over $41 billion was given via legacy gifts in 2021 (an increase of 10.3% from previous years). The number of new donors increased during the COVID pandemic, and young, more diverse donors set the trend. According to a 2021 Wills and Estate Planning Study, younger adults are also leading the way in estate planning, proving more likely to have a will than middle-aged adults.

Trends to keep in mind as you build your 2022 Planned Gifts development strategy include:

• 63% more young adults created a will in 2021 than in previous years
• Young adults aged 18-34 are more likely to have a will than 35–54-year-olds, as of 2021
• The overall percentage of Americans with a will has not significantly decreased, despite COVID-19
• Giving USA (2019) found that only 38% of donors reported telling an organization that they were included in their planned giving
• Studies conducted by Dr. Russell James, J.D., Ph.D., CFP, and professor at Texas Tech University show that donors who have included a nonprofit in their estate planning increase their annual giving to that same organization by 75%

Going into 2022, confidence in planned giving potential is higher than membership gifts, events, foundation support, corporate giving, direct marketing, or government funding/grants. Despite this, most nonprofit organizations are not increasing their planned giving fundraising efforts or strategy. Perhaps this is because planned giving expertise rates as the lowest area for funding staff expertise. How can we ensure nonprofits capitalize on the planned giving fundraising growth expected in 2022 and that they are prepared to offer donors the opportunity to leave a lasting legacy? Many forward-thinking nonprofits are choosing to supplement their fundraising staff with external consultants and partners. Recognizing these trends for growth, and because we are in the business of philanthropy, Orr Group, like other firms, has put a strong team of knowledgeable planned giving professionals in place.

Below are the needs of the industry based on Orr Group’s research and ways your organization can develop and implement a planned giving strategy in 2022:

• Planned Giving Strategy: To effectively realize planned giving potential and engage your top planned giving prospects, you need a strategy unique to your prospect pool and your organization’s planned giving offerings.
• Planned Giving Program Management: 90% of donor mortality will result in lost opportunity without efforts to generate planned gifts. Your organization must have the resources and systems in place to not only cultivate and solicit planned gifts but also steward those donors with planned gift commitments.
• Planned Giving Administration: The logistics of entering and tracking planned gifts and coordinating with third-party estate contacts can be time-consuming, but it is a critical element to realizing planned gifts.

In 2020, Americans gave $471.44 billion to charitable organizations – a 1.05% increase from 2019. Nonprofit organizations that include a detailed and consistent planned giving strategy are the leaders of the pack, and they stand to reap substantial rewards over the next seven to ten years. Don’t get left behind. Outline your planned gift acceptance policy, marketing plan, legacy program, stewardship policies, and get your board, volunteers, and current donors involved. To learn more about how to create a planned giving strategy so your organization doesn’t get left behind, contact one of our planned giving experts.