Kristen's Blog

Planned Gifts Marketing Success Story: University of Colorado Foundation

2012-01-09T16:18:00.001-08:00

I hear inspiring stories each week about how charities are multiplying their planned gifts, despite the economy. In the next two months, I plan to share these stories of organization who have found new ways to market smarter, better and more effectively. I want to share their best strategies and the ideas that have shaped their planned giving programs. I hope that you gain new insights from these successful charities as you consider your organization's planned gifts marketing efforts for 2012.

Kristen Dugdale, Vice President for Gift Planning at the University of Colorado Foundation (CU), was one of the most popular speakers on bequests at the 2011 Practical Planned Giving Conference (PPGC). I had the opportunity to talk with Kristen this week about the growth of CU’s bequest program.

Kristen said that a lot of what CU has done is to try to increase the profile of bequest giving on campus and with alumni. Most organizations receive the majority of their planned gifts in the form of bequests, but few organizations are out talking about bequests. For a long time, CU thought that if it could equip its development officers (who are out talking with donors on a daily basis) to discuss bequests, this would multiply bequests for CU.

Kristen talked with me about how she made the case for bequest giving with upper management at CU. She started by tracking when existing bequests were going to mature based on life expectancy. She was able to institute a regular report with the bequest pipeline to give the organization a solid visual of bequest expectancies. When she explained the impact of bequest giving to CU by showing that bequests were actually 10-11% of the organization’s business, the President of the Foundation was sold.

Once CU’s senior management saw the value of bequests it began to set goals for development staff to enter into the bequest discussion. Staff members were encouraged to begin requesting copies of the wills of those who made bequest commitments. They typically explain to the donor the importance of verifying that will language is appropriate to ensure that the donor’s wishes are carried out. They created a full package for the donor with information illustrating how their gift would be used.

As a result of this enhanced marketing effort, CU increased bequests by 700% in the first year of marketing. In the first year CU booked 25 million in bequests and 33 million in new bequest intentions the following year. Bequest giving never makes the Denver Post –but this story was so big for CU even the Post picked up on the bequest commitment increase of 700%. Kristen was not only encouraged by the good press but also the fact that upper management increased her bequest marketing budget!

Kristen told me that CU now has a $17.3 million estate pipeline coming through for the Foundation. She regularly reports on distributions from the pipeline to provide ongoing support for her case that bequests make a difference. The Dean and President of the University now also talk about bequests, because they see how important bequests are to CU.

Making bequests a priority for the organization is key to the success of your bequest program. Because so many institutions don’t focus on revocable gifts, your organization can miss out if it's not talking about bequests. To learn more about creative strategies for marketing bequests to your donors, call 1-800-858-9154 and ask to speak to a marketing specialist.

Integrating Your Planned Gifts Marketing to Maximize Effectiveness

2012-01-05T16:27:00.000-08:00

In my last post, I discussed ways to market bequests using primarily print marketing efforts. In this post, I want to touch on how to integrate these efforts with your web, email and social media bequest marketing.

A growing number of your planned giving donors (boomers and seniors) are using websites and social media to obtain information about your organization that influences their giving patterns. How well you integrate your website with all your other marketing activities will impact the success of your future campaigns.

Marketing expert Karen Marchetti has a lot to say about tying together all of your marketing efforts in a campaign. She recommends that organizations set up a landing page every time they launch a new campaign. Karen says that your landing page should repeat the messaging and the design “look” from your print campaign.

Your web marketing for bequests should match your print marketing pieces in look, colors and feel. When people view your website, it should trigger their memory of your postcard on bequest giving and vice versa. Similarity and repetition will help reinforce your bequest marketing message.

Karen says it is also important to feature your campaign messaging and integrated design on your homepage. While you may have secondary web pages dedicated to bequest or gift annuity marketing, make sure to advertise these gift opportunities through links, hyperlinked images and message boxes on the front page of your planned giving website. Also drop images on Facebook from web and print marketing pieces as reminders to fans of your efforts and a way to drive supporters to your site during the campaign period.

Remember to include short URLs on all of your marketing pieces to bring readers directly to your campaign landing pages and homepage. You can create special URLs that drive users to information and action items relevant to your campaign. For example, some organizations will want to take users directly to bequest language. Others will engage readers by dropping links on social media to downloadable forms where donors may acknowledge bequests and join the organization’s legacy society.

Whether you are going to begin your 2012 marketing focused on bequests or gift annuities, integrating your efforts will enable you to reach the most comprehensive group of supporters. For more strategies on integrated planned gifts marketing, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

How to Ask for Bequests

2011-12-28T16:13:00.000-08:00

I recently read an article written by fundraising guru Jerry Panas on the topic of bequest marketing. Panas offered a number of simple ideas for making the bequest ask. To do this, he recommends that charities create a multi-channel, systematic messaging process.

Here are some of Panas’ ideas that might be adopted for your organization’s bequest marketing efforts:

Send a letter once a year to everyone on your mailing list inviting them to make a bequest to your organization. Panas says that the best marketing pieces focus on how bequests impact the mission of the organization. So, don’t be afraid to contact donors and ask them for permission to share their stories. Also, add images of your work to illustrate how giving can help your organization accomplish its purpose.

Every publication produced by your organization should include at least one bequest marketing piece Panas says. This makes sense when you consider that over 90% of planned gifts are bequests, according to research by Target Analytics, a Blackbaud Company. Because bequests are the most popular and often easiest planned gift to make, they should be marketed regularly and in a way that Panas says “will attract attention.”

Include a postscript in all gift acknowledgement and substantiation letters with a standard bequest message. For example, Panas suggests this language: “Another way to strengthen our service to this community is a charitable bequest. Please remember us in your will or living trust.” This short and simple two sentence message is used as a way to attract attention and encourage bequest giving.

Standard bequest language should also be included in fundraising brochures and literature, as well as planned giving websites. Panas suggests standalone phrases that encourage bequests such as “Remember us in your will or living trust,” or “A charitable bequest is an excellent way to create a lasting memory.” Including phrases like these reminds your readers that bequests are just another way they can benefit and help your organization continue its work.

While it’s important to include bequest language in your print marketing, all of your marketing must be integrated. This means that your print marketing should match (in colors, look and feel) and work together with your web, email and social media marketing. In my next post, I will discuss the importance of integrating your marketing activities for maximum effectiveness.

To learn more strategies for marketing bequests, call 1-800-858-9154 and ask to speak to a marketing specialist.

How to Build a Professional Advisory Committee for Planned Gifts -- Part Two

2011-12-21T09:32:00.000-08:00

This is my second post on building a professional advisory committee for planned gifts. I wanted to share with you more ideas on how to build your own advisory group based on the thoughts of expert fundraiser Diana Dunbar, Development Director of the Ventura College Foundation in Southern California.

Since professionals who are committed to your cause can also be helpful in connecting you with potential donors, building an advisory committee is a great way to grow you planned giving program. Once you have identified professionals who may be interested in getting involved with your organization, you need to make contact and “make the ask.” Here are a two more ideas from Diana:

Make Contact – Once Diana has identified a prospect, she will usually call and ask if she can schedule a meeting. She will begin by identifying herself, tell them that she would like to discuss the work of the organization and always note how a relationship may be of help to them (i.e. help them grow their client base). She is always clear that she will stay for no more than 30 minutes and she sticks to this promise.

Visit and “Ask” – During her visit, Diana provides the advisor with the organization’s latest report or a simple gift. She explains that she is starting a committee of advisors and emphasizes how his or her participation could help the advisor and the organization.

At the end of a visit Diana says that she can usually assess the advisor’s level of interest. Some individuals are willing to commit right away while she will follow-up with others who are receptive at a later date.

One way to encourage advisors to get involved with your charity is to give them a platform to share their expertise. You might consider inviting an attorney to speak to your donors on wills or estate planning or a life underwriter on insurance arrangements. For more ideas on building your professional advisory committee, contact Crescendo at 800-858-9154 and ask to speak to a marketing specialist.

How to Build a Professional Advisory Committee for Planned Gifts

2011-12-15T15:21:00.000-08:00

I recently heard Diana Dunbar, Development Director of the Ventura College Foundation speak about building a professional advisory committee for planned gifts. Building a group of professionals who can advise and counsel you on the intricacies of a particular gift is important to your credibility with donors, particularly the more sophisticated donors. Professionals who are committed to your cause can also be helpful in connecting you with potential clients who share their commitment and are willing and often eager to make planned gifts.

Here are two ideas from Diana on how to build a professional advisory committee for your organization:

Identify Prospects– Many professional groups in your community meet on a monthly basis. Plan to attend the local estate planning or CPAs luncheon and get to know professionals in your community. Obtain a roster from these groups and identify individuals with institutional interests, a prior gift history or connections that would make them valued members of your committee.

Develop Strategy – You need to determine your communication strategy in advance of meeting prospective committee members. How will you explain your mission? The cause has to affect/impact the professional you are trying to reach or they won’t be interested. So, you need to think about each prospect individually and how you might appeal to their personal desires, business needs and goals.

Once you have identified your advisory committee prospects, you will want to begin making contact to “ask” for their involvement. Read my post next week for ideas on making contact and encouraging advisors to participate in your organization’s planned giving program. To learn more top strategies for reaching advisors and donors for planned gifts, call 1-800-858-9154 and ask to speak with a marketing specialist.

How to Find Your Best Planned Giving Prospects

2011-12-08T15:30:00.000-08:00

Planned giving prospects and donors are easier to find than you may think. The most obvious place to look is in your database. Individuals who have already made planned gifts to your organization are likely to make planned gifts again. In a prior post, I discussed the evidence of repeat gift annuities and bequests among donors who have already established life income gifts.

I recently met with a group of individuals that prospect for bequests from donors to major colleges and universities. Their strategy is to target annual donors (often alumni and family members of alumni) for planned gifts. This makes a lot of sense when you consider that individuals who have given consistently to you over a number of years have made an “investment” in your organization. They are among your best prospects for making a bequest or other testamentary gift because of their demonstrated commitment to your mission.

Your better prospects will be identifiable based on your institution type. For example, if you are a hospital or medical center, you will want to identify former patients, family members of former patients and others who have benefitted in the community from your services. If you are an arts organization, anyone who has joined your arts council, purchased tickets to a series or exhibits, volunteers regularly or supports your work would make for a good prospect.

What differentiates a planned giving prospect from any other donor prospect? A planned giving prospect will be able or willing to give you more than just a current cash gift. They will be open to engaging with you and building a relationship as part of an ongoing planning process. Good gift planners will tell you that these relationships develop into personal connections that often last for life.

The individuals you meet with for planned gifts will often have very specific lifetime goals. In a personal visit, they will open themselves naturally to a legacy gift through their conversation with you. As you build a relationship, you will have the joy and privilege of presenting ways in which your supporters’ dreams can be achieved, turning mere prospects into donors and lifetime friends.

To learn more about identifying your best donor prospects for planned gifts, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

How to Build Support for Your Planned Giving Program

2011-11-30T11:59:00.000-08:00

I heard a recent presentation by Marc Wilde, Director of Development for Livingston Memorial VNA. Marc shared with the group some of the challenges he faced when starting a planned giving program and how he made the case for planned giving at his institution.

Whether you are starting a new planned giving program or justifying the existing one to your CFO, Marc shared two good insights on how to encourage decision-makers to buy-in to planned giving:

Obtain the Support of Your Board

Your board members need to be on-board with planned giving. Because planned giving is not a familiar concept to most, it is important to educate your board members on the benefits of planned gifts. You want your board to not only understand why planned gifts can help your organization grow its annual income and endowment, but also be able to identify potential donors and begin the planned giving conversation. The new GiftCollege for Boards of Directors is a good resource for you as you encourage your board to think about offering planned gifts. Call Crescendo at 1-800-858-9154 to learn more about this training for your board.

Gain Expert Assistance

Marc shared that when he was making the case for planned giving to his CFO and board, he brought in someone from the local community foundation to talk about reasons why the hospital should offer planned gifts. It is often difficult for charities to understand why they should invest in a strategy that will not produce current income. Providing your decision makers with an “expert” can be helpful in explaining the successes of similarly situated charities with mature planned giving programs and projections for your organization’s future success. Consultants can also be useful in this process.

If you are thinking about getting started in planned giving or just growing your existing program, making an effective case to your decision-makers is key to your planned giving program’s success. It is important to point out that you can raise significant annual income through planned giving. Mature planned giving programs with a pipeline of gifts can generate 15%, 25% and even more than 50% of annual revenue from planned gifts.

If you need assistance with just getting started with planned giving or growing your planned giving program, Crescendo can help. Call 1-800-858-9154 and ask to speak to one of our planned giving specialists who can help you craft a plan to meet your organization’s goals.

ACGA Announces New Lower Gift Annuity Rates

2011-11-18T10:11:00.000-08:00

The Board of Directors of the American Council on Gift Annuities (ACGA) announced that gift annuity rates will change on January 1, 2012. The new rates will be 0.5% to 0.8% lower than the previous schedule. To view the new rates, please click here.

The primary factor in reducing the rates is a lower yield on the ten-year Treasury bond. During the past year, the yield changed from 3.3% in January to below 2.0% in October. With the ongoing issues over the Euro, there is a continued cash "flight to safety" of Treasury bonds. Because the ACGA gift annuity reserve portfolio assumes 40% equities, 55% bonds or fixed income and 5% cash, a reduction in bond yields changes the total assumed return.

The new assumed return will be 4.25% with a 1% load, for a net return of 3.25%.The new rates will pass the Sec. 514(c)(5) minimum 10% charitable deduction test. The rates maintain the 50% residuum and 20% present value requirement. The top rate for a single life gift annuity for persons age 95 and older is 9.0%.

Editor's Note from Charles Schultz: In a time of great changes in interest rates, the ACGA Board has been responsible in updating rates. While everyone hopes that rates will be stable for the future, it is important for both donors and charities (who will receive the residuum) that gift annuity rates are fair and realistic. With the continued low CD rates, 2012 gift annuities for our senior friends are extremely attractive.

Open Doors from Your Donors that Lead to Gifts: How is Your Fundraising Going?

2011-11-09T16:32:00.000-08:00

This is the third in my series of posts on statements to listen for from your donors that open the door to a planned giving conversation. Here is the third of fundraiser Sister Lesa Megaffin’s open door statements or questions -- “How is your fundraising going?”

As I mentioned in my last two posts, Sister Lesa is a fundraiser for a private Catholic womens’ prepatory school in Southern California. When a former student, parent or grandparent of a student asks her, “How is your fundraising going?” this immediately signals to her that the person is a prospect open to a conversation on giving to La Reina high school.

If someone asks you, “How is your fundraising going?” one option is to tell them exactly how it is going. Whether your organization’s annual giving is up or down this year, it is important to make a case for why someone should give anytime they ask about your fundraising efforts. If cash gifts are down, you might let this donor know, but use this as an opportunity to present planned giving alternatives such as stock gifts or bequests.

If you are doing well this year, it still is essential that you know how to express your organization’s needs. I’ve heard the fundraising “spiel” from the top fundraiser of a University with one of the largest endowments in the country. She is so good at fundraising, she can convince you that even this institution needs additional funds to support its work.

It is important to make planned giving opportunities concrete and always present the benefits of giving. For example, if a donor asks, “How is your fundraising going?” you could say, “We really need more help.” Then, follow-up with actual ways the donor might help by exchanging a low-performing CD for a higher paying charitable gift annuity or making a gift of their appreciated stock this year to avoid capital gains tax.

The recent Philanthropy 400 study released by the Chronicle of Philanthropy reported that these charities anticipate a 4.7% increase in 2011. While cash giving has been flat, the successful charities are effectively marketing and receiving gifts of stock and other assets.

There has never been a better opportunity to ask for planned gifts. So, when you hear a statement or question from your donor that opens a door, don’t miss the opportunity to walk through. You will likely to find a receptive donor, who is willing to give you more then you expect. For more information on innovative ways to reach your donors and close more planned gifts, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

Open Door Statements from Your Donors: We Don't Know How We Can Ever Thank You...

2011-11-01T16:19:00.000-07:00

This is the second in my series of posts on statements to listen for from your donors that open the door to a planned giving conversation. Here is the second of fundraiser Sister Lesa Megaffin’s open door statements: “We don’t know how we can ever thank you for…”

Sister Lesa fundraises for a Catholic all-girls prepatory school and many of her donors are parents and grandparents of former students. This open door statement helps Sister Lesa move into a conversation about ways to help La Reina Highschool.

After hearing a statement like, “We don’t know how we can ever thank you for…,” it is very easy to follow up with statements such as, “Well, there is a way…” or “What we really need is,” or “If you really want to help, here is an area where we could use assistance…”

Using the donor’s opening provides an opportunity to engage in a discussion about the real needs of your organization. It is important to be specific in expressing these needs. For example, if you need money for a new facility, let your donors know. If you are struggling with the funding to maintain existing services, let your donors know the benefits of these services and how they can help.

Most people are unwilling to give to a black hole. One good idea is to come up with a written list of needs for your organization. Write it down and memorize the list. Then, when you come across someone who says, “We don’t know how we can ever thank you,” you can easily tick off the opportunities and let the donor select that option that best fits their passions and dreams.

By presenting concrete gift opportunities and allowing your donors selection in the process, the goals of both your donors and your organization will be met. For more information on innovative ways to reach your donors and close more planned gifts, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

Open Door Statements from Your Donors: I Wish I Could Give More...

2011-10-26T10:51:00.000-07:00

I heard a seasoned fundraiser from a Catholic College Prepatory School in Southern California talk this week about how donors make her job easy. Sister Lesa Megaffin said that when she hears three statements from a donor, it opens the door to a conversation about giving back to La Reina Highschool.

I found Sister Lesa’s remarks insightful, because they signal a possible donor waiting for an “ask.” This week I will cover one of the three statements that you should listen for from your donors: “I wish I could give more…”

Someone who has just made a gift to you, but wishes that they could give even more is often in a perfect position to do just that (they just are unaware of the opportunities). If a donor gives you a cash gift, and says that he or she has little more to give, this is the time to introduce the concept of giving other assets such as stock or CDs that are producing little return. A donor who cannot or is unwilling to part with assets right now, but wants to give more, should also be approached for a bequest gift.

Many donors are open to, at the very least, including a charity as a beneficiary of the residue or a small percentage of their estate (even one or two percent). But, they might be willing to give more (10% or 25% of their estate), if you ask. You never know, unless you ask. If someone has charitable intent, and expresses willingness to give you more, that person is a strong candidate for a planned gift.

An individual may also be willing to give you a combination of assets or gifts both now and in the future. So, while they may only be able to give you a small annual gift, that gift, in combination with a bequest and testamentary charitable remainder trust, could be significant. Never underestimate your faithful supporters (particularly those that have given to you for over 10 years or more). They will give more, if you ask.

Read my blog next week for more open door statements to listen for from your donors. For more information on innovative ways to reach your donors and close more planned gifts, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

Using Network Marketing for Bequests: One Charity's Amazing Success Story

2011-10-20T16:45:00.000-07:00

I spoke this week with Angela Throne of Texas A&M University (TAMU) Foundation about her successful bequest marketing campaigns. Angela has effectively used network marketing to multiply estate gifts for the Foundation. I asked Angela for insight into her marketing approach and the results.

In the fall of 2009, the TAMU Foundation sent a heritage membership piece to roughly 8,000 people. The four-page color direct mail piece provided an overview of what it means to be a heritage society member, the benefits of joining and included donor quotes. There was a tear-off self-mailer piece donors could complete for membership. From that mailing, the Foundation received 17 responses and booked 4 million estate gifts amounting to roughly 7 million. Three gifts resulting from this mailing are still being actively worked on by Foundation staff.

Subsequent to that mailing, the Foundation featured this piece on its GiftLegacy website, in its eNewsletter and as part of its wills kit. Two years ago, the Foundation began sending donors and prospects a kit to help them complete and update their wills and trust documents. The kit, which has evolved into an estate and gift planning kit, now features a fill-in-the-blank wills guide, brochure on methods of giving, heritage membership piece, the Provide & Protect book and bequest language.

The Foundation has found several ways to offer this kit -- from the homepage of their GiftLegacy website, as a feature nearly every other month in the GiftLegacy eNewsletter, through a blast “offer” email, as a downloadable link from their Facebook page and in the Foundation magazine ads. Recently, the Foundation decided to advertise the free kit using a Facebook advertisement.

This past spring, the kit was featured three ways -- in the Foundation’s print newsletter, eNewsletter and through blast emails. This effort resulted in 648 requests for estate and gift planning kits. In mid-September, the Foundation created another ad campaign and offered the kit in the September eNewsletter. In the month of October, Angela has received 100 requests for free kits.

We can learn a lot from Angela’s network marketing approach. She has discovered that using a variety of different marketing approaches can be effective at producing results. Different people respond to different mediums. Her challenge now is to track the source of results to determine which marketing strategies work best.

The best marketing strategies come from testing approaches, analyzing results and using your results to inform future marketing. To learn more about planned gifts marketing best practices that get results, please call 1-800-858-9154 and ask to speak to a GiftLegacy marketing specialist.

eMarketer of the Year On Pace for $10 Million in Planned Gifts!

2011-10-12T17:13:00.000-07:00

Crescendo awarded Bill Yaeger, Director of Planned Giving for the Citadel Foundation, the eMarketer of the Year award at the 2011 Practical Planned Giving Conference (PPGC) in San Diego. What is the secret to Bill’s success? Since launching Citadel’s GiftLegacy 3.0 website, Bill has seen a marked increase in planned giving activity. The Citadel Foundation is on pace for $10 million in planned gifts this year!

Bill explained to me how the GiftLegacy program has helped Citadel multiply planned gifts to become a significant share of annual revenue. “I started exploring the Crescendo services in more detail while I was the interim Planned Giving Director in 2008 – 2009,” said Bill. “I realized at that time that we were not making use of all their services and to the extent that we could. Since then, and especially since I was named Director at the beginning of 2010, we have begun using them more and more.”

The Citadel Foundation upgraded its website to GiftLegacy 3.0 in January of 2010. Take a look at their custom branded website http://www.citadelgiftplanning.org which features rotating images of the campus and cadets, a Mission Video and an online Wills Planner. Bill sends out a weekly eNewsletter to alumni and uses GiftLegacy print pieces including brochures and the Wills Guide to market his planned giving website.

Here are some numbers that illustrate the growth in Citadel’s planned giving program since it implemented GiftLegacy:

· From 2008 to 2009, Citadel experienced a 49% increase in the dollar amount of Planned Gifts.
· From 2009 to 2010, Citadel saw a 136% increase in the number of Planned Gifts.
· Since the beginning of 2008, Citadel has recorded $33,994,000 in Planned Gifts, most from a living alumni base of only 27,000 people.
· And again, this year, Citadel is on pace for at least $10 million in Planned Gifts!

With the tremendous growth in planned gifts, Citadel plans to expand its planned giving department and bring on an additional two staff members within the next year. Congratulations to Bill and the Citadel Foundation for their success! To learn more about GiftLegacy, call 1-800-858-9154 and ask to speak to one of our marketing specialists.

2011 Practical Planned Giving Conference (PPGC) - A Great Success!

2011-09-27T13:21:00.000-07:00

Over 500 Crescendo friends attended our eighth annual Practical Planned Giving Conference September 26-27 at the Paradise Point Resort on Mission Bay in San Diego. It was a great opportunity to hear leading presenters on the most relevant, cutting-edge topics in planned giving. With two full days, six tracks and 48 sessions, this year's event was another big success.

Charles Schultz, Crescendo’s President, unveiled five exciting new products including the CresMobile app, Board of Directors training, Field Staff manager, GiftCharity 3.0 and Mission Videos. CresMobile is a planned giving smartphone app for iPhone and Android available for free download today. Starting Wednesday, the app may be downloaded for $2.99.

The theme of the conference this year was Bequest Boom. Many attended sessions in the Art of the Ask track to learn new ways to ask for gifts and proven ask strategies with Kay Sprinkel Grace, Phil Purcell and Jackie Franey. Our Property MegaGifts track featured leading attorneys David Wheeler Newman, Chris Hoyt, Lynda Sands and Steve Chidester. The Bequest Boom track was taught by charitable experts Rod Zeeb, Kristin Dugdale, Lynn Archer and Andrew Fussner. We also brought back the popular sessions on eMarketing, Fundamentals and Gift Annuities with faculty such as Winton Smith, Kathryn Miree, Rebecca Locke, Bob Rock Laurie Valentine and more.

In addition to the great line-up of PPGC speakers and presentations, the 2011 GiftLegacy award winners were named. The Best 3.0 Website Award was presented to the Arts and Education Council of St. Louis. The Citadel Foundation and CHOC Children’s Hospital received Honorable Mention for the Best Website category. You can view the winning websites at www.GiftLegacy.com Best Literature Award went to Messiah College and Honorable Mention went to The Leadership Institute and Wright State University.

The top GiftLegacy award for eMarketer of the Year 2011 was accepted by Bill Yaeger, Assistant Vice President of Principal and Planned Gifts at The Citadel Foundation. He has used Crescendo’s GiftLegacy system for planned giving since 2008 and has raised over $33 Million in planned gifts. This year Bill is on pace for at least $10million more in planned gifts. Congratulations to Bill and all of this year’s award winners!

Please mark your calendar and plan to join us for PPGC 2012 on September 17-18 at Shingle Creek Resort and Spa in Orlando, Florida. We already have a great lineup of speakers planned for next year. Thanks to all the Crescendo staff and speakers who made PPGC 2011 our biggest and best conference ever!

More Reasons to Include Online Giving on Your Planned Giving Website

2011-09-21T09:21:00.000-07:00

This is a follow-up from last week’s post on reasons to include online giving on your planned giving website. I wanted to share with you two more ideas from one of my readers:

“Nice blog post. I will give you two more reasons for putting current donation capabilities on a website:

(1) Donors may have a desire to give cash gifts that might be small compared to the size of previous planned gifts. Would you tell someone who made a $200,000 planned gift last year that you don't want a $5,000 cash gift from them this year?

(2) December 31st is a Saturday and someone who is told by their accountant to make additional year-end gifts might not have time to do a planned gift. If a charity's office is already closed for the holidays, donors will look to give to charities that make the giving process easy and accessible. There is nothing easier or more accessible than going to a charity's website and making a cash donation to a charity that you support on December 30 or 31st.”

Are you currently offering online giving on your planned giving website? Is it easy to make an online gift? On the second point above, I know that I am often more willing to give to a charity that makes online giving accessible and fast. For example, when I find a charity that accepts gifts made by PayPal, I am inclined to make a gift to that charity over others because I already have a PayPal account linked to my checking account. By offering online giving options that make giving easy, you can increase gifts for your organization!

If you have additional thoughts or stories about how online giving has helped your planned giving program, please comment on my blog or email me at kristen@cresmail.com

Why Include Online Giving on Your Planned Giving Website

2011-09-14T13:03:00.000-07:00

When I talk with charities about creating a planned giving website, I always recommend that they include an option for online giving. It seems intuitive that nonprofits seeking planned gifts would also want current dollars.

One charity officer who emailed me this week expressed concern that offering online giving would take away from their planned giving efforts. I responded that online giving will actually help raise planned gifts. Here are some reasons why your charity should include online giving on your planned giving website.

Because Your CFO Wants Dollars Now If your charity’s CFO is like most CFOs, they are concerned with the organization’s bottom line. They want to see how much revenue the planned giving program is generating on an annual basis. Because planned gifts sometimes take time to mature, if you can show that the planned giving department is generating current cash to add to the annual budget, this can only help justify your planned giving efforts – especially while you are waiting to receive that next big bequest or charitable remainder.

Because Annual Gift Donors Make Planned Gifts Some of your best prospects for planned gifts will be consistent annual gift donors, especially those who have given to your organization for 10 or more years. While these individuals may not make large gifts, their commitment to your mission (as shown through their regular gifts) makes them good candidates for bequests and also charitable gift annuities (for annual fixed income). It makes sense that you would include online giving options for donors who may not be ready to make a planned gift now, but, with time, will make this added commitment.

Because Planned Giving Donors Make Cash Gifts If a donor has already established a gift annuity with your organization, he or she is likely enjoying some tax-free income. There is a lot of anecdotal evidence about donors establishing multiple gift annuities (see my prior post on this topic). Why does this make sense? Gift annuitants (particularly seniors) seldom make drastic changes in lifestyle later in life. With the benefit of tax-free income, many find that they have more than they need. Later in life, these individuals have a propensity to repeat gift annuities and make cash gifts. Providing an online giving opportunity can only help facilitate these gifts and put a smile on your CFO’s face.

I’ve given you just a few reasons why you might want to include an online giving option on your planned giving website. I came across a useful blog post on 10 sites that help you setup a donation fund. This might give you some ideas on ways to add an online giving presence. If you have further questions about this topic please post a comment on my blog or send me an email kristen@cresmail.com.

The Best Tips for Planned Giving Donor Visits

2011-09-07T09:38:00.000-07:00

Once you have identified a good planned giving prospect, the next step will often be to schedule a donor visit. Since planned gifts require time and relationship, a personal meeting is essential to understanding a donor’s goals, building trust in your organization and relaying the benefits of a planned gift.

Because many of you have asked me to share strategies for donor visits, I decided to interview an expert in this area -- Janet Zinke, Development officer for The Village, located in Fargo, North Dakota. Janet is one of the most personable development officers I have ever met, which explains why she has been so successful at meeting and working with donors. She is like many of you in that she wears a lot of fundraising hats (including planned giving). She is also a stand-up comedian, which enables her to relate well with anyone. Here are Janet’s responses to my questions about meeting with donors and making “the ask” during a donor visit.

Kristen: What are some of the best ways you’ve found to secure a donor visit?

Janet: For an existing donor, I pick up the phone and make a friendly call. While on the phone, we chat a bit, and at some point I ask if it would be ok to stop by, or go out for coffee, to thank them in person. I also bring something special – personal-along to start conversation, like a jar of my homemade sauerkraut, homemade pie or something we have talked about in an earlier meeting. If it is someone that is new to our organization, I find out what I can about them and then simply ask for a short visit to get to know one another better.

Kristen: How do you typically begin the visit? What do you talk about?

Janet: We tend to discuss how they are connected to our organization and stories about why we are both passionate about the mission of The Village Family Service Center. The Village helps over 80,000 people each year in North Dakota and Minnesota, and has done so for 120 years. This means people usually have someone they know, or someone close to them that has been helped by our wide range of services. Others appreciate that we reach so many rural communities with these services as well.

Kristen: What are some of the important questions to ask in a donor visit?

Janet: My questions usually start with the basic who, where, and when before going more in depth into what, like what’s important to them and why? What are they passionate about? What would they like to achieve?

Kristen: What is the best way you’ve found to “make the ask” for a gift?

Janet: I have always felt a deep sense of honor at being allowed to represent an organization whose mission I have witnessed in action again and again…so many lives made better, with families and companies being made stronger. That is why asking for support has always come quite easily for me. I am honest and sincere about the serious need for their support. We usually have met to discuss how they feel about our services. Keeping in mind that I am a friend raiser, I invite them to explore with me what planned giving options fit best for them.

Thank you to Janet for sharing her creativity and ideas on effective donor visits. If you have other donor visit strategies to share, please email me at kristen@cresmail.com. I would love to share your ideas!

More Ways to Make Planned Giving Part of Your Next Campaign

2011-08-30T14:50:00.000-07:00

This is the second in a series of posts on including planned giving in a campaign. In my last post, I shared with you how Shannon Skinner from University of New Mexico Foundation used the web and email to start the planned giving discussion as part of UNM’s campaign.

Here are some other ideas Shannon shared with me that you might consider adopting for your organization:

Print Marketing

In June, as part of UNM’s campaign, the planned giving office mailed donors a letter and guide to wills planning. Shannon said that UNM is still receiving responses from this mailing and is learning about new and previously unidentified bequests. A mailing to supporters on planned giving options resulted in more favorable responses from individuals who own assets like CDs that are not producing the desired return. Shannon said that UNM’s donors have found the idea of exchanging low income producing assets for the higher fixed payments of a charitable gift annuity attractive.

Education & Support

The UNM planned giving office is also providing planned giving education and support to other development functions during the campaign. Since UNM is composed of numerous schools and units (including health sciences and a research facility), the planned giving office is creating branded postcards and brochures for other units to use in gift receipt mailings. Shannon says that if the planned giving office can educate UNM’s directors and development officers to identify planned giving donor prospects and start the conversation, this will increase campaign gifts.

UNM believes planned giving is an important part of its campaign and will help ensure that UNM meets its current and future obligations. UNM’s campus also includes the state hospital that requires ongoing support for the replacement of medical equipment and research needs. The hospital cares for many patients who want to give back and Shannon says that planned giving helps these individuals fulfill their philanthropic desires.

For more information on how to include planned gifts in your campaign, contact Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

How to Include Planned Gifts in a Campaign -- One Charity's Story

2011-08-16T16:07:00.000-07:00

Recently, I have received a number of questions about how to include planned gifts in a capital campaign. On my latest trip, I met Shannon Skinner, a gift planner with The University of New Mexico Foundation (UNM). Shannon shared with me how UNM is promoting planned gifts as part of its Changing Worlds campaign.

The goal of Changing Worlds: The Campaign for UNM is to raise $675 million over eight years, ending in 2014 in conjunction with the University’s 125th anniversary. The campaign is intended to raise support for students, faculty and research activities and new facilities at the UNM campus.

UNM has counted planned gifts from the very start of its campaign. During the initial phase of the campaign, the UNM planned giving office focused on bequests and gift annuities, marketing these gift opportunities as way to help donors satisfy philanthropic goals while achieving tax and income benefits. UNM now has a 12-month planned gifts marketing plan in place and will offer a variety of planned gifts (including charitable remainder trusts) in the coming year.

Web & Email

Shannon says that UNM has found its planned giving website to be an effective tool for reaching a new segment of donors during the campaign. The UNM website includes an online guide for planning your will, videos on the benefits of wills versus trusts and other planning considerations and downloadable bequest brochures. Shannon says that UNM has received numerous requests for information and bequest commitments in response to wills planning information included on its website http://www.unmgift.org/ and in its weekly donor eNewsletters.

Read my blog next week to learn more about UNM’s campaign efforts and how you can include planned giving in your next campaign. If planned gifts are already part of your organization's campaign, please share your story with me kristen@cresmail.com.

How to Talk About Planned Gifts as the Markets Drop

2011-08-10T15:24:00.001-07:00

I was asked this week to write an article for a charity planning to market charitable remainder trusts to donors who are concerned about the declining stock and real estate markets. I thought this might be helpful to others of you who are discussing the economy and gift planning options with your donors. Please feel free to reprint the article below with the copyright or use the ideas presented in your next donor discussion.

Are You Concerned About Your Investments in the Present Economy?

With the recent stock market fluctuations, you may be concerned about the safety of your 401(k) and other income producing assets. The steady decline of the real estate market may also make you reluctant to unload an unwanted residence or vacant land at a bargain price. If you are looking for a way to create extra income for yourself and your loved ones while helping us continue our work, you might want to consider a charitable remainder trust.

If you are concerned about your fluctuating stock in the market…

Is your stock not performing as expected? Many people are frustrated when they look at what’s happening in the stock market. The good news is that when you transfer your appreciated stock to fund a charitable remainder trust, the trust can pay you income at a rate of 5% or 6% of the trust assets for your lifetime. That’s better than what you are likely earning in the current market! You will receive a charitable deduction to offset this year’s taxes and avoid capital gains tax on the sale of your stock. We will benefit from the trust assets that go unused during your lifetime, enabling us to continue our work.

If you are concerned about your declining real estate…

Why might a charitable remainder trust make sense for you this year? Perhaps you own real estate that you no longer use or wish to manage. Despite the declining real estate market, your property is still worth more than the purchase price. You may not want to sell your real estate and pay capital gains tax. By transferring your property to fund a charitable remainder trust, the trust will sell it tax-free. You will receive income for your life (or for you and another person) and a charitable tax deduction.

Another possibility is that you are a surviving spouse or a couple who has raised children and you no longer need such a large home. A sale and unitrust works well here, permitting you to transfer a portion of your property to fund an income producing charitable remainder trust and also receive cash from the sale. For more information on these charitable trust options or to see an illustration of what a charitable remainder trust plan could look like for you, please contact us. We look forward to helping you plan for your future.

Copyright © 2011 Crescendo Interactive, Inc.

How to Take the Planned Giving Conversation One Step Further

2011-08-02T16:33:00.000-07:00

This is my second post on the topic of how to naturally bring planned giving into a donor conversation. At a recent seminar, long-time gift planner Chuck Knox shared with me his ideas on ways to begin the gift planning discussion. Here are a few more of Chuck’s ideas to take the conversation one step further:

For someone who doesn’t want to make a gift today - Ask the donor whether he or she would make a gift today to support your mission if it didn’t cost anything. Some individuals who are uncertain about the economy will want to hold on to stock, real estate and retirement assets during life, but would be willing to make a bequest of these assets. Ask the donor whether he or she has already created a will or trust plan. If the answer is yes and there is still a desire to make changes, one idea is to recommend that specific bequests be made to family members and a gift of the percentage of the estate or a percent of the residue (what’s left) be made to charity. If the donor does not wish to visit an attorney to make a change, explain that an IRA or 401(k) may be gifted by completing a beneficiary designation form (many of which are online).

For donors who have already made a planned gift - Chances are, if a donor is already enjoying increased income from a charitable gift annuity or charitable remainder unitrust, he or she has more discretionary income than needed. If you have been sending these checks to your donors, you have also built up a relationship of trust over a number of years. Often, happy donors are willing to make annual gifts of the unneeded funds and even become a major donor giving $30,000, $40,000 or $50,000+ a year. Donors who have made life income gifts are also excellent prospects for bequests. When you meet with your planned giving donors or send a letter you might ask whether they have remembered to include your organization in their planning. Sometimes receiving an additional gift from an already happy donor is just a matter of asking.

Chuck provides great ideas on how to build strong donor relationships. So often, charitable fundraisers get caught up in meeting internal goals (such as goals for number of donor visits made, gifts closed, etc.). Here Chuck offers a good piece of advice --If you really focus on the donors needs your goals as a fundraiser will be taken care of, as well.

For more information on ways to start the planned giving conversation or beginning your planned giving program, please contact me at kristen@cresmail.com. Also, email me if you would be interested in a free seminar on getting started with planned giving.

How to Begin the Gift Planning Conversation

2011-07-27T13:30:00.000-07:00

Regardless of your area of expertise, if you are raising money for a nonprofit, knowing how to start the conversation about gift planning is essential. Building a pipeline of planned gifts brings significant value to your organization. Nonprofits with successful programs tell me that realized planned gifts may amount to 10%, 15% (and one charity tells me even 50%) of an organization’s annual budget.

Because starting the planned giving conversation can be daunting, I’ve asked a seasoned planned giving officer, Chuck Knox, to share with me ways to naturally bring planned gifts into a donor conversation. Even if you have years of experience in gift planning, I think Chuck’s ideas are an excellent refresher on how easy it can be to talk about gift planning concepts with supporters (especially consistent annual givers):

For couples/surviving spouses with children – Ask them to add up how much their estate is worth. Then, if the plan is to “give it all to family,” ask whether or not it would be wise to give that much (divided among the number children) in a “lump sum.” Chuck says very often he learns that there is at least one child who uses money “creatively.” Framing questions in this manner opens the conversation to providing income to children through a charitable remainder unitrust (as opposed to a lump sum) and leaving the balance to charity.

For seniors/persons with appreciated assets – Ask whether they are happy with their current income. You might ask how much income they are currently receiving from their CDs, stocks or money market fund. In many cases, seniors own assets that are only producing 1%-2%. Ask if they would be willing to give up the asset to increase their income to 7%, 8% or 9% annually. This opens the conversation to the benefits of a charitable gift annuity which provides fixed income at a rate based on the donor’s age, possible tax-free income and a gift to charity.

Visit my blog next week for more ideas on how to talk with your supporters about making a planned gift. If you want to start a planned giving program for your organization, please email me at kristen@cresmail.com for a free training.

What Do Web Analytics Say About Your Planned Giving Website?

2011-07-21T13:30:00.000-07:00

Many charities already use Google analytics or other online tools that help a web user analyze information about visitors and determine the effectiveness of web content. One question charities often ask me is how to understand the statistics for their planned giving website and how content is performing on their page.

How Visitors Find Your Site

At a very basic level, web analytics should tell you the total number of visitors to your website and breakdown those visits by time of the day and day of the week. However, for marketing purposes, it is more useful for you to track data on your visitors’ origins. In other words, your web analytics are useful in determining how visitors come to your planned giving website and where they come from.

If you have downloaded Google analytics or are using the GiftLegacy analytics tools, you can track the level of visits you are receiving from the front page of your charity’s website to your planned giving homepage. This may tell you volumes of information about how easy it is for a donor to find the planned giving information on your website. It is also useful to assess other ways that donors access your site including access through use of a short URL, bookmarks and links from an email newsletter.

What Your Visitors “Experience”

When donors visit your planned giving website, they “experience” your site. Their experience tells you a lot about whether the information you have provided is motivating and engaging enough to maintain their interest and current enough to ensure a repeat visit. With Google and the GiftLegacy analytics tools, you can learn a great deal about the frequency of your donor visits including how often your donors come to the site, the time between site visits and length of time on the site. The depth of a donor’s visit is important because it tells you how many pages the visitor clicked and the average time the visitor stayed on the site.

Your Best Performing Content

If you want to determine how your content is performing (i.e. the level of interest generated by your latest article on wills and bequests) you can do this by viewing the page views for a specific article or page on your website. The average page views tell you the top viewed pages or most popular pages. More telling is the average time spent on the page, which helps you know how much of the article was likely read. It is also useful to review the top landing and exit pages for your website. This tells you what your supporters will look at first and read before leaving your site.

By analyzing your planned giving web statistics, you should gain a clearer sense of how donors and prospects are viewing the information and what articles and features are of most interest. If you know that an article on the benefits of charitable gift annuities was a top landing page, you will want to feature similar articles in the future or feature other gift options with the same prominence.

For GiftLegacy websites, analysis of web statistics and content performance informs our decisions on the best new information to provide for our planned giving websites. For more information on using planned giving analytics to maximize your marketing, please call 1-800-858-9154 and ask to speak with a GiftLegacy marketing specialist.

Are Your Gift Categorizations Confusing to Your Donors? Ask Them!

2011-07-12T07:31:00.001-07:00

This is the fourth post in my series on lessons from donors in the area of donor relations. Last week I discussed the problem of failures in communication both internally (in the organization) and externally (with your donors). This week I want to focus on how charity gift classifications and categorizations can lead to donor frustration.

Many charities place limitations on participation in legacy societies. Some of these limits are gift based (participation limited to donors who make bequest or other testamentary gift commitments) while others are dollar based (participation limited to donors who make gifts of $25,000 or more). Such limits generally prevent charities from connecting with and recognizing donors who don't fit within proscribed categories but are otherwise invested in the mission of the organization and could make significant gifts.

I spoke with one charity that lifted a $20,000 dollar restriction on heritage society membership and discovered donors who could now join (after creating $5,000 and $10,000 charitable gift annuities) self-identified more significant bequests. The organization would not have known about these bequests if it had maintained its prior membership requirement. As a result, the charity was able to thank and recognize these donors.

Gift and fund designations can also be perplexing to donors. I once fulfilled an annual gift pledge and decided to complete the part of the form that said my gift could be made in memory of someone. My grandfather passed away that year and I wanted to make my gift in his honor. The form told me that a letter would be sent to my grandmother acknowledging my grandfather’s memory.

At the end of the year, I received a call asking if I planned to fulfill my pledge. I said that I had already made the gift but was told that because the gift was made “In Memoriam” it would not qualify. Apparently the charity did not designate “In Memoriam” gifts to the General Fund which was a requirement for pledge gifts. Of course, I as a donor did not know about this requirement nor could I find it stated anywhere in writing.

You can see how confusing gift categorizations and classifications can frustrate donors and result in lost gifts. My hope is that we all (as donors, charitable officers, consultants and advisors) can learn from one another about the best policies and practices to promote positive donor relations. I would love to hear your ideas on effective ways to strengthen donor relationships. If you have an idea or story to share, please email me at kristen@cresmail.com.

How Would a Donor Assess Your Charity's Communications? Too Much? Too Little?

2011-07-06T09:51:00.000-07:00

This is the third post in my series on lessons in donor relations. Last week I discussed the problem of lack of clarity when a charity limits how it may accept gifts. This week I want to address failures in communication, both internally (within the organization) and externally (with donors), that may result in a lost gift.

One issue I hear about over and over again is a lack of communication between departments within a charity. If I make a gift to fulfill my commitment for the “President’s Club” online and then receive multiple calls from development staff asking me to fulfill my annual pledge, it’s clear that someone is not communicating. Nothing turns off donors more than being asked to make a gift when they have already given – and this is equally true for print, email, phone and in-person solicitations.

Donors tell me that when they are pestered with too many letters to give to an organization that they already support they stop giving. There is a point at which you can reach saturation with direct mail. What about e-mail? I addressed this question in an earlier post on the topic of whether weekly email is too much. The answer here is that the donor has “opted in” and communicated to you that they want to receive this much attention. Anytime the donor no longer wishes to be on your email list he or she should have the ability to “opt-out.”

Understanding how to communicate with your donors and the appropriate level of communication is an art. You might think about sending out a survey to your donors to determine the level of communication that they desire. Find out how often they wish to be contacted and the best way to reach them (by email, mail, phone call or on Facebook). Copy all fundraising staff members on the results so that everyone can be in tune with your donors’ needs and coordinate communications accordingly.

You can see how failure to communicate well within and outside of your organization can create donor relations problems. Read my blog next week to learn more ways to build positive donor relationships.

Are Your Gift Acceptance Limits Clear? Ask Your Donors

2011-06-29T09:53:00.000-07:00

This is the second in my series of posts on lessons from your donors. In my last post, I tackled the problem of a break in the online giving system. This week my focus is on a sticky problem that can result in a lost gift -- lack of clarity in charity gift acceptance limitations.

Are your donors aware of the forms of credit your charity accepts for charitable gifts? I once returned a credit card authorization form to a charity by mail designating that a gift be made using my American Express card. Although it was not clearly marked on the form, the charity only processed gifts made by two card carriers -- MasterCard and Visa.

I assumed that the amount of the gift was deducted because of the thank you letter I received from the charity. I had already paid the card off two months later when the charity contacted me. A gift officer explained that the gift was never processed and asked me if I would like to make my gift by MasterCard. Because I had already “paid for the gift” I said no thank you and found another charity with the capability to process my Amex card in the gift amount.

While I later made another gift to the intended charity (this time by MasterCard), that charity lost my first gift. I am not suggesting that every charity should offer the ability to take gifts made by AMEX, but I am suggesting that every charity clarify their gift acceptance capabilities. If you offer the option of making gifts by credit card, clarify in large bold type on your website and every gift form the type of credit you will accept.

It is also important to be clear about the address where gifts by check should be sent and to provide online instructions for stock transfers. The charity that makes the giving process clear, easy and accessible is more likely to have happy donors that make repeat gifts.

You can see how lack of clarity on gift acceptance capabilities could lead to a donor relations problem. Read my next blog post for more ways to build positive relationships with your donors.

Are There Breaks in Your Charity's Online System? Test it Out!

2011-06-15T11:41:00.000-07:00

Like many donors, I enjoy giving back to an organization I love, that truly impacts our world for good. But, I can tell you that HOW the organization treats me as a donor will determine whether I continue to give.

As both a donor and someone who works with charities, I am always astounded when I see organizational practices that rub donors the wrong way. While many charities exercise good donor stewardship, there are ways that a charity can annoy or turn-off an otherwise happy giver and lose a future gift.

My purpose in writing this series of posts is to review places where charity policies and practices should be reexamined to promote better donor relations. The first of my posts deals with a breakdown in a charity’s online system that results in lost gifts.

Have you ever tried to make a gift using an online giving button that didn’t work? I found a broken giving link on a charity website just this week. It’s so important that someone in your office tests your website links on a regular basis to make sure they are functioning properly. Failure to do so could result in losing a donor’s gift.

Even if your online giving system appears to be working, there may be kinks in the process. I once made a gift online and printed a receipt but the system never withdrew the money from my account. I didn’t discover this until almost one year later when I was doing my taxes and found that I hadn’t received a gift receipt letter from the charity. The online giving failure not only cost me a deduction that year, but it cost the charity its donation.

Another issue I see frequently is that charities do not have a mechanism on their website for online giving. I wanted to make a gift to a charity before the end of last year, but could not find any way to do this online. In the end, I had to send a check in the mail. Due to the Christmas holiday, the charity did not actually withdraw the funds from my account until mid-January of 2011. If I follow the mailbox rule, I could still claim a deduction for 2010, but the charity receipted the gift for 2011.

You can see how breaks in the online giving system could be frustrating for any well-meaning donor and potential fatal for the donor-charity relationship. Read my blog next week for more ways to build positive donor relationships.

Online Fundraising Checklist: Are You Doing These Things?

2011-06-08T08:52:00.000-07:00

Network for Good recently released an online fundraiser’s checklist covering the basics of online web marketing. The checklist provides what I think are the essential questions to ask when assessing the effectiveness of a charity's online presence (whether your charity is small or large). You might want to take the list below and use it to cross-check your organization's website.

Here are the questions I think are particularly important for an organization to ask and my responses as they relate to creating an effective planned giving website:

Can a stranger identify what your organization does and why they should care within two seconds of opening your home page? Your website should explain (through words, images and video) who you are, what you do (your mission) and why to give.

Do you have a big, emotionally affecting image or statement on your home page that connects on a personal level? I love to see websites with pictures illustrating the work of the organization (the people, places and things your charity benefits) and the people (donors who have given you permission to use their image) who have benefitted through giving.

Does your website give you and your potential donor the opportunity to take the first step in forming a relationship with you? If the donor is ready to give, do you have a clear “contact us” button and links to your email address to make it easy for them to contact you for further information? Including online sign-up for your eNewsletter is another way to build the type of ongoing relationship that may lead to a planned gift.

Are you sure you don’t have too much on the page? Is the page clean, simple and easy to use? The best web sites provide “teasers” of content (2-3 sentences) with links to learn more. There is nothing worse than a junky site with too much to say and no clarity on where the user is going. So, preserve space, keep your text to a minimum and provide intuitive navigation.

Do you let donors know where else they can find you online? Make sure that your website includes icons for Facebook, Twitter, YouTube and any other place you have a social networking presence to encourage “friends” and “followers” to join you there. You will also want to include sign-up opportunities on your emails.

Whether you are already using some or all of these strategies, it is always good to do an assessment to see how you can enhance your marketing efforts. I find web analytics to be particularly effective in determining the type of content that works best for my viewers and generates a response.

Assessing your online presence is just the first step in developing a comprehensive marketing strategy. To receive a free marketing assessment of your online planned giving program please contact Crescendo at 800-858-9154 and ask to speak to one of our marketing specialists.

Is Your Charity Using Social Media Yet? Why You Can't Afford to Wait

2011-06-01T10:36:00.000-07:00

The 2011 nonprofit social networking survey released by NTEN, Common Knowledge and Blackbaud provides compelling data on how charities are using social media. If anything, the data reinforces the notion that those of you who are sitting on the social media fence need to get out there. Here are a few highlights that point to the growth of social media and its use for online fundraising:

Of the charities surveyed (over 11,000 nonprofits) it came as no surprise that Facebook is still king and extending its lead slowly. Nine out of 10 nonprofits (89%) reported a presence on Facebook in 2011. Not surprisingly, the survey suggested that Twitter usage has leveled off among nonprofits (57% reported using Twitter in 2011).

The survey also demonstrated that organizations are getting savvier at growing their social media presence. The Facebook average member community size for nonprofits rose 161% in 2011 to 6,376 members compared to 2,440 and 5,391 respectively in 2010 and 2009.

The level of fundraising on Facebook also increased substantially this year. The number of groups successfully generating a small fundraising stream ($1 to $10K annually) has risen each year from 38% in 2009 to 46% in 2011. The number of organizations raising $100,000 or more per year on social networks doubled this year from 0.2% to 0.4%.

What does all of this data tell us? It shows that use of social media for nonprofits can no longer be dismissed as a “fad.” Its use is growing and charities can no longer afford to be without a presence. In other words, if you are not there, some other charity will be out their making “friends” with your supporters who are “following” on a daily basis.

We also can now dismiss the critics who say that social media fundraising is ineffective. While I advocate that a Facebook or Twitter page should never be set up solely for the purpose of raising money, gifts will be the result of a strong relationship. For planned gifts, it makes sense to regularly update your supporters through social media since a solid ongoing long-term relationship is often the basis for a future gift.

To learn more about effective planned gifts social media strategies call 1-800-858-9154 and ask for a free consultation with a GiftLegacy eMarketing specialist.

What You Need to Know About the Coming ACGA Rate Change

2011-05-24T10:47:00.000-07:00

The American Council on Gift Annuities (ACGA) has just released its explanation of the new rate schedule for charitable gift annuities. The new rates, which will become effective on July 1, reflect changes in the assumptions for annuitant mortality and market return.

Here is a short list of the changes you should be aware of when issuing gift annuities:

New Mortality Assumptions - The new rates maintain the conservatism of prior rate schedules by assuming that all annuitants are female and one year younger than their actual ages. The rates continue to be based on the Annuity 2000 Mortality Table, but incorporate projections based on the ACGA’s recent morality study which concluded that annuitants are living longer than previous studies suggested. Interestingly enough, the study showed a higher proportion of males establishing charitable gift annuities in the last decade.

Lower Return Assumption - The ACGA rates return assumption drops to a net 4.0% (5.0% minus 1% assumed costs). This is a decrease from the 5.5% total return assumption (4.5% after costs) used in calculating the 2010 rates. Part of this change reflects a lowering of the assumed equities return by 2% (The S& P 500 Index return for 1926-2010 of 10% is reduced to 8%) to reflect the changing economic environment in which gift annuities are issued and potential returns in the next decade. The asset allocation of 40% equities, 55% fixed income and 5% cash remain unchanged.

50% Residuum and Present Value Overlay - The new ACGA rates still assume that the charity will receive at least 50% of the initial gift amount. Historically, charities using ACGA rates have reported residuums in excess of 70%-80%. To address the concerns of CFOs who often think in present value terms, it is now additionally required that the present value of the residuum be at least 20% of the gift amount. The 20% minimum present value requirement lowers the rates slightly for annuities issued at ages 64 and below.

Generally speaking, the new rate schedule contains slightly lower rates for single-life annuities for ages 69 and younger, and slightly higher rates for single-life annuities at ages 75 and older (the ages at which a majority of charities issue annuities). Similar changes apply to two-life gift annuity rates. Charities will be happy to know that the cap on one-life rates for annuitants age 90 is increasing from 9.5% to 9.8%.

The increase in rates for the most commonly issued gift annuities is good news for charities. You can now encourage your donors to take advantage of new rates with the opportunity for higher income. Always remember to emphasize that your donors are making a gift to charity and not an investment. Fixed income for life at a rate based on the donor’s age is one of many benefits for making this gift.

To view the new rate schedules and a full explanation of the changes, visit the ACGA web site http://www.acga-web.org

What Drives Your Major Donors to Give?

2011-05-19T15:29:00.000-07:00

Have you ever wondered what factors drive your donors to make major gifts to your organization? Matthew Laufman, Vice President of Philanthropy for Bank of America Merrill Lynch, gave an excellent presentation on this topic at the recent Northern California Planned Giving Conference.

Matthew’s research, based on a recent BOFA/Merrill sponsored study, showed that donors with household incomes greater than $200,000 continue to support charities even in an economic downturn. Here are some of the factors that impact major donor charitable giving decisions according to the study:

72% give when they believe that their gift will make a difference

71% give when they know the organization is efficient in its use of gifts

54% give based on the organization’s communications about the percent of funding going to programming versus administration

34.1% give based on the organization’s communications about its impact

The study also found that donors have high expectations of charitable organizations. Donors ranked sound business operational practices, acknowledgement of contributions, appropriate spending on overhead and full financial disclosure as the factors that were the most important when determining which charity to support.

The web and social media have made your donors savvier than ever before. Your donors can and will search for your Form 990 online. There are also sites that rate the efficiency of your use of funds. This study only confirms donors want to see that more of their gifts go to serve your mission as opposed to the organization’s operations.

Transparency and good public relations are essential to building trust with today’s donors. The recent Three Cups of Tea scandal illustrates how painting an inaccurate picture can damage your charity’s reputation. In all your communications with donors and the public you must be real, authentic and always represent your mission well. Your donors are watching and what you do determines whether they will give.

To learn more about innovative ways to reach your major donors, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

Want Repeat Gifts From Your Donors? It's Easy

2011-05-13T10:59:00.000-07:00

I am rereading the Networked Nonprofit by Beth Kanter and Allison Fine. In one of the chapters they reiterate that a donor who is thanked will give again. Supporters need to be thanked regularly to feel connected to the organization. This connection develops over time into a relationship which can form the basis for a planned gift and very often, a repeated gift.

So, what are some of the best ways to thank your donors? The first two suggestions below are obvious but cannot be said enough. The last one you may already be doing, but Kanter and Fine provide some new ideas for how to use the web and social media in the stewardship process.

Call your donors – There is nothing like a personal phone call to say “thank you.” The first time a charity development officer called and thanked me for a gift I have to say I was taken off guard. I did not expect this level of attention. I know that I was not singled out because the development officer told me that they call and thank nearly all of their donors. Because I was thanked so personally, I gave again.

Write a personal thank you note – I’ve received numerous impersonal formulaic thank you letters over the years. Nothing in these letters ever compelled me to look further into the organization’s work or increase my commitment level. But, one organization I give to asks their volunteers to write personal notes to all contributors. I can tell you that each year when I receive that note I’m impressed by their dedication. I feel special and I give again.

Recognize them – It’s important to recognize donors and one of the best ways to encourage repeat gifts is by making this recognition public. Many organizations publish the names of their Heritage Society Members. Kanter and Fine suggest that organizations list the name of donors (who want to be named) on their blogs and websites. Donors can also be thanked personally on Facebook and Twitter (through a direct message).

A thanked donor will feel valued by the organization, particularly if the thank is sincere and personal. And a thanked donor that feels special is more likely to give again! So always, always remember to thank your donors in a way that emphasizes their value as individuals and the value they contribute to your organization.

For more creative new ways to thank your donors online, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

How to Raise Money in a Post-Recession World - Stay in Touch!

2011-05-05T15:00:00.000-07:00

Attendees at this year’s AFP International Conference on Fundraising heard from a variety of speakers on the topic of how to raise money in a post-recession world. The subject is one of great interest to charities raising cash and planned gifts in the current giving environment.

I spoke this week with a development officer at a major hospital foundation. “It’s tough out there,” she said to me. While numerous studies I’ve referenced on this blog show that fundraising is rebounding as the economy inches towards recovery, many charities still find it difficult to ask for money right now.

So, how do you approach giving when your donors are nervous about the economy and their future? I think the key really is to go back to the basics. The Chronicle of Philanthropy featured an excellent article in a recent edition focusing on tips from social service agencies on what to say to your donors. One of the thoughts suggested by a charity was so basic, but cannot be said enough -- stay in touch with your donors.

Now, more than ever, you need to be connecting with and building relationships with your donors. Relationship matters and it can make or break a gift. A study by Andrew Fussner featured in the April edition of Planned Giving Today showed that bequest income grew in the last five years from donors who were stewarded by the organization, whereas it dropped off when donors had little or no contact with the organization.

Relationship can be built in many ways -- through remembering to send your donors birthday cards, inviting them to special events, adding them to your regular email list and always, always thanking them for their gifts. I give again and again to the organization that sends me a personal note each year, because it makes me feel special. Donors want to feel special and the more you can personalize your email and print message marketing, the more likely your donors will feel good about and repeat their gifts.

For more information on the best ways to build the kind of ongoing relationships with your donors that lead to planned gifts, give Crescendo a call at 1-800-858-9154 and ask to speak to one of our marketing specialists.

What Type of Content Should Your Charity Post to Facebook?

2011-04-27T10:58:00.000-07:00

Christina Johns, social media manager for International Fellowship of Christians and Jews (IFCJ), talked in a recent webinar about what it takes to create and grow a social media community. The content that works best for posting to Facebook or dropping on Twitter may be similar to what you use on your website, in an e-mail or a direct mail piece. You are just tailoring your content to the new media environment.

As a first step, it's important to listen to how your community responds to your postings. For example, Christina shared that content about one of IFCJ's programs does well on Facebook while fans have been unresponsive to information posted about another program. Use your community as a gauge to determine what content works best and where. Focus on the types of tools you are already employing that can translate into social media. Use social media to generate new traffic on your website by dropping links. Then, evaluate tracking information to see how many users are going to your website, surfing around and learning more about the organization.

I frequently receive questions about how charity's can measure the results of their social networking. Facebook Insights, Hootsuite and other online tools provide ways to help you track responses to information you post. Facebook Insights platform shows points of engagement and you can look to see how content performs on a page. You can also look to posts on the page itself to see who is engaging with you and if they are a past donor or prospect for further communication.

Johns notes that community driven content is also important. If you post an announcement about a seminar or webinar on your Facebook wall and then someone asks a question about how to participate, your response will help more than one fan. Look to see how others respond because “listening” to these cues may help you further develop effective ways to reach your supporters through social media.

To learn more about social media for planned gifts, please call Crescendo at 1-800-858-9154 or email us at crescendo@cresmail.com.

Answers to Charity Social Media Questions

2011-04-21T10:04:00.000-07:00

This is my second post on social media for nonprofits based on a live discussion with nonprofit consultant Allison Fine sponsored by the Chronicle of Philanthropy. Here are Allison’s helpful responses and my comments on some of the common questions charities raise about engaging in social media:

What are the best ways to manage your social media? Hootsuite and Tweet Deck are two options that allow you to manage your Twitter and other media accounts all on one screen. I’ve tried both platforms. Many people prefer Hootsuite which permits you to time your tweets and measure how people are responding. I encourage charities to experiment to see which option works best for managing your social media efforts.

How do you grow your social media presence? Many successful social media organizations begin small but they are able to provide compelling information that gains traction among their supporters. One participant in the live discussion said that the best way to grow your network is to deepen your existing connections. The key is to use social media to leverage your existing friends, fans or donors to reach new ones that are within their network. Those strong ties provide solid means to acquire new supporters.

How can charities combat the negative perception of social media? Some organizations are reluctant to try social media because they are afraid of losing control of their image if, for example, something disfavorable is posted or retweeted. Allison notes that while you cannot control what anyone says about you, through social media you can build a network of supporters who will “have your back” and in this way you can turn critics into friends through conversations online.

To learn more about social media for planned gifts, please call Crescendo at 1-800-858-9154 or email us at crescendo@cresmail.com.

How Does Your Charity Get Started with Social Networking?

2011-04-13T09:50:00.000-07:00

I recently participated in a live discussion on social media for nonprofits sponsored by the Chronicle of Philanthropy. Nonprofit consultant Allison Fine (also co-author of the Networked Nonprofit along with nonprofit social media guru Beth Kanter) advised nonprofits on how to engage in social media when resources are limited.

I wanted to share with you Allison’s helpful responses and my comments on some of the common questions charities raise about getting started in social media:

How do I know whether my charity should be on Facebook, use Twitter or start a blog? Allison pointed out that the only way to figure out what works best for your charity is by experimenting. Because social media tools are inexpensive and easy to setup, you can test posts (or tweets) until you see what media combination best communicates your mission and leads to the most effective interactions.

How much time should my charity devote to social networking? The time spent on social media varies by organization. Allison points out that channels like your blog, Facebook and Twitter need to be alive and “fed” with new material, but they don’t need to be watched every second of the day. Some organizations post several times a week while others post multiple times each day. Again, experimentation will help you determine the best balance for your social media efforts.

How do I measure the impact of social media on my organization? Beth Kanter has written extensively on using social media in connecting with and engaging people to deepen their relationship with charities. Her blog contains excellent ideas for evaluating your organization's social media ROI http://beth.typepad.com/beths_blog/roi/

To learn more about social media for planned gifts, please call Crescendo at 1-800-858-9154 or email us at crescendo@cresmail.com.

Why Engage Your Donors with Social Media?

2011-04-05T11:10:00.001-07:00

I participated in a recent webinar sponsored by Fundraising Success Magazine on leveraging online communities and social media strategies to engage your donors. The webinar began with a short informal survey of participants. The results only confirmed the growth of social networking among charities:

90% of participating charities responded that they are active in some form of social media.

91% said social media is not a “fad.”

50% said that their organization has created a social networking strategy.

The speakers pointed out that people are changing the way that they communicate with the rapid acceleration and capabilities of mobile phones used to facilitate social media. Social media is here to stay. The top social media platforms being visited by mobile phone are experiencing rapid growth (Facebook +121%, YouTube +74%, Twitter +71%).

Businesses and charities need to know how to make the shift to continue to be relevant in the changing social media environment. Social media requires time and investment, but permits greater opportunities for organizations and charities who engage in the technology. The future of the technology is understanding how to leverage information to make more meaningful engagements with your donors.

To learn more about social media for planned gifts, please call Crescendo at 1-800-858-9154 or email us at crescendo@cresmail.com.

What Successful Online Charities Know

2011-03-30T09:41:00.000-07:00

This is my second post on the important topic of the growth in online fundraising based on a recent interview with Steve McLaughlin, Director of Internet Solutions at Blackbaud. In the interview, Steve shared the results of the 2010 online giving report and some of the online giving strategies that are paying off for organizations of all sizes.

Here are three of his strategies for online fundraising success:

Successful online charities identify who they are targeting and think a lot about the goals and objectives of their fundraising. They don’t let technology get in the way of their audience. In other words, the online strategy still needs to be built on relationships.

Successful online charities do a fair amount of testing to learn from what happens when they make changes in the online giving experience. Maybe your donation form needs to be simplified or fields should be eliminated. You will never know unless you test your strategies with your donor audience.

Successful online charities use multichannel communications. It’s a combination of online and offline fundraising that works well for most organizations. McLaughlin reported that the results of calling donors who make online gifts are often amazing – there is a significant incidence of second and third gifts in the same year.

While online fundraising is the wave of the future, print and other forms of marketing still play an important role. Because donors may respond to different types of media it is important to integrate your marketing. To explore an integrated marketing approach for effectively raising planned gifts, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

Growth in Online Giving Reenergizes Charitable Fundraising

2011-03-23T09:55:00.000-07:00

The growth in online giving is reenergizing charitable fundraising. A recent report by the Nonprofit Research Collaborative found that more organizations saw growth rather than declines in giving in 2010. 88% of nonprofits that saw fundraising increase in 2010 experienced a rise in online gifts according to a new Convio study.

I heard an insightful interview this week with Steve McLaughlin, Director of Internet Solutions at Blackbaud. Steve discussed the results of Blackbaud's 2010 online giving report and shared the following data and trends for online giving:

Online giving grew 35% in 2010 (compared to 6% growth in overall fundraising). Clearly online giving continues to drive results.

About 7.6% of total fundraising comes from online. (That’s grown from .05% 10 or 12 years ago.) This is significant because the increase in online giving is one of the largest increases in fundraising in years.

The online channel can be the great equalizer for organizations big and small. In 2010, small organizations that successfully adopted online technologies grew by 20%.

In the recession, organizations that were too heavily focused on expensive print and phone marketing strategies struggled when compared with those that adopted less expensive online approaches. It is clear that online giving continues to grow, even in recessionary periods. The charities that steadily increase their online presence will be able to measure their performance and, with innovations, should see continued growth in both online and offline giving.

To learn above effective online giving strategies for raising planned gifts, call Crescendo at 1-800-858-9154 and ask to speak to a marketing specialist.

California Charities Urged to Support AB 997

2011-03-14T15:03:00.001-07:00

The Northern California Planned Giving Council is urging California charities to support AB 997, a bill that would amend the California Professional Fiduciary Act in order to provide an exception for charities that serve as trustee of charitable trusts as part of their planned giving program.

The California Professional Fiduciary Act, which became effective on July 1, 2008, was designed to increase oversight of individual fiduciaries. It imposed licensing, reporting, and other requirements on trustees who serve as trustee for more than three individuals at one time.

While the law was aimed at individual fiduciaries, it appears to also apply to charities that serve as trustee of charitable trusts as part of their planned giving programs. AB 997 would correct this unintended consequence of the law by exempting charities and their staff members from the Act when the charity acts as trustee for certain charitable trusts.

For this bill to have a chance, legislators need to know this is an important issue for the planned giving community. Please write letters of support, either as individuals or on behalf of your charitable institutions. Letters are need as soon as possible.

Below are links to:

• NCPGC’s letter of support

• A sample letter for charities that wish to support the bill

• The text of AB 997

Please email a copy of your letter to Barbara Rhomberg, NCPGC Legislative Chair. Her email address is on the sample letter. Please also contact Barbara if you have questions or need additional information.

Can You Avoid 403(b) RMD with a 2011 IRA Rollover Gift?

2011-03-09T15:09:00.000-08:00

I received this question from one of our charitable clients. The donor owns both a 403(b) and a 401(k) and wishes to make a $42,000 IRA rollover to the charity, with the hope of reducing 403(b) income this year. The balance of the 403(b) is substantial and the donor has a significant required minimum distribution, whereas the donor’s balance and distribution from the IRA is small.

Because an IRA charitable rollover gift must be made from a qualified IRA (not a 401(k) or 403(b)), the donor plans to rollover funds from his 403(b) to his IRA to make the $42,000 gift to charity. The donor believes that in doing so he can reduce his RMD on his 403(b). The charity asked whether it is possible for the donor to avoid the 403(b) RMD with a 2011 IRA charitable rollover gift.

The problem here is that the law is clear that the distribution must be made from an IRA and that it qualifies for RMD. The RMD that it qualifies for is clearly IRA RMD. So, if a $42,000 distribution is made from the donor’s IRA in 2011 (after the rollover from the 403(b) has been made), this qualifies for $42,000 of the donor’s IRA RMD this year.

The better solution would be for the donor to have rolled over the entire 403(b) account into an IRA in 2010. Is it too late to do this now? The donor’s next 403(b) withdrawal is scheduled for April 1, and certainly there is enough time (usually give custodians four to six weeks) to make the rollover. The problem is that because the 403(b) money was in the donor’s account as of January 1 of 2011, the donor will still need to take a 403(b) distribution this year.

So, what are this donor’s options now? The best choice is for the donor to make the $42,000 IRA rollover gift from his IRA in 2011, qualifying for his IRA RMD and then rollover remaining monies from his 403(b) to his IRA account for future years. Assuming the IRA rollover in its current form continues to be reauthorized, the donor will have the option in the future years to rollover up to $100,000 from his IRA ro charity and this will qualify for his full RMD for each year in which the IRA rollover is in effect.

For more information on structuring IRA charitable rollover arrangements, please call Crescendo at 1-800-858-9154 and ask to speak to one of our attorneys.

The Growing Popularity of Charitable Life Estates with Donors in This Economy

2011-03-02T10:09:00.000-08:00

I’ve noticed the increased frequency of questions I’m receiving about charitable life estate arrangements. It seems that along with charitable bequests, life estates are becoming more popular with donors who want to make a commitment to their favorite charity, but don’t want to part with their cash reserves.

The increased popularity of life estate agreements makes sense when you consider that the donor can make a gift to you today and enjoy tax savings on this year’s return while continuing to live at home. Effectively, the donor makes a deductible gift without paying anything out of pocket. Sounds like a great deal, right?

A life estate may be a beneficial arrangement for both the charity and the donor so long as the property is of value to the charity (a marketable asset or something the charity can use for its exempt purpose) and is maintained by the donor (the donor does not commit waste on the premises).

Here are some of the issues that have come up in my recent conversations concerning charitable life estate arrangements:

Type of Property – A life estate only works for a personal residence or a farm. It will not work for someone who wishes to transfer their corporation and continue “running the business.” A person does not “live” in their business.

Transfer Document – The document is not a trust agreement or contract. It is a simple deed under state law. You will want legal counsel to assist in drafting a provision in the deed that reserves the donor’s life use.

Contractual Arrangement – There is a very important agreement that should be signed separate from the deed called an MIT agreement or “Maintenance, Insurance and Taxes.” This agreement ensures that the donor will keep the property in good condition. Email me to view a sample agreement.

Exit Strategies – It is possible for the donor to receive a second deduction for a gift back of their life interest, if the donor ever moves from the premises. The donor has a right to the present value of their life interest (in cash) if the property is jointly sold. The donor's interest in the property may also be exchanged for life income in the form of a charitable gift annuity or charitable remainder trust.

For more information on structuring charitable life estate arrangements, please call Crescendo at 1-800-858-9154 and ask to speak to one of our attorneys.

Real Estate Gift Dilemma: Would You Choose the CGA or CRAT?

2011-02-24T09:56:00.000-08:00

I recently spoke with a gift planner at a California foundation who was working with a donor interested in contributing a $1.6 million piece of commercial real estate. The gift planner agreed that the best vehicle for a gift of real estate would be a FLIP Unitrust, which provides a safeguard by not requiring payment until the property is sold. However, the donor insisted that he wanted the fixed income of a charitable gift annuity (CGA) or charitable remainder annuity trust (CRAT).

While I explained that neither vehicle was great for real estate (most organizations will not accept real estate for fixed income arrangements), if the donor insisted, the charity should only accept on the condition of a “buyer waiting in the wings.” That is, while there could be no clear indicators of a binding agreement to sell prior to the donor transferring the property (no money exchanged, signed contract or property in escrow), if the donor or charity identified a buyer willing to purchase the property ahead of time and the charity could turn around and immediately resell, the deal might be palatable.

The gift planner explained that the Foundation’s gift acceptance policy did not prohibit acceptance of real estate gifts for CGAs or CRATs. Therefore, assuming a buyer could be found waiting, the gift planner wondered which fixed income vehicle would be better for both the organization and the donor. Here are some of the factors weighed in our cost/benefit analysis and reasons why the CGA was the clear winner.

Donor would like certainty of CGA payout. A CRAT with a high payout or long life expectancy has the potential to run out before the end of the donor’s lifetime often leading to a donor relations problem. The donor would prefer the certainty of the knowing that CGA lifetime payments are backed by all of the organization’s assets.

Organization could lessen CGA burden. The organization could lessen its burden by reducing the ACGA rate (and give proper notification to the state and donor), issue the CGA for less than the appraised value and/or offer a deferred annuity (perhaps deferring the payment 2-3 years to permit time to sell the property if there was no identified buyer).

CGA would be easier to administer. A simple fixed payment made to the donor, issuing of 1099s and meeting state reporting requirements would be easier for the organization than making complex four-tier accounting distributions from a CRAT. Also, the donor would like the added CGA benefit of tax-free income.

CGA reserve is large enough to spread risk. The gift planner questioned whether the performance of their reserve pool would be enough to sustain an annual $80,000 payout. However, with a pool of 61 contracts and roughly $1.5 million the organization recognized that it had the ability to take on and spread some risk. Also, the organization would consider reinsurance as another risk avoidance strategy.

You can see why the organization selected the CGA over the CRAT for this gift. In choosing the CGA, the biggest issues the charity faced in accepting real estate was selling on the property and taking on more risk. Assuming that the property could be sold immediately, or the payout deferred long enough to sell, the organization planned to explore reinsurance as one way to lessen the Foundation’s risk.

For an analysis of your real estate gift scenario, please call Crescendo at 1-800-858-9154 and ask to speak to one of our attorneys.

Six Relationship Secrets to Easily Raise Money for Your Charity

2011-02-16T11:06:00.000-08:00

I spoke this week with Marshall Howard, philanthropic trainer and author of “Let's Have Lunch Together.” Marshall recently released a training series entitled “Six Secrets to Easily Raise Money.” I asked him to share with me his vision of how charities can become more effective at raising gifts.

Marshall said that one of the biggest secrets is that relationship emotion is the most powerful emotion (more powerful than mission emotion) for compelling gifts. People decide emotionally and justify logically about just about everything they do. And yet, when a charity wants a prospective donor to help, they often become logical and informational rather than relational. Consequently, charities may struggle to connect emotionally with people because they are so focused on mission, as opposed to cultivating the donor relationship.

Over 75% of people who attend fundraising events are there because they cannot say no to the asker. Most of these persons have no relationship to the hosting organization, but they have a relationship with the person who made the “ask.” Facebook Founder Mark Zuckerberg made his $100 million contribution to Newark schools because he built a relationship with Newark Mayor Cory Booker. Zuckerberg reportedly had never stepped foot in a Newark school prior to the gift. Similarly, Warren Buffet gave $37 billion to the Gates Foundation because of his relationship with Bill and Melinda Gates.

Here are some of the take aways from Marshall on building relationships:

First comes the relationship and then the charity’s mission message will be heard.

You can build relationships in many ways – in person, on the phone or even by e-mail.

Relationships are a repeatable, measurable process. The ability to measure a person’s relationship means you can better measure “when” to make the “ask.”

If you can build the relationship, you will be able to discover a person’s resources and community and know “what” to ask for.

When you think of a relationship as a series of positive emotional connections between two people that produces trust, Marshall says that trust opens a huge door for giving. Where there is trust, the message about the organization and the “ask” is very different and the person will listen and evaluate it in light of their relationship with the “asker.”

To learn more of Marshall’s secrets visit http://www.marshallhoward.com/. For new ways to multiply your donor relationships through eMarketing visit http://www.giftlegacy.com/ or call 1-800-858-9154.

New CGA vs. Addition to CRUT: Which Gift Produces Better Income for the Donor?

2011-02-10T09:54:00.000-08:00

A gift planner called me this week and said that her donor was looking for higher income. The donor already had a charitable remainder unitrust (CRUT) with the organization. The trust was valued at $357,000 on January 1 and payments at the trust 8% rate would total approximately $28,000 this year.

The donor desired to make a gift of $100,000 of highly appreciated publicly traded stock for increased life income. The gift planner wondered whether it was better for the donor to make an addition to the CRUT or create a new charitable gift annuity (CGA) for the donor and his spouse (both age 85) with the stock gift. Ultimately, we decided that the charitable gift annuity would be the best solution for this donor. Here is an analysis of this case and the issues to review when weighing a CGA vs. CRT decision:

Donor’s ages -- A two life CGA for donor and spouse produces a 7.1% payout under current ACGA rates. While the gift planner pointed out that the potential CGA payout percentage was lower than the current 8% CRUT payout, the fact that annual CRUT returns were less than 8% was a variable in our decision.

Projected life expectancy -- The joint expectancy of these donors is 10.5 years under the 2002 IRA Table. A CRUT may be selected for longer expectancies because of the potential for growth in income. Here, given current depletion (rather than growth) in the trust coupled with the shorter timetable a fixed payment charitable gift annuity made more sense.

Potential payout -- Because the CRUT cut into principal annually to meet the 8% payout, the actual dollar amount that would be paid from the trust as a result of the addition could be less than the amount paid from the 7.1% CGA. The gift planner agreed that given the donor’s age and risk aversion, he would like the security of knowing that the CGA payment amount was fixed.

Returns -- While low market returns together with the high required payout created a cycle of annual trust depletion and declining income from the CRUT, the return of the charity’s CGA reserve pool was not a primary factor in the analysis. The donor’s income would be fixed regardless of market returns and provided that the organization used ACGA rates, the assumption is that there would be at least a 50% residuum (historically 70%-80%) of the gift amount left for charity.

Keep in mind, the decision here was based on the facts provided above. Your decision may be different depending on your donor’s ages, projected life expectancy, potential payout and returns. This analysis provides some of the issues to spot next time you need to make a similar comparison for one of your donors. For more information on comparing CRTs and CGAs, please call a Crescendo attorney at 1-800-858-9154 or e-mail us at Crescendo@cresmail.com.

Why You Shouldn't Be Using the Current AFR for Present Value Gift Calculations

2011-02-03T15:59:00.000-08:00

I am still surprised when I receive calls from charities that are using the Section 7520 rate (AFR) to calculate gift present values for their CFOs. While choosing the current interest rate is certainly an easy way to determine a discount rate for calculation purposes, it doesn’t make a lot of sense for multiple reasons.

1. AFRs are at a Historic Low – In December, we reached a record low of 1.8% for the Sec. 7520 rate. While the rate came up slightly in January to 2.4% and in February to 2.8%, we are still at a historic low. Discounting charitable gifts at such low rates has the effect of inflating the gift value. While many organizations wish to book charitable gifts at a higher value, use of the AFR as a discount rate may not fully capture the actual value of the gift to charity.

2. The AFR Changes Monthly – The IRS publishes the AFR typically in the third week of every month. Results will vary when using the AFR for valuation depending upon the month in which the calculation is made. Using the AFR leads to inconsistent results (like comparing apples and oranges) when different discount rates are used each year to value the same gifts. The most consistent valuation method is to select and use the same discount rate each year.

3. The AFR Is Only a Current Rate – The Sec. 7520 rate is used to determine charitable deductions based on the AFR for the month in which the gift is made or one of the two prior months. Because the AFR is a current snapshot of what a gift is valued on a given date in IRS terms, it does not reflect the future discount rate or how your institution or CFO may wish to measure gifts.

While use of the AFR for valuation purposes may have made sense in the past when rates were higher, many CFOs discount gifts by a rate greater than the current AFR. By setting one consistent rate that takes into account the manner in which an institution chooses to book charitable gifts, a charity can value gifts each year based on an objective, measurable standard that reflects financial terms, both currently and in the future.

To learn more about performing present value calculations for CFO purposes, please call 1-800-858-9154 and ask to speak to a Crescendo attorney.

With the Web and Your Donors It's Still All About Building Relationship

2011-01-19T10:18:00.000-08:00

A recent survey conducted by Network for Good concluded that online charitable giving is still all about the donor relationship. New changes in technology for the web, email and social networking makes it possible for you to reach and educate a greater audience of donors. But in the end, it’s the level of connection to an organization created through an effective “web experience” that makes donors more likely to give and increase their contributions over time.

Here are a few of the studies’ findings of interest to those of us who are raising planned gifts:

1. Branding is still the key – The study found that donors made larger gifts and were more likely to increase contributions made to charities who had branded web pages, as opposed to those who offered online giving options through generic pages. The lesson here is that YOU need to be in control of your charity’s identity and messaging. If you cannot brand your website to match your other marketing media for a consistent message or make daily changes to the content throughout your site to reflect what’s happening in the organization, your marketing falls short. The most effective online marketing programs will have active web management tools that permit the charity to create, mold and shape an organization’s donor communications 24/7 in a meaningful way.

2. Donors want relationship – The study suggested that there is “no excuse” for failure to improve the online giving experience with donors who want relationship. The success of Facebook, Twitter and other social networking shows the growing need for people to be in communities and build relationship, even when they are doing something as impersonal as staring into a laptop computer. Donors crave relationship. The most effective planned gifts marketing programs will build on social networking concepts to help donors to create their giving goals online and then share this information with advisors and gift planners to make a plan that achieves these goals. The charities that offer online wills planning options with the ability to make “friends” will build the type of lifelong donor relationships that form the basis for bequests and other planned gifts.

If you want to be in control of your charity’s branding and planned giving message or are interested in learning more about how to build lifelong donor relationships through social networking, please give us a call at 1-800-858-9154. A GiftLegacy marketing specialist will be happy to share with you the best new strategies for building meaningful online relationships with your donors.

The Impact of Higher Exemptions on Giving and What Your Charity Should Do About It

2011-01-13T05:29:00.000-08:00

I’m writing this post from the Heckerling Estate Planning Conference in Orlando Florida where, as you might imagine, attorneys are very interested in the impact of the recent tax changes on planning. With the unification of gift and estate taxes and the potential that a married couple could give away $10 million tax free, the percentage of taxable estates in the U.S. will decline sharply in the next two years.

Many charities are wondering what the impact will be of higher exemptions on charitable giving if the majority of individuals no longer need a charitable deduction to reduce gift and estate tax. While tax savings may be a factor in philanthropy, numerous studies have shown that the charitable deduction is not the primary reason donors give. Donors give because they believe in the mission of an organization and see giving as an expression of their deepest goals and desires.

Here are a few considerations as you begin marketing gifts in the new tax regime:

Put the donor first - Today’s donors want to know that their gift makes a difference and they need to see in tangible ways how making a gift fulfills their goals. When you meet with donors, one of the most important skills to develop is listening. One of the first questions I like to ask a donor is a question about themselves –Tell me about you? This question is often a first step to revealing a donor’s life story, information about their family and the donor life aspirations. Once you understand more about your donor you will know how to present a gift opportunity that helps them reach their life dreams.
Don’t neglect your mission – Donors must know that you do! Your web, email and print marketing should all explain what your organization aims to accomplish. If a donor is to achieve their goals through giving, they need to know enough about your work to see if their goals are in alignment. Regularly updated content continually drives new and repeat visitors to your website. So, if you can provide a weekly update on the front page of your site and send out an email linking to your organization’s “latest news” this is a great way to keep your donors informed about your ongoing charitable mission.
Tug on Heart Strings – Donors also want to “feel” that their giving is worthwhile. Websites featuring donor stories that supporters can identify with (alumns of the same school, people with shared background or interests) are particularly effective at tugging on heart strings. Pictures alone may be the best representation of your mission. Find a good photographer who can take heart touching pictures of the people your organization has helped. Rotate these pictures on the front page of your site to evoke feelings like “this person needs my support” or “it feels good to give to this charity.” These pictures will touch your donors’ hearts encouraging a response to give.
Exercise good stewardship – Never forget to thank a donor who makes a gift. A thanked donor is a happy donor and one who is more likely to give again. Be sure to follow-up with donors and prospects at least once a year. Many organizations make annual visits, send birthday cards and holiday greetings and provide annual reports to keep in touch with their donors. You should consider writing at least one handwritten communication each year or calling your donors on the phone which provides for a personal touch.

The recent changes in U.S. tax law will have less impact on your giving totals if you remain focused on your donor’s goals, presenting your mission and maintaining relationships. If you are looking for ways to improve and multiply your donor relationships in 2011, please call us at 1-800-858-9154 and ask to speak to one of our GiftLegacy team members.

Update on California Plan Your Giving

2011-01-06T09:40:00.000-08:00

In a previous post, I wrote about a group of representatives from various non-profits and professionals who were instrumental in getting the California Legislature to proclaim October 1,2010 as “California Plan Your Giving Day.” These individuals have asked me to post an update on their efforts and link to their new web site www.californiaplanyourgiving.org.

According to the organizers, the “California Plan Your Giving Day” resulted in 55 planned gift declarations in less than three months—and it’s now a new state-wide initiative called “California Plan Your Giving.” The project’s vision is for all Californians to leave the world a better place for future generations by making a meaningful gift to charity through their estate plan. The idea is to get Californians to announce meaningful gifts to charity in their wills so planned gifts become commonplace. The group says that it hopes to encourage every day Californians to make a to pledge of 10% of their estate to a charity (or charities) of their choice and secure 3,000 Californians’ good faith commitments within the next 3-5 years. They plan to celebrate their progress each year on October 1.

Future efforts will be directed toward 10 California cities with the goal of gaining 100 commitments per city, each year over a three year period. Planned Giving Forums throughout the state along with regional and community foundations will lead the project teams in each city. For more information on California Plan Your Giving, you can visit their website or email info@californiaplanyourgiving.org. If you’re a Californian, you can add your own planned gift intention online.

Avoiding Gift Acceptance GAPs

2010-12-29T15:21:00.000-08:00

This is my second post based on a discussion with John Taylor of North Carolina State University about pitfalls to avoid in creating an effective gift acceptance policy. One of the issues John most often sees is GAPs in policies. Policies that omit certain types of property and giving options leave no guidance for gift officers to make decisions. For some gifts, you need a way to say “No!”

Here are just a few of the omissions in organizational policies that can make it difficult to know when to say “No!”

Little or no discussion of tangible personal property gifts. Many policies focus on gifts of real property. However, it is important to have policies on the type of personal property your institution is willing to accept. Can you use the property? One of our art museum clients told me that they turn down numerous gifts of art that don’t fit within their collection. Is it saleable? One charity I talked with wanted advice on accepting and selling an airplane gift. Who you will work with to sell your more difficult objects (I’ve heard everything from stuffed boars heads to bull semen)?

No discussion of gifts of closely held stock and restricted stock. Most gift acceptance policies cover publicly traded stock, but there is very little information available on other types of stock. Under what conditions will you accept the stock of a closely-held family business? Can it be resold? Who will handle the stock valuation? Are you willing to accept restricted stock and how long will you hold it if it can’t be sold right away?

No discussion of intellectual property and patent gifts. Many policies have little or no discussion of IP issues. Will you accept these gifts? How are they to be valued? Just because the intellectual property or patent has value to the donor does not mean it has value to the organization. While there is less written on IP gifts, you need to have some discussion of these issues in your policies as opposed to blanket acceptance without knowledge of what to do with the gift.

No discussion of gifts you can’t or shouldn’t accept. For example, it should be noted that you cannot accept EE Bonds (they must be cashed in first). Many charities also include policies against acceptance of frequent flier miles and time shares, which are unhelpful gifts.

The New Year might be a good time to review your gift acceptance policy. Filling in the GAPs can help provide direction for you and your colleagues so that next time a more difficult gift is offered, you know what to do. For more information on acceptance of difficult gifts or crafting your gift acceptance policy, please contact Crescendo at 1-800-858-9154 and ask to speak to one of our attorneys.

Gift Acceptance Policy Pitfalls from the Trenches

2010-12-15T09:47:00.000-08:00

This is a follow-up to an earlier post on gift acceptance policies. Following that post, I received a number of good comments and sample policies from readers. One of several insightful emails came from John Taylor of North Carolina State University. John has consulted with a number of institutions to develop gift acceptance policies and shared with me his extensive catalogue of gift acceptance policy documents.

After reviewing the policies John and others provided, it is clear that an effective gift acceptance policy should be concise and make it possible to say “No!” to gifts that would be bad or harmful to the charity. John shared with me some of the general pitfalls he has seen in crafting institutional policies and ways to avoid these pitfalls.

1. Making the policy too long. Many policies try to be the “be all and end all” document for the charity. John said that he has seen some policies that are more than 500 pages in length. A good policy can provide guidance without addressing every potential donor gift scenario. NCSU’s policy is 29 pages and even includes examples and references to appropriate IRS documents.

2. Talking only about standard gifts. Many policies focus on the basic gift models (bequests, CGAs, CRTs, etc.) when what they really need to talk about is the nonstandard types of gifts and policies to follow if they come about. A good policy needs to address unique gifts and unusual issues such as when to turn down gifts of real estate, how to avoid potential UBIT and what to do with unwanted tangible personal property gifts.

3. Not tailoring policies to your specific institution. More often than not, I find that organizations have adopted another charity’s policy as their own without considering whether all of the provisions work for their institution. What might be related use for one charity is unrelated use for another. John told the story of one charity who forgot to change the name of the institution from which they “borrowed” their policy.

No one policy is alike, so make sure that your policy is helpful to your organization’s gift acceptance process. A well-written succinct policy can guide you and your staff to make the right decisions at the right time. Check out my next blog post where I plan discuss some of the GAPs to avoid in crafting your organization’s gift acceptance policy.

For more information on crafting your gift acceptance policy or to receive a qualified GiftAttorney referral, please contact Crescendo at 1-800-858-9154 and ask to speak to one of our attorneys.

When Does a CRUT Need an IST?

2010-12-08T09:45:00.000-08:00

I received a call this week from a gift planner who wanted to know more about use of independent special trustees (IST) for charitable remainder unitrusts (CRUTs). In particular, he was looking for the type of situations where an IST might be necessary to avoid violation of IRS rules.

I reviewed a number of PLRs and case studies in this area, and came up with this short list of situations where an IST is needed:

• To value difficult to value assets – An IST is necessary to value assets without a readily ascertainable fair market value, such as stock of a privately held company. The IST shields the donor acting as trustee from any charge of self-dealing with respect to trust assets.

• To make sophisticated investment decisions – For example, when a trust is invested in a commercial annuity, an IST is needed to make all decisions with respect to withdrawals, cancellations, redemptions, valuation and other aspects of managing the commercial annuity contract. Again, the goal here is to avoid violation of the self-dealing rules.

• To apportion income among a class of beneficiaries – An Education NIMCRUT permitting discretionary distributions requires an IST to distribute income among children in accordance with trust standards. Because the trustee is granted discretionary power, an IST is needed to avoid disqualification of the CRUT under the grantor trust rules.

• To sell contributed property or shares upon funding – When the objective of the trust is to sell contributed property immediately after the trust is funded, an IST is needed to avoid any appearance of a prearranged sale. Following the sale, the donor can resume trustee duties.

• To allocate income among charitable and non charitable beneficiaries or any other “sprinkling power” – Without an IST, the grant of discretionary power raises the possibility of disqualification of the trust as a grantor trust. Note: The IST may exercise this power so long as a reasonable portion of the unitrust amount is allocated and paid to the non charitable beneficiaries annually.

If your CRUT gift contemplates one of these scenarios, check to see that your trust document includes the power to appoint an IST. Use of a knowledgeable IST will help ensure successful trust administration -- a recipe for keeping you and your donors happy.

For more information on charitable remainder trusts and who may act as trustee, please contact a Crescendo attorney by calling 1-800-858-9154 or e-mail crescendo@cresmail.com.

Questions to Ask in the Inspection of a Real Property Gift

2010-12-02T16:46:00.000-08:00

In my last post, I discussed some of the issues to consider when accepting commercial property or environmentally suspect property. As I explained, an Environmental Impact Survey (EIS) is the way many charities determine whether or not to accept property where commercial or other hazardous activity has taken place. In this post I want to give you some questions to ask in an environmental inspection of a real property gift.

1. What kind of property is this? There should be a very basic assessment made as to the type of property. Is it acreage (a farm, ranch or other land), commercial property (urban, industrial, with or without improvements) or residential property? You should also identify whether structures exist on the property and the type of structures present (brick, frame, etc.).

2. Who owns/has owned the property? It is important to ask who the current owner is, when they acquired the property and from whom. If you can obtain contact information from prior owners this may be helpful in identifying prior uses of the land/buildings. (Scrutinize sites with a history of the following: manufacturing, wood refinishing, dry cleaning, laboratories, automotive maintenance and gas stations).

3. Is the property environmentally suspect? Ask if there is any reason to believe that the land or buildings were at any time or currently are contaminated by a toxic or dangerous substance. Note whether an onsite inspection revealed any signs of contamination (such as evidence of asbestos, oil or petroleum products, stains from chemical spills, discolored water or soil, noxious odors, storage tanks, underground pipelines or septic systems).

Based on the answers to the above questions you should be able to identify if there is evidence of environmental contamination. Also, check to see the type of activities that have taken place on neighboring properties and how this may impact the proposed property gift.

To receive a free checklist for your charity’s environmental impact survey please e-mail us at crescendo@cresmail.com or call 1-800-858-0154 and ask to speak with an attorney.

Ways You Can Accept Environmentally Suspect Property Gifts

2010-11-18T07:07:00.000-08:00

As I mentioned in my last post, a gift of property with environmental hazards can pose a great risk, since the accepting charity generally takes title to the property. What about property that is not deemed hazardous but is merely environmentally suspect? For example, a Phase 3 EIS soil sample may not reveal contamination on the site of a former manufacturing facility. However, you suspect that the property could still be hazardous.

There are two options to consider if you still wish to accept this property gift:

• Donor as Trustee – When a donor wants to fund a CRT with environmentally suspect property, one option is to request that the donor serve as trustee until the property is sold. Once the property is sold the charity may take over as trustee without ever having appeared in the property’s chain of title.

• Create an LLC – Another option is for the donor to transfer the environmentally suspect property to a single-member LLC. The LLC would then sell the property. Once the property is sold the LLC could distribute the sales proceeds to the charity. Again, this strategy keeps the charity out of the chain of title of the environmentally suspect property.

At some point, the environmental risks may outweigh the benefits of accepting certain property. At this point, the charity may decide to refuse a gift of real estate. And it’s okay to say no! As one charity told me, sometimes it’s better to wait for the right property to come along then to take on a “property nightmare” that isn’t worth the remediation costs.

For more information on accepting environmentally suspect property gifts, please e-mail crescendo@cresmail.com or call 1-800-858-9154 and ask to speak to one of our attorneys.

Avoiding Environmentally Hazardous Property Gifts

2010-11-11T07:58:00.000-08:00

I heard a planned giving officer at a large university say that the university has turned down over 50 gifts in recent years due to environmental hazards. You can imagine the surprise of the university’s representative when he visited one such property and found a tin can covering up the opening to an oil well!

A gift of property with environmental hazards can pose a great risk, since the accepting charity generally takes title to the property. Once the charity is in the chain of title, it becomes subject to potentially unlimited liability. The charity is now on the hook for any remediation charges associated with cleaning up contamination on the property. And these charges can be costly!

What steps can a charity take to avoid acceptance of and liability for environmentally hazardous activity?

• Clear gift acceptance policies – A charity’s policy must clarify whether it will accept commercial property, factors to look for in evaluating potential hazards and the point at which the charity should obtain an environmental impact survey (EIS). The charity should also specify the costs it is willing to bear to evaluate suspect property.

• Environmental Impact Surveys – An EIS is the way many charities determine whether or not to accept property where commercial or other hazardous activity has taken place. An EIS can be expensive, depending on the level of testing. Phase 1 usually involves a property viewing, whereas Phase 2 or Phase 3 may include the taking and testing of soil samples. In assessing the level of testing, it is important to balance the costs with the potential liability issues.

What about property that is not deemed hazardous but is merely environmentally suspect? Look for my next post or for more information on gift acceptance issues please call 1-800-858-9154 and ask to speak with one of Crescendo's attorneys.

A Way to Make Your Bequests Enforceable (Sample Agreement Included)

2010-11-04T09:55:00.000-07:00

Several of you have written to me concerning the enforceability of donor pledges or bequests. While a donor may make a commitment to you in their current will or trust, that plan could be revised in the future eliminating the gift to your organization. Because bequests are by nature revocable until death, there is no way to ensure irrevocability aside from a separate written agreement signed by the donor and enforceable under state law.

While there are differences in opinion as to whether or not a charity should make a bequest enforceable (i.e. Are you prepared to enforce the contract against your donor?), it is possible to do so under state law. Because donors are often willing to sign a written pledge agreement, I have included the sample agreement below. If your organization decides to use this agreement, your charity’s counsel should review and modify it to comply with your state’s contract law.

ENFORCEABLE PLEDGE AGREEMENT

BETWEEN [DONOR’S NAME] AND [CHARITY’S NAME]

Recognizing that the [CHARITY] will rely upon my pledge to create, fund, maintain and/or administer [ENDOWMENT, CHAIR, ETC…] for the benefit of the [CHARITY], and recognizing that others may make gifts to the [ENDOWMENT, CHAIR, ETC…] as a result of my contribution, I hereby irrevocably pledge, in consideration thereof, to give [IRA, RETIREMENT PLAN, CHECKING, SAVINGS, ETC…] at the time of my death. Attached is a copy of my [WILL, TRUST, IRA BENEFICIARY DESIGNATION, ETC…] demonstrating [CHARITY] as the primary beneficiary of [ASSET]. In the event that at the time of my death, my [IRA, RETIREMENT PLAN, CHECKING, SAVINGS, ETC…] contains insufficient funds to make the gift in whole, the remaining value shall be gifted from my estate to make the total gift amount of [$AMOUNT]. Attached is a copy of the relevant provision of my will or trust which makes provision for payment of this pledge. Payments made during my lifetime will offset this pledge if designated by me in writing as in satisfaction of the pledge.

If [ENDOWMENT, CHAIR, ETC…] is terminated, becomes obsolete or impractical by reasons beyond [CHARITY’S] control and if [CHARITY] is able to replace, redirect or reuse the [ENDOWMENT, CHAIR, ETC…], [DONOR’S NAME] will be placed on the replacement [ENDOWMENT, CHAIR, ETC…] in substantially the same manner as it appeared in the original. If the [ENDOWMENT, CHAIR, ETC…] is terminated because of obsolescence or other circumstances and is not replaced or continued, the donor’s contribution will be acknowledged with a [ACKNOWLEDGEMENT].

This Agreement may be altered only by a subsequent agreement in writing executed by me and by the [CHARITY]. It is my intention that this Agreement shall create obligations that are binding and enforceable against me, my heirs, executors, administrators, representatives, assigns and estate. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of [_____], and shall be treated for all purposes as a sealed instrument.

Witness my hand and seal this __ day of ____ , 20__.

____________________________
DONOR’S NAME

For more information on drafting a pledge agreement that is enforceable under your state law please e-mail crescendo@cresmail.com or call 1-800-858-9154 and ask to speak to one of our attorneys.

Are You Compliant With Charitable Solicitation Requirements?

2010-10-28T09:42:00.000-07:00

I’m always surprised when I talk with charity fundraisers who are not aware of or otherwise fail to comply with charitable solicitation requirements. Because regulation of fundraising activities varies by state and locality, it’s important for charities to know the rules for the jurisdictions in which they market and raise gifts.

Recently, I spoke with charitable tax expert Danika Mendrygal of Haynes and Boone, LLP in Dallas, Texas. Danika explained that because of the vast requirements at the state and now local and municipal levels, it becomes difficult for many small to mid-size nonprofits to be completely compliant with all solicitation requirements.

What is typically required for charitable solicitation compliance? While the requirements may vary, most states and localities require:
- an initial registration statement (size varies from one to multiple pages)
- administrative fee (usually a nominal amount)
- some form of annual reporting (often can be met by forwarding the organization’s Form 990)
- a closing statement (reporting gifts, total receipts, expenditures, etc.)

37 jurisdictions (including D.C.) accept a uniform registration statement and most require an additional submission. The uniform statement simplifies the process for some charities. Danika said that the local solicitation requirements can be more difficult for nonprofits to meet and several have been struck down by courts.

In the past, some charities have taken the stance that their activities do not constitute solicitation and, therefore, they are not required to comply with these requirements. According to Danika, the problem with this decision is that the IRS is now creating notice of state compliance.

In the revised Form 990, there is a new question asking charities to name the states in which they fundraise and are registered to solicit. Because 990s are publicly available, this question gives state and local bodies the ability to cross-check and determine which charities are and are not in compliance.

Regulators may take a variety of actions upon discovering a charity’s noncompliance. Danika said that some regulators will call a charity to request that the charity register to solicit and even explain what needs to be done to comply. Others may move immediately to enforce penalties under state rules.

If you are fundraising and are unaware of whether your activities meet state and local requirements, please call Crescendo at 1-800-858-9154 for a qualified attorney referral. For more information on Crescendo’s planned giving software, eMarketing, education and legal support services please visit www.Crescendointeractive.com.

The Rise of the Testamentary Unitrust

2010-10-21T10:48:00.000-07:00

Recently, I have received a number of calls inquiring about testamentary charitable remainder unitrusts. With the current economy, many donors desire to hold on to their property during their lifetimes. Your donors may wish to make certain that they have enough income to care for their needs or pay for long-term care if needed.

Your donors also want to provide for family and make future gifts to charity. The rise of the testamentary unitrust makes sense because it permits a donor to maintain their property holdings during life but satisfy their other goals when they pass away.

I spoke with one gift planner who is working with a donor that owns a farm in Illinois. The donor wanted to continue to farm the property and receive income during her life, but also wanted to help her two grandsons. Because neither grandson had an interest in farming, she knew that if she gave the farm to the grandsons they would “cash out.” The solution was to allow her to maintain the farm and continue to receive income from the property for her lifetime and then fund a term of years testamentary unitrust for the two grandsons at her death.

Here are some things to keep in mind when illustrating testamentary unitrusts:

-Projected Date of Death – Because a testamentary unitrust is funded at a donor’s death, the illustration you provide today is a picture of the possible future trust benefits. The actual trust calculation will be performed at death. Since you do not know the actual date the donor will pass away, you may create your illustration by determining the donor’s life expectancy (use the Crescendo Calculator) and then select a gift date that is projected to begin at expectancy. Another option is to use a date three to five years in the future.

-Rate of the Month – Again, here you have to make some assumptions to perform the testamentary unitrust calculation. You do not know what the rate of the month will be on the donor’s date of death. Current rates are at a historic low, with the October and November AFRs hitting a record 2.0%. For this reason, you may wish to run the calculation using a higher AFR, since interest rates are projected to rise in future years.

-Passing the 10% Minimum Deduction Test – you may need to do a term of years trust if the grandchildren are young. In the above instance, the two grandsons were in their early 20s and a trust for one or both of their lives may not qualify. Keep in mind that the AFR at time of death will also be a determining factor in trust qualification.

-Trust Document – If there is more than one beneficiary receiving the payment for a term of years, you will need to include language in the trust document specifying the beneficiaries and how the payments should be divided. The beneficiaries for a term of years trust do not need to be named. For example, you can establish a trust to benefit “my grandchildren.” You will also need to specify what happens if one beneficiary passes away. Does all income go to the remaining beneficiaries or to the heirs of the deceased beneficiary?

These are just a few of the issues that arise when discussing testamentary charitable unitrusts with clients. If you have further questions about this or other gift options, please contact Crescendo at 1-800-858-9154 and ask to speak to one of our attorneys.

eMarketer of the Year Sees a Growing Number of Direct Gifts and Online Acknowledgements

2010-10-07T09:21:00.000-07:00

Last week, Crescendo awarded Glenn Pittsford of Texas A&M University Foundation the 2010 eMarketer of the Year Award at the seventh annual Practical Planned Giving Conference (PPGC) in Chicago. Each year the award goes to the most successful planned gifts fundraiser who fully utilizes Crescendo’s GiftLegacy eMarketing system.

Glenn is well deserving of this year’s award. Over the past two years, Glenn has raised over $100 million in planned gifts for the Foundation as a result of his eMarketing efforts. In talking with Glenn, I was struck by a term he used over and over again – direct gifts. Glenn shared with me how he has received gifts not just as a result of but directly from contacts made on his website (www.tamugift.org) and responses to the Foundation’s eNewsletter.

Here are just a few examples of the Texas A&M University Foundation’s direct gifts:

-Donor responded to Foundation’s eNewsletter discussing bequests and made Foundation the beneficiary of his $30,000 life insurance policy.
-Donor made a $25,000 bequest after reading information about bequest giving on the Foundation’s planned giving website.
-Donor made a $280,000 IRA gift as a result of an eBrochure request made from the Foundation’s website. (Just this week, Glenn has had already five requests for eBrochures!)
-Donor responded to an e-mail offer for additional information on planned giving and made a $1,900 IRD gift.

Glenn also shared several examples of donors documenting gifts using the Foundation’s online Heritage Membership Form. The form allows donors to acknowledge their desire to support the Foundation and document their bequest commitments.

-Donor acknowledged $50,000 bequest.
-Donor documented $650,000 total bequest plus IRA gift.
-Donor documented $50,000 bequest.
-Donor documented 100,000 bequest.

The frequency of direct gifts and online gift acknowledgements show the true power of eMarketing for planned gifts. While there may be a variety of reasons donors ultimately make a gift, Glenn says that the ability to receive and document gifts from the web and e-mail contacts make his job easier.

As for Glenn’s future plans, the Foundation plans to market gift annuities heavily this fall and will rely on electronic methods (including an e-mail appeal) to reach new donors. Congratulations again to Glenn and all of the staff at the Texas A&M University Foundation for their success!

Impact of Record Low October AFR on Gift Qualification

2010-09-22T10:05:00.000-07:00

This is an update to an earlier blog post on the impact of the low September 2.4% AFR on gift qualification. The IRS recently announced the October Section 7520 Rate (AFR) used to calculate charitable deductions at a record low 2.0%. The result is disqualification of many planned gifts under the “10% minimum deduction test” and the “5% probability test” (for charitable remainder annuity trusts). A series of calculations performed in the Crescendo Software using the October 2.0% AFR revealed the following results.

Charitable Remainder Trusts

One-life charitable remainder unitrusts calculated using the 2.0% AFR no longer qualify for persons age 26 and under. Two-life unitrusts with quarterly payments fail for two persons both age 38 and under and trusts with annual payments fail when both persons are age 37 and under. Most charitable remainder unitrusts are established for seniors (age 65+) or business owners (ages 45-55) in the case of retirement unitrusts. So, the trusts that will likely fail are those created to provide income to children and grandchildren.

As for charitable remainder annuity trusts calculated using the 2.0% AFR, one-life annuity trusts for persons age 71 and under fail. Two-life annuity trusts fail for two persons both age 73 and under. Likewise, an annuity trust for two persons age 74 and 73 fails. Both individuals must be 74 or older for a two-life annuity trust to qualify with the low October AFR.

Charitable Gift Annuities

Using the current American Council on Gift Annuities (ACGA) rate schedule and the 2.0% AFR, a one-life immediate charitable gift annuity fails for persons age 58 or younger. The two-life immediate charitable gift annuity fails for two persons both age 65 or younger. Deferred gift annuities (calculated using the current 4.50% rate of deferral) will qualify with sufficient deferral periods. According to the 2009 ACGA survey, the average age reported for the youngest annuitant of an immediate annuity was 69. The charities that will have problems are those who issue immediate annuities to younger donors.

Charitable Lead Trusts

The good news is that lower AFRs are more favorable for Lead Trusts. Lead Trusts are not subject to the 10% minimum deduction rule. A lower AFR means that individuals can pass on greater value to family at a lower tax cost. The combination of the low AFR and capital gains tax rates likely rising in 2011 will make lead trusts attractive to high net worth individuals who wish to gift their appreciated property to family.

Conclusion

Keep in mind that when calculating the tax deduction for a charitable gift, the IRS permits use of the AFR for the current month or one of the two prior months. So, for CRTs and CGAs established during the month of October, you can use the higher August 2.6% rate to produce the largest charitable tax deduction. However, for seniors who create charitable gift annuities and do not itemize, the lower October 2.0% AFR may be more desirable because it will produce the highest tax-free payout.

If you have questions about the impact of lower AFRs on your planned gifts donor illustrations, please give Crescendo a call at 1-800-858-9154 and ask to speak to one of our attorneys.

The Secret to Repeat Gift Annuities

2010-09-16T06:35:00.000-07:00

As I shared in a prior post, there is much in the way of anecdotal evidence (and even some hard data) on the incidence of donors with multiple charitable gift annuities (CGAs). Repeat annuities make sense when you consider that a charity builds on and solidifies the donor relationship with each gift annuity payment. It is natural for the donor to take out another annuity contract because the donor likes the fixed income and wants to continue to support a charity’s mission during their lifetime.

I spoke recently with Doug McDaniel, Director of Special Gifts for the Salvation Army Eastern Territory, about the number of Salvation Army donors with multiple gift annuities. Doug gave me some insight into how his territory and other Salvation Army territories have encourage donors to repeat their gift annuity contracts.

• Annual Reports/Applications - The Eastern Territory sends out an annual report each year to its donors. The Army includes a gift annuity application and current rate chart for donors who may want to consider another annuity contract.

• Birthday Cards - Some divisions send existing annuitants a card six months before their next birthday letting them know that if they take out another annuity, they are potentially eligible for a higher annuity rate. (Doug says that this strategy has worked better as rates have gone up as opposed to the reverse).

• Special Appeal - One division sends a special appeal to every annuitant each November suggesting that they take out an additional annuity contract.

• Donor Stewardship – The Salvation Army works hard to steward charitable gift annuity donors. Staff members regularly meet with donors who are interested in a personal update of the Army’s work and are receptive to a visit.

• Print Newsletters – Divisions attempt to include all CGA donors on their print newsletter distribution lists. Print newsletters, which market further gift opportunities, go out several times each year.

• Personal Letter – Some organizations send personalized letters to existing gift annuitants that lay out how a new CGA would work for the donor based on their age and often include a basic gift calculation with an explanation.

• Special Events – CGA donors receive invitations to special events. Often these social events will lead to one-on-one appointments where donors will look at new gift options.

• eMarketing - In the future, Doug plans to use more electronic outreach to communicate to annuitants and market further gifts. Because the Eastern Territory has over 2,000 gift annuitants, with the majority on the web, Doug thinks it makes sense to cultivate further relationship through electronic means.

For more ways to increase your reach to donors and multiply your annuity contracts, please give Crescendo a call at 1-800-858-9154 and ask to speak to one of our marketing specialists or visit our web site at www.crescendointeractive.com.

Crafting Effective Gift Acceptance Policies

2010-09-09T09:39:00.000-07:00

On my recent trip to the Midwest, I met Jean Devine of the University of Southern Indiana (USI) Foundation. We discussed how to craft gift acceptance policies for a fairly young charity. Although USI accepts gifts based on past practices, the organization currently has no written gift acceptance document.

As a springboard for our discussion on what an effective gift acceptance policy for USI should entail, I asked Jean about the types of gifts USI already accepts. Here are some of the issues we discussed:

1. Charitable gift annuities (CGAs) – USI has issued a number of CGAs, but never for less than $25,000. There is currently no policy on age limits. I shared with Jean that most organizations have a $10,000 gift minimum for CGAs, although some charities raised their minimums after 2008 for risk management. According to the latest ACGA study, the majority of charities accept current CGAs for donors age 60 or older. The average age for a deferred CGA at the time of the gift is 64.

2. Charitable remainder trusts (CRTs) – USI has a few charitable remainder unitrusts and one annuity trust. The organization has no CRT threshold limits. Most organizations set a $100,000 minimum for CRTs due to the time and cost of administration involved. USI’s one annuity trust beneficiary is in his late 60s. I shared that many organizations have a policy of restricting annuity trusts to donors age 75 or 80+ and some only offer term of years trusts because of the potential for depletion.

3. Real Estate Gift Acceptance – USI has accepted real estate both as outright gifts and for life income gifts. Jean explained that USI accepted one property for a CGA only because it was known to be in an attractive area of town. Ability to easily sell may be the exception to some organization’s general policies against real estate CGAs. The need for environmental inspections when accepting property with potential hazards must also be addressed in a gift acceptance policy.

4. Donor Recognition – Donors who acknowledge that they have included USI in their will are invited to join USI’s Reflection Program and attend an annual luncheon. A gift acceptance policy should detail criterion for gift recognition (such as documentation of bequests) and thresholds for participation in a giving or legacy society. As a practice, USI has chosen to honor all donors who acknowledge bequest gifts regardless of the size, details or documentation provided.

These are just a few of the issues that need to be addressed in creating an effective charity gift acceptance policy. Please e-mail crescendo@cresmail.com to review a sample gift acceptance policy and for recommendations on attorneys who can draft a policy to meet the specific goals of your organization.

Social Networking for Planned Gifts

2010-09-01T16:14:00.000-07:00

I have received a number of questions regarding social networking and planned giving. “How can social networking work for planned gifts? Will it take up too much of my time? What is the actual dollar return (ROI) if our charity makes this investment?” In this post, I will attempt to answer your questions and also give you reasons to at least try social networking for your charity.

It is true that social networking will not directly result in planned gifts, since you cannot simply make a planned gift online like an online cash gift. Charitable trusts, gift annuities and charitable bequests require planning and legal documentation that typically involves in-person meetings with advisors and charity staff. Nevertheless, social networking can help your charity build ongoing relationships with your donors and strong relationships form the basis for planned gifts.

We know that the vast majority of your prospects (even seniors) have ventured into the world of social networking. Some are “fans” or “friends” on Facebook, others “follow” on Twitter and many have their own blogs and use other platforms to stay in touch with colleagues, family and friends. If you have a social networking presence, your supporters can begin receiving regular updates from you each time they check their accounts or message boxes.

The ability to update fans, friends and followers 24/7 can help your donors gain a better understanding of your work and your charitable mission. Social networking will educate and keep your supporters informed in a way that enables them to identify with your work. By using social networking, you will build an ongoing relationship with supporters forming the basis for future gifts.

Twitter and Facebook

Twitter (http://www.twitter.com/) and Facebook (http://www.facebook.com/) are fairly easy to setup and many charities are now using these platforms to stay in touch with supporters. In most cases, you (or your IT person) can customize your pages with your charity’s logo, branding and message in a few hours. If you already have pictures or articles written about charity events or accomplishments, these might be great to link to or post right away.

Here are some ideas for using Twitter and Facebook to engage your donors who may be interested in planned gifts:

-Regularly update supporters on happenings at your organization, events and success stories with links (shortened using http://www.tinyurl.com/) back to your web site.
-Engage donors with a link to your project or accomplishment of the week. This helps familiarize donors with your work and goals.
-Periodically drop links to stories of other supporters who have furthered your mission by establishing planned gifts.
-Link to online sign-ups for planned giving donor events, wills seminars and legacy society gatherings. Include links to pictures following these events.
-Advertise charitable gift annuities by linking to your online gift annuity illustration calculator which permits donors to view rates.
-Link to interactive wills planning information and offers for free wills guides to encourage wills and bequest planning. (This appeals to all donors!)

Blogging

Many charity staff also have created personalized blogs where they share stories about their mission being accomplished and the people who make this possible. Consider asking your president or marketing staff to write a regular update in the form of a blog post. Platforms such as http://www.blogger.com/ make it easy to create your own custom blog. Remember that your blog is your own expression and there are many ways that you can present your charity’s message to appeal to readers. Link your blog posts to your Twitter and Facebook accounts so that you can reach a greater number of supporters through social networking.

Try Social Networking!

While it may be difficult to assess the actual planned gifts ROI, the fact is that if you are engaging in social networking you are networking with your supporters where they are today – online. People often tell me that they have avoided social networking because it takes up too much of their time. I disagree. Once you have your basic accounts in place, you can update your followers and fans in just five minutes a day. It’s that simple. So, if you haven’t yet ventured into the world of social networking, think about trying it at your charity for three to six months. You might just be surprised at the connections you make with people who support your cause and are willing to invest in your charity’s future.

To learn more about how to market planned gifts and take advantage of new social networking opportunities please call Crescendo at 1-800-858-9154 and ask to speak to one of our marketing specialists.

Impact of Low September AFR on Gift Qualification

2010-08-25T10:59:00.000-07:00

I have received a number of calls this past week concerning the new lower Section 7520 Rate (AFR) for the month of September. The 2.4% September AFR is the lowest rate we’ve seen in the past year and raises concern that some charitable gifts for younger ages may no longer qualify under the “10% minimum deduction test.”

In order for a charitable remainder trust or charitable gift annuity to qualify for IRS purposes, the charitable deduction must be at least equal to 10% of the original gift value. Here is what I discovered about gift qualification after performing a series of calculations in the Crescendo Software using the September 2.4% AFR.

Charitable Remainder Trusts

One-life charitable remainder unitrusts calculated using the 2.4% AFR no longer qualify for persons age 26 and under. Two-life unitrusts fail the 10% test for two persons both age 38 and under. If one person is just one year older than age 38, a unitrust will qualify. Most charitable remainder unitrusts are established for seniors (age 65+) or business owners (ages 45-55) in the case of retirement unitrusts. So, the trusts that will likely fail are those established to provide income to children and grandchildren.

As for charitable remainder annuity trusts calculated using the 2.4% AFR, one-life annuity trusts for persons age 69 and under fail the 10% test. Two-life annuity trusts fail for two persons both age 71 and under. Likewise, an annuity trust for two persons age 71 and 72 fails. Both individuals must be 72 or older for a two-life annuity trust to qualify with the low September AFR.

Charitable Gift Annuities

Using the current American Council on Gift Annuities (ACGA) rate schedule and the 2.4% AFR, a one-life immediate charitable gift annuity fails for persons age 55 or younger. The two-life immediate charitable gift annuity fails for two persons both age 64. Again, if one person is one year older than age 64, the gift annuity qualifies. Deferred gift annuities (calculated using the current 4.50% rate of deferral) should still qualify with sufficient deferral periods.

According to the 2009 ACGA survey, the average age reported for the youngest annuitant of an immediate annuity was 69. The charities that will have problems are those who issue immediate annuities to younger donors, although this is not the norm. In the ACGA survey, only 17 out of 568 charities reported issuing immediate annuities to annuitants age 49 or younger.

Charitable Lead Trusts

The good news is that lower AFRs are more favorable for Lead Trusts. Lead Trusts are not subject to the 10% minimum deduction rule. A lower AFR means that individuals can pass on greater value to family at a lower tax cost. The combination of the low AFR and capital gains tax rates likely rising in 2011 will make lead trusts attractive to high net worth individuals who wish to gift their appreciated property to family.

Conclusion

Keep in mind that when calculating the tax deduction for a charitable gift, the IRS permits use of the AFR for the current month or one of the two prior months. So, for CRTs and CGAs established during the month of September, you can use the higher July 2.8% rate to produce the largest charitable tax deduction. However, for seniors who create charitable gift annuities and do not itemize, the lower September 2.4% AFR may be more desirable because it will produce the highest tax-free payout.

If you have questions about the impact of lower AFRs on your planned gifts donor illustrations, please give Crescendo a call at 1-800-858-9154 and ask to speak to one of our attorneys.

Keys to Building a Successful Legacy Society

2010-08-18T10:04:00.000-07:00

I recently met James Allan, Director of Major Gifts for the Art Institute of Chicago, when he attended a Crescendo seminar. James shared with me his efforts to build relationships with donors through the Institute’s long-standing New Century Club and newly launched Legacy Society.

Here are some of the helpful tips James shared about building a successful legacy society:

1. Create a legacy group for everyone

The Art Institute’s original legacy group was created for donors who identify the Institute as a beneficiary of their estate with a $25,000 minimum gift. James said that the high gift threshold intimidated some well-intentioned donors from acknowledging smaller, although still sizable, gifts. So, this year, the Institute launched a Legacy Society to recognize donors who set up planned gifts at all levels. The Institute is hopeful that this more inclusive group will lead to a greater number of donor-identified bequests.

2. Get out the word about society membership

James said that Legacy Society membership is featured in ads that appear in every other issue of the Art Institute Member Magazine. The ads emphasize the impact of a bequest on the Institute and ask individuals to contact James for membership information. Supporters also learn about Legacy Society membership when they attend the museums programs and events where Society membership is explained by volunteers and staff.

3. Invite members to see your mission in action

Historically, the Institute has held three major donor events each year. Most offer behind-the-scenes access to a curator and part of a collection. While one-on-one donor visits take place, more often, James says that he invites members to come and visit the museum to learn about the collection and what their gift will accomplish.

4. Use eMarketing to grow your membership

James said that the Institute is in the early phase of using online methods to attract members. While the Legacy Society is not directly advertised on the Institute’s planned giving web site, he receives calls from individuals who have reviewed online bequest information. James said that since so many of the Institute’s supporters correspond by e-mail, he plans to send eNewsletters in the future to cultivate new members.

If you don’t already have a legacy group, consider starting one. Include a form on your web site that makes it easy for donors to join by acknowledging bequest commitments. To learn more about ways to create and market legacy giving with your donors, please give Crescendo a call or visit our web site at www.CrescendoInteractive.com.

Suggestion to Add to DAF Do's and Don'ts

2010-08-16T15:08:00.000-07:00

This suggestion came from one of my readers and is a welcome addition to last week's post on donor advised funds (DAFs).

Kristen, one suggestion to add to your DAF do's and don'ts. In addition to the comment regarding distribution not satisfying personal obligations, you might consider mentioning that such distributions also cannot result in either the individual or the DAF receiving a tangible benefit. Far too often do I see individuals attempt to use a DAF for their annual giving society membership - that gets them a free admission to a very swanky event. No-can-do! Can't even try to get around it with a bifurcated payment, either!

John Taylor
Associate Vice Chancellor, Advancement Services
North Carolina State University

Guidelines for Offering Donor Advised Funds

2010-08-11T09:51:00.000-07:00

The 2010 Fidelity Charitable Gift Fund survey revealed that advisers anticipate nearly twice as many Donor Advised Funds (DAFs) will be established in the next five years when compared with private foundations. DAFs are growing exponentially in the U.S according to recent reports in the Chronicle of Philanthropy. DAFs are attractive because they permit donors to make a tax deductible gift today and then decide on specific charitable beneficiaries in the future.

Just this week I received a call from a gift planner who sees the growing popularity of DAFs and wants to begin offering this option to donors. In our phone call, I recommended that the charity begin by creating guidelines for DAFs. Here is a road map of issues that should be addressed in your gift acceptance policy if you are already offering DAFs or plan to do so in the future.

DAF Creation

-Determine the minimum amount required for DAF creation ($10,000 is common).
-Establish that all funds gifted to DAFs are the exclusive property of the charity for purposes of making distributions.

Advisory Rights

-Require that donors advise the charity on distributions in writing and detail what this writing should entail.
-Grant donors the power to designate successors with advisory rights. Designate a term of years for successors to exercise their advisory rights after the donor’s death.
-State the outcome if the charity does not receive fund advisement within a given period of time. (For example, if the charity receives no direction from the donor or successors within a three year period the fund will be terminated.)

Fund Distributions

-Grant the charity the right to make distributions of principal and income from the fund.
-Establish the frequency for donor recommendations (at least annually is standard).
-Establish a threshold for recommendations. (For example, the minimum recommendation amount for distribution is $1,000.)
-State distribution limitations. (No distributions may be made to fulfill a legally binding pledge made by the donors, distributions must be made to qualified Section 501(c)(3) charities and may include fields of interest, etc.)

Administration

-Grant charity the ability to accept contributions and administer funds in accordance with resolutions made by the charity’s board of directors.
-State that while the DAF is a component fund of the charity, the assets may be commingled and invested in any common investment fund of the charity.
-Acknowledge that each fund may be assessed charges and fees similar to those applicable for other funds managed by the charity.

DAF Remainder

-Note that the DAF is intended to be operational during the lives of the donors and successor advisors for the permitted term of years.
-After the death of the donors or the expiration of the term, the fund will become the exclusive and unrestricted asset of the charity.
-It is common to grant donors and successors the right to make recommendations for distribution of principal from the fund upon termination.

If you are offering or considering offering DAFs, review your existing gift acceptance policy to see how it might be revised to address these issues. For more information on DAF policies and procedures please call Crescendo at 1-800-858-9154 and ask to speak with on of our attorneys.

Inspiring Your Donors to Create a Legacy

2010-08-04T08:59:00.000-07:00

On my most recent trip, I read Inspired Philanthropy, a book by Tracy Gary on creating a giving plan and leaving a legacy. With the intergenerational wealth transfer underway, there has been a renewed emphasis on values-based planning as families come into inherited wealth and want to pass on more than just money to their heirs.

If you are a gift planner or fundraiser for a charity, you have a unique opportunity to talk with individuals in all walks of life about creating a lasting legacy. This legacy is often more than just a gift of money or property -- It is achievement of a donor’s passions and often lifetime goal to make a difference in his or her community and even around the world.

While Tracy's book is geared more towards donors, her ideas made me think of several ways charities can provide the inspiration donors need to make a lasting gift.

1. Be Mission Driven – The most successful charities focus on mission. If it’s true that inspired donors arrive at giving by evaluating their values and deep-set desires, charities must articulate their mission in a way that inspires donors to give. Whether it’s in a one-on-one donor meeting, update or progress letter, charities must talk about what donors’ gifts will actually accomplish (how their mission is fulfilled) and relate this to achievement of donors’ goals.

2. Be Involved in Planning – Charities can play an important role as mentors or philanthropic advisors for immediate and lifetime giving from donors. Charities are increasingly involved in the wills planning process. Wills guides and online wills resources provide many charities with effective tools to assist donors in creating their legacies. As donors look to charities for assistance when making charitable bequests and for attorney referrals to complete their plans, charities can inspire donors to leave gifts that have a lasting impact.

3. Be Online – Many donors who are trying to match their goals and values with areas of interest learn about your charitable cause through online research. This is why it is so important for you to have a planned giving web site. If you don’t have an online presence, how do you expect donors to know about your work and become inspired? Photos of your organization’s accomplishments and donor stories can inspire donors to give. Online illustrations that explain the benefits of giving will enable donors to make informed decisions about how to give.

The Internet makes donors more strategic about their giving than ever before. As donors seek to find purpose for their passions, charities must become more effective in using online techniques to express their mission and assist donors in the planning process.

The goal of Crescendo’s GiftLegacy service is to help you reach, educate and inspire your donors online. For more information about GiftLegacy or to request your free trial, please call Crescendo at 1-800-858-9154 or visit our web site at www.Crescendointeractive.com.

The Most Improved Planned Giving Program

2010-07-28T09:29:00.000-07:00

I spoke with Shirley Druggan this week from the University of Texas Health Science Center (UT Health) located in Houston. Ten years ago, UT Health began a planned giving program, but the program lasted for only one year before it was shut down. From 2001-2007, UT Health received only nine planned gifts. The University of Texas System conducted a survey in 2007 and found that when compared with benchmark institution, the UT System was way below the norm for planned gifts agreements.

UT Health was one of several institutions awarded a grant by the UT system to start a planned giving program. When Shirley began UT Health’s planned giving program two years ago she had no marketing materials and a very limited donor database. The organization’s donor data was old and Shirley reviewed extensive files and made contact with supporters to identify and build a prospect list for planned gifts cultivation.

Shirley found that very few of the individuals she interacted with understood the area of planned giving. So, much of her initial work involved educating volunteers, staff and supporters about planned giving options and the benefits of making a gift. Already this year, Shirley has held three training sessions to educate staff on what to look for when prospecting for planned gifts. Shirley also formed a seven-person professional advisory council which has helped her network and build relationships with advisors.

Shirley realized that she couldn’t do planned gifts marketing on her own. So, she contacted Crescendo and asked us to set up an interactive web site for UT Health. Shirley quickly recognized that sending out the eNewsletter was one of the best ways to increase online traffic. (The newsletter includes links to full articles on UT Health’s planned giving web pages.) Shirley began by sending monthly e-mails, and then increased to bi-weekly and finally weekly e-mail contact. Although she was skeptical about contacting donors weekly, following the first month of weekly eNewsletter distribution, she immediately saw UT Health’s web page views increase.

Shirley says that UT Health’s page views have increased significantly since last October when she began customizing the eNewsletter with current news about UT Health’s work and special events. She now sends the weekly GiftLaw eNewsletter to 545 professionals and the GiftLegacy eNewsletter to almost 4,000 donors each week. Shirley just attended the GiftLegacy eMarketing seminar in Washington, D.C. and she immediately implemented some new marketing ideas that she says are already producing results.

Shirley finds reviewing the statistics Crescendo provides very helpful in assessing the effectiveness of her eMarketing program and use of the eNewsletter. In May of 2009, UT Health’s web page had 383 page views. After customizing her e-mails and growing her e-mail distribution list, Shirley saw her page views skyrocket. By May of 2010 UT Health’s page views had risen to 4,852, which is a 4,469 gain in page views in one year! Shirley says that in the last year and a half 50-60 donors have responded either to the web site or eNewsletter (usually by e-mail). Shirley attributes the growing responses to increased contact made through the weekly eNewsletters.

While Shirley also sends a hard copy newsletter twice each year to approximately 12,000 donors, she has noticed that she doesn’t receive nearly the responses that she sees coming from the eNewsletter. One thing she has noted is that donors who read the print newsletter will often visit the web site and e-mail her for further information. So, in this respect, Shirley says that her print and web marketing strategies are working together. UT Health’s success has not gone unnoticed – they just won the 2010 CASE award for Most Improved Planned Giving Program.

Congratulations to Shirley for her planned success story, which is an inspiration to any charity launching a new planned giving program or seeking to grow an existing program.

For more information on how to start a planned giving program or multiply your planned gifts using online marketing tools, please call Crescendo at 1-800-858-9154 or visit our web site at www.crescendointeractive.com.

Have You Studied Your Best Bequest Prospects?

2010-07-22T09:38:00.000-07:00

I recently spoke to a charity on the subject of analyzing bequest givers. This charity spent the last year reviewing its database to look for patterns and similarities among its planned giving donors. By examining the characteristics of individuals who have made gifts in the past, the charity created a target demographic of its best planned gift prospects.

I thought it might be interesting to write a post on how to analyze the best bequest prospects for your charity. After reading the questions below, you might consider reviewing your own planned giving database to uncover patterns and similarities. The goal is to create a target demographic or the profile of your perfect planned giving prospect.

Here are some questions to consider:

Geographical Information

What region of the country/city has the largest number of planned giving donors to your organization? What region/city has the second largest?
What region/city has the highest average gift amount? What is the second highest?

Biographical Information

What percentage of your planned giving donor pool is female versus male?
What is the average size planned gift for a female donor versus a male donor?
What is the average age of your bequest donors at the time they make their bequest known? What is the average age at which the bequest is made (if such data can be obtained)? What about the ages of life income donors?
What % of your donors are single? Married? With children?

Involvement in the Organization

What % of planned giving donors have served/currently serve on your board or a committee?
What % of planned giving donors have volunteered at an organization event?
What % of donors have attended an organizational event in last 10 years?
What % of donors were members of a giving/legacy society during their lifetimes?

Prior Giving History

What is the average size for outright gifts made by planned giving donors?
What is the total average household giving for planned giving donors?
What are the average consecutive years of giving for a planned giving donor?

Once you know your ideal donor profile, you can overlay the unique attributes that compose this profile over your existing database. This process should be illuminating, giving you new insight into who to market planned gifts to in the future.

For more ideas on prospecting and marketing for bequests, call Crescendo at 1-800-858-9154 or log on to our website at http://www.crescendointeractive.com/.

Oil and Gas Interests for Charity - How to Make These Gifts Work

2010-07-14T09:25:00.001-07:00

I received a call last week from a gift planner who has donors with oil and gas interests who wish to make a gift to charity. Since there is very little written on this topic I thought it might be a good subject to tackle on my blog.

What types of gifts are permissible? The varying degrees of ownership make this area complex. Some donors own land with oil or gas deposits while others own only the mineral rights. Both types of owners may lease their mineral interests to an energy company that will extract the minerals in exchange for royalty payments.

Here is a short summary of ownership types and the gift planning options available:

1. Donor owns land with oil or gas under the surface

If the donor owns the land and the minerals, to avoid the partial interest rule the donor must transfer an undivided interest (both the land and the minerals) to charity. The donor needs a qualified appraisal and must file Form 8283 to claim a deduction. The gift may be made outright or to fund a life income arrangement, such as a charitable remainder trust (CRT) and charitable gift annuity (CGA) gifts. See the note below on how to handle those gifts.

2. Donor owns only the oil or gas interests

If the donor only owns the mineral interest, the donor can gift the minerals alone to charity or to a charitable trust. Because the donor is gifting his or her entire ownership interest, there is no partial interest rule problem. A qualified appraisal is required for property gifts in excess of $5,000 and there may be additional issues for life income gifts.

3. Donor has signed a lease of land or mineral interests for royalties

Even if the donor has leased the mineral interests, he or she may assign the royalty stream to charity or fund a CRT. There is no issue of income avoidance under Lucas v. Earl because a royalty is not earned income. Since the royalty payment is assigned, the donor avoids income tax on the royalty payment. While there are no specific cases on point, under the “fruit of the tree” analysis a gift of an ordinary income stream of dividend payments does not produce a charitable deduction.

CRT or CGA Transfer

If the leased interest is transferred to fund a life income plan, it is important to assess whether the royalty payment is sufficient to sustain the desired payout (assuming the interest is retained). Generally a NIMCRUT or FLIP payout works best here because the future income stream may be uncertain. Since minerals are a depleting asset, a CGA, which requires a fixed payment, is often a more difficult obligation for the charity to meet.

Note that because royalties are considered passive income, the income is generally not subject to unrelated business income tax (UBIT). In a series of rulings, the IRS has held that the income is not subject to UBIT as long as the royalty interest is not a “working interest” controlled by the charity (i.e. the charity is liable for operational expenses associated with developing the minerals).

The donor could of course receive the royalty payment, pay the taxes that are due and then make a deductible gift of some or all of the cash to charity. A third option is for the donor to transfer the lease to charity or a CRT. Again with this option there is no income to the donor, but the gift is also not deductible for federal income tax purposes. The CRT should be established again with a NIMCRUT or FLIP payout if the interest is held in the trust.

If you have donors who are interested in making gifts of land with oil and gas interests, consider reviewing and updating your gift acceptance policies. Ideally, you should establish minimum gift values you are willing to accept. With real estate where there is the potential for hazards, always make sure to conduct an environmental inspection.

For more information on gifts of these and other unusual properties, please give Crescendo a call at 1-800-858-9154 and ask to speak with one of our attorneys.

How to Solve Real Estate Gift Dilemmas

2010-07-08T10:49:00.000-07:00

If you’ve accepted a gift of real estate, you know that there are certain issues that must be discussed and pitfalls to avoid. I recently spoke with Chris Paul Nelson, Director of Gift Planning for the Idaho Youth Ranch. Chris shared with me his latest real estate dilemma – a proposed gift of a manufactured home.

Here are some of the questions that came up in our discussion -- Is the home on wheels or on a foundation? Has there been a qualified appraisal? Is there debt on the property? Is the property saleable? What if the charity decided to use the manufactured home as a facility? How should the home be transferred to charity?

This scenario raises some of the issues a charity should address in accepting any gift of real estate. I find this checklist useful when dealing with real estate gift acceptance questions:

Title- Does the owner have clear title? Are there any title defects? A proper title search should be conducted before accepting a gift of real estate.

Environmental Waste- Is there apparent waste on the property or has it been used for commercial purposes? An Environmental Impact Survey (EIS) should be completed on farms and industrial sites prone to environmental hazards.

Taxes- Do any tax liens exists against the property? Again, do a title search.

Mortgages/Debt Instruments- Is there any debt on the property? A review of current mortgages and debt instruments ensures that the property is not currently in foreclosure or subject to seizure or a forced sale. It also makes a difference in selecting the gift option.

Inspection- Has the property been inspected? An inspection assists the appraiser in his or her duties and notifies the charity of any defects or hazards.

Qualified Appraisal- Has the property been properly appraised? A qualified real estate appraiser should be hired to give an accurate and verifiable appraisal.

Recordation- The charity should immediately record its interest in the deed upon delivery. While recordation is not required in all states, doing so perfects title.

Maintenance, Insurance and Taxes- Donors making a gift of a remainder interest in property should sign an agreement obligating them to maintain the property, carry an insurance policy on the property and pay all the applicable property taxes. This helps assure the remainder interest holder that waste will not be committed on the property during the donor's lifetime.

Market Study- Can the charity easily resell the property? Knowledge of the marketability of a property will assist the donee organization in determining how long it may take to sell a property upon receiving full title.

Cost-Benefit Analysis- What are the benefits and the costs associated with the charity owning the property? Property in need of repair or modification may not be worth accepting.

Going through a checklist like this one should help raise questions to ask before accepting any gift of real estate. I was surprised to learn that one large university had turned down over 50 property gifts in recent years due to some of the issues raised above. Not every gift is worth accepting. So, do your homework ahead of time and determine whether the real estate gift you are offered will really benefit your charity.

For more help on solving your real estate gift dilemmas, please contact Crescendo at 1-800-858-9154 or send us an e-mail at Crescendo@cresmail.com.

A Lesson in Donor Relations: An Unexpected Gift from an Unsuspecting Donor

2010-06-30T09:58:00.000-07:00

I met with numerous charities last week while teaching a series of Crescendo trainings in Washington, D.C. Monica Estabrooke, a gift planner for AARP told me the most amazing story about a donor who she only spoke with twice during his lifetime. Frank first called Monica (when he was then age 91) in response to an AARP charitable gift annuity advertisement. While the donor explained that he did not have a large estate, he was interested in information about creating a will. Monica talked with him at length and later called back to refer him to an attorney.

One year later, Monica received a call from the administrator of Frank's estate who said that Frank had passed away leaving everything to the AARP Foundation. The administrator explained that Frank’s estate was small – just the trailer he was living in and the land under the trailer (located near Palm Springs, California). Initially, AARP staff members were not certain that the organization should accept this property. Ultimately, it was decided that AARP owed it to the donor to at least liquidate his assets and sell the trailer, which was valued at around $50,000.

AARP hired someone to clean-out the trailer in preparation for sale. While most of the items found inside were in Monica’s words “junk,” the cleaners made an amazing discovery. Under a rug, a removable floorboard was discovered and there the cleaners found $167,000 in cash. So, while Frank thought his estate was worth little, AARP ended up with far more than the $50,000 property value. They ended up with the proceeds from the sale of the trailer plus the cash!

Although Monica only spoke twice with Frank during his lifetime, Monica and AARP felt that they built a relationship during this short time – a relationship that ultimately led to an estate gift. Monica remembers how appreciative Frank was when she answered his questions and referred him to an attorney to help prepare his will. Also, Monica and some of the other staff members enjoyed learning more about Frank through reading the poetry he wrote and left behind in the trailer.

Sometimes gifts come in unexpected places. Donors who you may think have little or nothing in the way of assets, could give more to charity than ever expected. I tell you this story because I sometimes think perceived “small” donors fall through the cracks in organizational fundraising. This story shows the importance of donor relations and helping any potential donor with whom you may come in contact. Practice good donor relations and you might just receive that unexpected gift from an unsuspecting donor!

For more information on building successful relationships with your donors please call Crescendo at 1-800-858-9154 or visit our web site at http://www.crescendointeractive.com/.

Are There Any IRA Rollover Success Stories? Definitely!

2010-06-22T14:09:00.000-07:00

I spoke this week with Alan Gross, Director of the Jewish Community Federation of Cleveland. When I was teaching a wills seminar in Cleveland last month, I learned about the Federation’s successful four-year campaign to cultivate IRA rollover gifts. Here are some of the raw statistics Alan shared with me:

2006 – From the time the legislation was passed in August until December the Federation marketed the rollover. That year they received 97 IRA distributions totaling $1.5 million.

2007 – IRA rollover marketing over one full year produced 321 distributions totaling $3.3 million.

2008 – Distributions fell slightly with the economic downturn. However, the Federation still received 139 distributions totaling about $1 million for the year.

2009 – Even with the required minimum distribution (RMD) holiday this year, the Federation still received 78 distributions totaling $1.14 million.

Over a four year period, the Federation’s IRA rollover gifts totaled more than $6 million! How did they do it? Alan said that the Federation saw the IRA rollover legislation as a unique opportunity. However, they recognized up front that even with a successful donor marketing campaign, distributions may not flow smoothly from custodians. So, after the legislation passed, the Federation immediately went to custodians to inform them of the legislation and find out the best way to facilitate transfers.

The Federation also placed considerable emphasis on educating advisors to encourage these distributions. The Federation knew that brokers typically get in touch with clients at the end of year to make sure RMD distributions are taken. So, they informed brokers to encourage these distributions to charity when individuals wanted to lower their income or taxes. The advisors appreciated the Federation’s involvement since this idea added value to their relationships with customers. The result is that the advisor’s clients and Federation’s donors formed the habit of making these distributions, even in 2009 when there was not the same incentive to make an IRA rollover gift.

In terms of actual marketing media, the Federation used Crescendo’s weekly GiftLaw eNewsletter to remind advisors to discuss the IRA rollover opportunity with their clients. Most of the advisor promotion was accomplished at the end of the year, since many people are deciding then to make distributions. In addition, the Federation provided donors with all the tools they needed to make the transfer happen, including letters they could send to their custodians and also a copy of the IRS determination letter that demonstrated the Foundation’s qualification to be a recipient. Alan said that they wanted to make IRA rollover giving as easy as possible without pushback from their donors’ advisors.

When donors made distributions, the Federation created a record and then targeted future mailings and made phone calls to these donors to remind them of the IRA rollover opportunity each year the legislation was reauthorized. Alan says that the Federation’s IRA rollover campaigns have not only added current gift value, but also provided the Federation with valuable information about hundreds of prospects with IRAs. This information gives the Federation the ability to market testamentary IRA gifts such as bequests and testamentary CRTs to receptive prequalified donors.

The passage of the tax extenders legislation that includes the IRA rollover retroactive to January 1, 2010 is still pending in the Senate. Give Crescendo a call at 1-800-858-9154 to learn more about IRA marketing with GiftLegacy and request your free trial

Helping Your Donors Select an Attorney

2010-06-16T09:47:00.000-07:00

“How can I help my donors select a qualified attorney?” a planned giving officer asked me this week. Since I am receiving this question with some frequency, I thought it would be a good topic for a blog post. Donors who have turned to bequest giving (as a way to support their favorite charities at a time when cash may be tight) often need direction in selecting an estate planning attorney.

Selecting an attorney with charitable receptivity is important since many estate planning attorneys may be asked to include a charitable bequest in the plan. It is also beneficial if the attorney has background in drafting charitable documents and providing counsel on charitable gifts.

In contemplating a gift, a donor (without an attorney) will often ask a charity to refer qualified legal counsel. As a charity, you should already be building relationships with attorneys in your area that can provide assistance to your donors. Here are some issues to consider when making attorney referrals:

1. Personal experience – Donors you know and have worked with in the past always make the best referrals. Here are some questions to ask: Have other donors to your charity used this attorney for their charitable planning? How did the arrangement work? If the donor is deceased, did the charitable gift flowing from the estate match the donor’s intentions as detailed in the estate plan?

2. Years of expertise – For every attorney referral, you want to find out how long the individual has been practicing in their area of expertise. One estate planning web site recommends that individuals look for an attorney with at least five years of estate planning experience. Other questions to ask: What is the length and breadth of their charitable planning experience? Have they drafted bequests? How many charitable trust plans have they advised on/completed?

3. Size of firm – Although there are several large firms with charitable service divisions, many of the individuals with charitable estate planning expertise work as one-person law firms or as the estate planner within a larger firm. A large firm has the infrastructure to offer expanded services and handle complex gifts, but a sole-practitioner may offer more donor face-time at a lower cost.

4. Cost to Donors – Because donors are ultimately making a gift to charity, you want to make sure that your referrals will provide services at a reasonable cost. Ask the following questions: How much does the attorney charge for a will or trust plan? What is the hourly rate for advisement on a charitable plan? Is a retainer required?

5. Location – Many donors want to meet with an attorney in their local area. However, for donors making complicated or very large gifts, it often makes sense to connect them with one of a handful of industry legal experts located in various parts of the country. Planned giving attorneys also specialize within their practice area so give Crescendo a call if you are seeking a referral for a specific type of plan.

These are just some of the many issues for you to consider when making attorney referrals to your donors. As part of Crescendo’s GiftLegacy services, we provide the GiftAttorneys comprehensive state-by-state database of charitable estate planning attorneys. For more information, please call 1-800-858-9154 and ask for your free GiftLegacy trial.

Traps for the Unwary Charity – What You Need to Know and Avoid!

2010-06-10T08:53:00.000-07:00

I had the pleasure of speaking recently with Danika Mendrygal, a nonprofit organizations attorney with the law firm of Haynes and Boone, LLP in Dallas, Texas. Charities often engage in fundraising activities that seem very ordinary but in fact can raise tax and legal issues. Danika shared with me some of the traps she sees charities fall into again and again and compliance issues at the local, state and federal levels. Here are her top five traps for the unwary charity:

1. Federal deductibility and substantiation – The perfect example of this trap is the charity golf tournament. The donor makes a $75 contribution to play golf, but the charity fails to acknowledge the benefit received in the gift receipt. Many charities overlook the quid pro quo issue here – donors are receiving value (golf and lunch) in exchange for their contribution. Be sure to notify your donors that they can only deduct the difference between the amount paid and quid pro quo (value received).

2. State and local taxes and permit requirements – This trap often occurs when a charity provides food and beverages to a significant number of people at a carnival, barbecue or special event. This sort of activity can raise sales tax issues (although in some states charities are exempt from sales tax). A permit may also be required to engage in such activities. Check before planning an event to see if a food or alcohol license is required under state law.

3. Permissibility of gambling under state law – Poker tournaments, charitable raffles and other forms of gambling are popular fundraisers for charities. The charity needs to check to see if these activities are permissible under state law. For example, Danika says that in Texas, gambling or anything of the like is a misdemeanor. (Texas has very limited exceptions for raffles.) Check to see what your state rules are for these activities and what if anything you can do to qualify for an exemption.

4. UBIT issues – UBIT concerns often arise with corporate sponsorship of charity events. For example, if a soda company is the exclusive sponsor and only this company’s drinks are provided at the event, the sponsorship payment could constitute UBI. Another area for UBIT concern occurs when a charity links to sponsor websites, but goes beyond just including the sponsor’s name and logo to making a qualitative statement about the sponsor. Check to see that your sponsorship arrangements do not give rise to UBIT.

5. Solicitation issues – States have different requirements for solicitation of charitable funds according to state law. Several state laws penalize failure to meet state solicitation requirements. One charity recently was forced to give back a substantial amount of their donations raised in a state where they failed to register for solicitation purposes.

The bottom line is that all charities must comply with IRS, state and local requirements. With so many requirements, sometimes it becomes more difficult for smaller charities to comply. Ultimately, charities must have good legal counsel to help qualify for fundraising purposes, stay on track and remain compliant on an ongoing basis.

If you need assistance with avoiding these pitfalls please give Crescendo a call at 1-800-858-9154. We would be happy to refer you to a qualified charitable attorney who can assist you with nonprofit compliance.

How to Build Your Network of Professional Advisors

2010-06-03T09:45:00.000-07:00

I was puzzled by a survey this past year that suggested only a small percentage of planned gifts result from advisor assistance. If these results are correct, why do so many charities each year discover that they are “surprise” beneficiaries of gifts they never knew existed?

If the charity had no knowledge of the planned gift there is only one conclusion -- There must have been an advisor involved.

The overwhelming evidence, as supported by annual industry surveys, suggests that advisors are more involved in the gift planning process than ever before. One leading charitable consultant tells me that 70%-90% of gifts involve advisors! There is no debating the fact that advisors can play an important role in directing donors to your organization. So, why not build a network with these individuals who have the power to multiply your donor relationships and gifts?

I like what Doug Corbin, a charitable consultant and past PPGC speaker, has to say about building professional advisory councils. Doug has worked with a number of charities in Southern California to build councils of advisors that have paid huge dividends. One of his clients, the Motion Picture and Television Fund, has one the most influential professional advisory groups comprised of some of the top entertainment attorneys, business leaders and wealth managers in the Los Angeles area. Keep in mind it takes time to build an effective advisory council. It’s paramount that you match the right type of advisor with your organization.

Think about those people who are energetic, credible and willing to invest their time and expertise to talk with their clients and others about supporting your organization. How will you forge productive relationships with these influential professionals? Doug says that you must treat them like you would any other VIP. Invite them to special events and create opportunities for them to meet board members and senior management so that they understand and can properly represent your organization’s mission and work.

I know several organizations that include a list of professional advisors on their planned giving web site. This is a great way to build relationships with advisors and provide a valuable resource to your donors. For more information on creative ways to reach professional advisors visit http://www.giftlegacy.com/ or call Crescendo at 1-800-858-9154. To learn more about Doug’s work on building professional advisory councils, please contact him at douglas.corbin@att.net.

How to Keep Your Donors

2010-05-26T08:05:00.000-07:00

I had the opportunity to hear author and San Francisco-based charitable consultant Kay Sprinkel Grace speak to my local AFP chapter this week. Kay’s topic was how to move supporters from “fair weather friends” to lifelong loyal donors. In a climate where cash giving is down for many charities, it’s important to think about a strategy for donor retention. Here are my thoughts based on the points Kay made and how they relate to building relationships with planned giving donors.

1. Pay as much attention to small donors as you do to large ones

I can’t tell you the number of stories I hear about charities who receive large bequests from donors of perceived small means. In fact, the latest surveys show that the largest volume of bequests come from donors with annual incomes well under $100,000. Bequests become more marketable (especially from small donors) when individuals perceive they have less cash to give but still want to demonstrate support for your charity’s mission.

2. Look at consistent annual givers as planned gift prospects

Kay made the point that small donors (often regular annual givers) can be moved up the giving chain and encouraged to make major gifts. The major gift could be a bequest, but also a life income gift. A donor will move up to make a bigger commitment when a charity does a good job of building relationship and involving the donor in the life of the organization. A donor will be more likely to make a planned gift if they have an invested interest in the organization and its work.

3. Make stewardship everyone’s job

Donor stewardship should be the job of everyone in your organization from the receptionist the donor reaches when he or she first calls to the gift planner who helps establish the gift. I like seeing planned giving web sites that feature all staff members on the “Meet the Staff” page, not just the director of development or planned giving officer. Kay says to make sure that everyone a donor could come into contact with is trained to talk to donors and, when not equipped, able to pass them on to the next best person to meet their needs.

4. Planned giving is not about money, it’s about relationships

Kay says that successfully building relationships is the key to keeping your donors. One way to do this is by making regular annual contacts by e-mail, mail or in-person. Many donors view their gifts as an investment in the life of the organization. Donors need to see/be told how their gifts are being used before they take the step to make a planned gift. Make sure your gift receipts, annual reports and letters talk about the specifics of what is being accomplished (how many children fed, homes built, patients served) because of their gift.

The takeaway here is that we need to do a better job at donor relations, particularly during a time when donors may be giving less than in prior years. The donors who move on to make major and planned gifts are those who the organization has invested in and built a relationship with and who are involved in the organization. To read more on this topic, check out Kay’s new book, The AAA to Fundraising Success: Maximum Involvement, Maximum Results at http://www.kaygrace.org/

For new ways to build relationships with your planned giving donors, visit Crescendo's web site at http://www.Crescendointeractive.com or call 1-800-858-9154.

Are Principal Gifts in Your Charity's Future?

2010-05-20T14:25:00.000-07:00

I spoke this week with Steve Weldon, Director of Leadership Gifts for the University of California at Santa Cruz. Steve, a longtime planned giving director for numerous California charities, has moved to a new role with the goal of raising principal gifts for the university. I talked with Steve about the trend among charities toward cultivation of principal gifts or what he calls "leadership gifts" and the prospect of these key gifts for the future of philanthropy.

What is a principal gift? Steve says that for the university (and most educational institutions), principal gifts are any gifts of $1 million or above. They are gifts that are immediate, deferred or a combination of the two. I asked Steve how he identifies donors for these significant gifts? Steve said that the university initially reviewed its database of alumni and friends. Using predictive modeling, an analysis was made of supporters' prior gifts, activities and interests in an effort to assess their inclination toward making a principal gift.

As Steve builds a campaign for principal gifts, much of his work involves training the University's gift officers on how to be better attuned to supporters. Steve says that gift officers need to do a lot more listening in the principal gifts area. In his initial meetings with a family prospect for a principal gift Steve never discusses the university. For leadership giving, it is absolutely critical that the focus be on listening to the donor rather than on talking about the charity. Steve simply asks the family to share their story. A gift is often a natural outcome from a shared story, because in sharing their story, people realize that they want to leave a legacy by which to be remembered.

Steve made several takeaway points about principal gifts and their relationship to planned gifts:

-Professional Advisors are crucial to the process and should be directly involved.
-Families want to see metrics on what their gift has accomplished.
-Charities who want to attract the entrepreneurial donor need to offer DAFs and funds that promote donor involvement in ongoing giving decisions.
-Marketing for large gifts is more important than ever and requires a personal touch. (He likes the use of donor stories and pictures)
-International giving is going to be important to the future of principal gifts as families in other countries are heard and express the desire to leave a legacy.
-Discussion of planned gifts and estate planning often leads to a major gift as donors see that they have the opportunity to begin leaving a legacy now.
-A principal gift may lead to a planned gift like a bequest, because a donor who makes a significant gift during life desires to leave a legacy after they are gone.

The trend towards principal gifts should be of interest to anyone raising planned gifts. As Steve suggests, people fundamentally have the desire to leave a legacy both now and in the future. The interrelationship between principal gifts and planned gifts is clear -- As more charities build principal gifts programs, planned giving will continue to play an important role in the cultivation and future satisfaction of these donors making significant gifts to charity.

To learn more about raising significant gifts for your charity, please give Crescendo a call at 1-800-858-9154 or visit our website at http://www.crescendointeractive.com/.

How to Plan Your Giving Day - CA SCR 81 Passes!

2010-05-11T15:10:00.001-07:00

Yesterday was a momentous occasion for charities offering planned gifts in the State of California. Before you stop here, let me tell you that I'm writing this post not just for California charities, but to tell you a story that can help all charities. I want to share with you how a process to promote planned giving is working in the State of California and how you might consider launching a similar campaign in your own state.

I was thrilled to join a group of my charitable colleagues yesterday on the California Senate Floor to watch the Senate unanimously approve Senate Concurrent Resolution (SCR) 81 making October 1, 2010 California Plan Your Giving Day. The resolution, which began with a simple idea from Aydee Ferguson of Sutter Health Foundation, is just the beginning of a movement to promote charitable gift planning in the State of California. We drafted the resolution's language, as reprinted below, to focus on the benefits of making a planned gift. Our goal was to emphasize how planned gifts achieve donors goals, help charities further their missions and make our communities better places.

Aydee made contact with State Senator Lois Wolk who agreed to introduce the resolution supporting charitable giving. Just prior to the vote, we launched a letter writing campaign by California educational institutions to help encourage support from California's Senators and Assemblymembers. California legislators said that they understood the importance of promoting planned giving as an alternative fundraising source for charities, particularly at a time when cash giving is down. The resolution received a favorable rating by state legislative groups culminating in yesterday's unanimous Senate vote.

Those of us who have participated in this effort I think are surprised at the simple process to create and promote a planned giving day in the State of California. For those of you who are in other states, think what you might do to raise awareness for planned gifts in your state or local area. Minnesota (Give to the Max Day) has already taken the lead in launching a statewide philanthropy day raising money and awareness for charitable giving. Just think what we could do for charity if we all got involved to promote planned giving across the country!

The California resolution is now headed to the California Assembly where it is anticipated to pass. The response has been very positive as we prepare for the big planned giving day event at the State Capitol on October 1. We would like to have representation from all of the statewide planned giving groups and any charities who can come to Sacramento to promote planned giving on this day. If you are a California charity and would like to be involved, please e-mail me at kristen@cresmail.com.

SCR 81 California Plan Your Giving Day

This measure would recognize and support the importance of gift planning by declaring October 1, 2010, as California Plan Your Giving Day.

WHEREAS, Gift planning opens up options for donors, including identifying assets for donation that may otherwise be unavailable to charities; and

WHEREAS, Gift planning enables donors who are currently unable or reluctant to make a gift to establish a plan to make a gift of their assets at a later date; and

WHEREAS, Gift planning is a source of endowment that provides for the possibility of long-term funding for charitable purposes; and

WHEREAS, Gift planning is usually a result of charitable estate planning that enables donors to combine financial goals with charitable gift giving; and

WHEREAS, Gift planning through testamentary arrangements provides for estate tax savings and permits donors to leave a lasting legacy to charity; and

WHEREAS, Gift planning provides the public with the option of reallocating assets, that are otherwise subject to taxation, to social capital, thereby controlling the use and purpose of a person's charitable giving; and

WHEREAS, Gift planning proves to be gratifying for donors who designate their giving to organizations that share values similar to the donor; and

WHEREAS, Gift planning allows for the creation of charitable gift annuities, permitted by California law, to provide a charitable tax deduction and an assured lifetime income; and

WHEREAS, Gift planning helps charities build "rainy day" funds that are then available to assist in unexpected emergencies, such as the relief efforts in Haiti; and

WHEREAS, Gift planning has a major impact on the future viability of charitable organizations that are highly dependent on the philanthropic spirit of its donors; now, therefore, be it

Resolved by the Senate of the State of California, the Assembly thereof concurring, That the State of California and the Legislature recognizes and supports the importance of gift planning awareness by declaring October 1, 2010, as California Plan Your Giving Day; and beit further

Resolved, That the Secretary of the Senate transmit copies of this resolution to the author for appropriate distribution.

Should You Include Testamentary Powers of Revocation in 2010 CRTs?

2010-05-05T09:55:00.000-07:00

I received a call from a charity officer today who is in a debate with other local charities as to whether testamentary powers of revocation should still be included in charitable remainder trust documents executed in 2010. Since several charities have voiced this concern I thought it would be appropriate to address this topic in a blog post.

What is the concern all about? When the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) was passed, Congress created an estate tax regime that called for repeal of the federal estate tax in 2010. However, Congress also included in Section 2511(c) a lesser known provision that provides that transfers made to nongrantor trusts in 2010 would be treated as completed gifts.

The IRS recently released Notice 2010-19 to clarify that Section 2511(c) isn’t intended to apply to grantor trust arrangements that were already taxable. However, the IRS neglected to address whether Section 2511(c) applies to the most familiar nongrantor trusts to the charitable community – charitable remainder trusts.

Application of Section 2511(c) to charitable remainder trusts (CRT) would result in a taxable gift for a transfer made to fund a CRT to benefit another. Typically, a testamentary power of revocation is included in the trust document to avoid a completed gift and permit a donor to use annual exclusions each year to cover the gift consequences of the value of the income stream paid to another person. In 2010, up to $13,000 annually is excludable for gift tax purposes.

A literal reading of Section 2511(c) would appear to place use of testamentary powers in CRT documents into question if, in fact, the donor must treat the transfer at the time of trust funding as a completed gift. The Section 2511(c) limitation was created by Congress to avoid income shifting as a way to prevent both gift and estate taxes. Since, this is not the purpose of a CRT, Section 2511(c) was never intended to make into taxable gifts the transfers to fund these charitable arrangements.

Conrad Teitell, as Counsel for the American Council on Gift Annuities (ACGA), has requested that the IRS issue guidance stating that Section 2511(c) does not apply to CRTs. Should you continue to include testamentary powers of revocation in CRT documents? I think the answer is yes.

A donor has until April 15, 2011 to file a gift tax return if any tax will in fact be due on a transfer to fund a CRT. However, between now and that filing deadline we hope to have interim guidance from the IRS as to the applicability of Section 2511(c) and it is still possible that Congress will pass a new estate tax bill fixing some of these issues before end of year. So, it is important to maintain existing trust powers to preserve the option of gift tax avoidance for donors funding charitable remainder trusts in 2010.

For more information on creating charitable remainder trusts and trust document provisions please contact Crescendo at 1-800-858-9154 and ask to speak with one of our attorneys.

The News from ACGA -- New Rates; New Survey on Gift Annuities

2010-04-29T18:22:00.000-07:00

I thought I would write a short update from the American Council on Gift Annuities (ACGA) Conference in New Orleans for those of you who were unable to make it this year. I will start with the big news -- The ACGA Rates Committee announced a slight rate increase effective July 1. Here is a summary of the announced changes:

*Rates rise slightly for younger annuitants, but top rate remains at 9.5 (for persons age 90)
*Total annual return on gift annuity reserves increases from 5.25% to 5.50% (the rate for compounding for a deferred gift annuity becomes 4.50% which is 5.50% minus 1% assumed expense)
*Rates now assume gift annuity payments are made quarterly (most common frequency)
*Rates Committee is considering a move from the concept of 50% residuum (the charity will end up with 50% of the gift amount) to present value at a future time

For a detailed schedule of the new ACGA rates and further explanation, please visit the ACGA website at http://www.acga-web.org/

The Committee also released the 2009 Survey of Charitable Gift Annuities this week. Here are just a few highlights from the Survey:

*170,347 reported gift annuities under management ($3.22 billion in assets)
*$307.5 million new gift annuities reported during last fiscal year ($702,155 average new gift annuities per organization)
*$43,371 average size of CGAs
*81.6% average residuum
*55.9% of annuitants are female
*Age 79 average age of annuitants at the time of gift
*Age 64 average age of deferred annuitants at the time of gift
*10.1% of all gift annuities are deferred annuities
*97.3% of organizations use ACGA rates

The complete survey may be obtained on the ACGA website. It's been a great conference! For those of you were unable to attend this year, we hope to see you in San Francisco in 2012. Also, if you are not already a sponsoring organization, consider joining ACGA. Visit their web site for more information on the benefits of sponsorship including education, training and valuable resources for anyone issuing charitable gift annuities. Well, that's all from New Orleans tonight. I'm off to the jazz festival!

The Correlation between Gift Annuities and Bequest Giving

2010-04-22T09:32:00.000-07:00

I’ve heard numerous stories over the years about donors who created gift annuities with and also made bequests to the same charity. And I’ve felt confident enough to share anecdotal evidence of the correlation between gift annuity and bequest giving. I recently gave a presentation to the Savannah Area Planned Giving Council and a member of the audience, Doug Morrow, offered to share with me one charity’s gifts data supporting my premise.

Doug was formerly the development director for the Baptist Children’s Home & Family Services in Carmi, Illinois and now works as a consultant. During his time at the charity, Doug became aware of the relationship between gift annuity and bequest giving. He later decided to make a study of this phenomenon and record his observations based on the organization’s data. Doug’s research covers gifts received by the charity over an eight year period (1998-2005).

Doug’s data shows that in eight years, 90% of donors who made life income gifts (primarily gift annuities and a few charitable remainder trusts) also gave the organization bequests or created additional life income planned gifts. In other words, 9 out of 10 planned giving donors made bequests or planned gifts multiple times (donors created multiple gift annuities). During the eight year period, receipts from planned gifts life income agreements totaled $1,042,908.12 while bequests from the same donors totaled $3,044,271.00.

Over the eight year period, gift receipts totaled $15,487,179 to the organization. This included $11,400,000 in cash receipts and $4,087,179 in proceeds from deferred gifts. During this period, Doug wore multiple hats as the organization’s only development and communications staff (although he was later able to hire support staff). Anyone who is trying to determine how to manage time and staff resources as a small development shop should consider the cost benefit analysis Doug’s data shows -- More than 25% of gift income was produced from planned gifts using approximately 5% of staff resources!

It is clear that a charitable gift annuity program enables the charity to develop trust and relationship with a donor in such a way that grants implicit permission to talk about the donor’s larger estate. If a gift annuity program is foundational to your charity’s work, you can and should be cultivating your gift annuity donors for bequests and other testamentary gifts. In essence, the charitable gift annuity become a starter program for a deeper relationship with the donor and often much more meaningful transformative gifts.

To learn how to increase gift annuities and bequests for your organization, call Crescendo at 1-800-858-9154 or visit our website at http://www.crescendointeractive.com/

What Compels Women Donors to Make Planned Gifts?

2010-04-14T09:23:00.000-07:00

On my last plane trip, I finished reading “Women, Wealth & Giving: The Virtuous Legacy of the Boom Generation” by Margaret May Damen and Niki Nicastro McCuistion. The book provides some great insights into the motivations and passion behind women engaged in philanthropy. Given that women will inherit vast wealth in the decade ahead and are often the surviving spouse with the ability to make ultimate dispositions to charity, the topic of how to reach women donors is an important one.

I spoke with Margaret May Damen this week about her new book and her thoughts on ways to market planned gifts to women donors of the boomer generation. Margaret says that we need to begin by talking with women about their life stories. Who influenced them along the way? What is important to them? What are their values? These are really good questions to ask any potential donor. We should ask what are they passionate about, how is that passion connected to who they are and what type of change do they want to see during their lifetime. Margaret says the goal is to help women connect their hearts to their heads to their pocket books.

Identifying womens’ passions and helping them to become more strategic in their giving (focusing on what really make a difference to them) gives women purpose. Margaret sees many women who are 50 and above who have reached some success in their life whether as entrepreneurs or women who have now raised families or inherited wealth. Women want to move from success to significance as they look forward in life. In putting the voice of their purse behind their passions, women can leave a lasting legacy through a planned gift.

What compels women to make planned gifts? Margaret offers these thoughts:

-women have the passion to do something different
-planned gifts are necessary in this world today
-women are giving larger and more strategic gifts
-planned gifts are strategically put together
-women want to live their dream now
-planned giving can start during life and continue after
-women are not afraid of the ask
-women will make more gifts and larger gifts if asked
-women can be an incredible force in planned giving!

The takeaway point here is that to reach women as donors we need to talk with them, hear their story and then see how their values can encourage their participation in planned giving. I think Margaret says it best – “Virtue is back in vogue and women can and will leave a virtuous legacy.” It’s up to us to understand and cultivate women as donors, encouraging them to create a legacy to be remembered.

For more ways to cultivate and encourage planned gifts from your donors please give us a call at 1-800-858-9154 or log on to our website at http://www.crescendointeractive.com/.

More on the Best New Way to Market Bequests

2010-04-08T09:42:00.000-07:00

I shared in my last post the story of LSU’s recent wills campaign. As you recall, their Director of Gift Planning, Jane Henslee, used an integrated approach by including information on her website, e-mail and print publications on wills planning. The results were phenomenal, with LSU receiving numerous requests for the wills kit to be sent both by e-mail and mail.

Jane shared with me her first bequest campaign success story. A couple requested LSU’s kit for creating a will after reading one of Jane’s e-mails promoting wills planning. The lady was an LSU alum from a family with generations of LSU grads and her husband was very supportive of LSU. After taking care of their family, the couple decided to leave the LSU Foundation a substantial residuary bequest.

Jane said that when the donors first contacted her they were not working with an estate planning attorney. Because Jane had included a link to LSU’s professional advisory council on the LSU planned giving web page, she was able to direct the donors to this page. The woman found an estate planner on the LSU website that she shared an interest with and contacted this person to begin work on their plan.

Recently, Jane went to lunch with the donors who brought a copy of their completed will. The document showed that after bequests to the family, the remaining estate will go to LSU. Even better, Jane was pleased to learn that the bequest is basically unrestricted – and may be used for the greatest need as determined by the President of LSU.

Jane said that LSU has two other significant bequests in the works as a result of the wills campaign. The organization has reached out and found new donors as a result of being on the Internet and received commitments from more first-time donors than ever before. Jane said that LSU followed up on every person that requested a wills kit whether by mail or e-mail and the result were more bequests for LSU.

AFP recently named Jane outstanding professional fundraiser for Baton Rouge. Jane said that her bosses at LSU were very happy with her work this year! The wills campaign has truly been successful for LSU and given Jane’s creativity, time and effort, I expect great things from LSU’s planned giving office in the future.

To learn more about effective strategies to market and close bequests and other planned gifts give Crescendo a call at 1-800-858-9154 or visit our web site at http://www.crescendointeractive.com/.

The Best New Way to Market Bequests

2010-03-31T09:38:00.000-07:00

I talked in a prior post about how bequests are on the rise in part because of the economy and the intergenerational wealth transfer taking place. Since eMarketing enables you to reach a greater number of donors at a lower cost, more organizations will be using eMarketing techniques to achieve donor bequest commitments in 2010. What is the best way to use eMarketing to increase your bequest volume?

Are you familiar with the concept of a campaign? Although this marketing strategy isn’t commonly used for planned giving, it has played a valuable role in many organization’s efforts to raise current dollars. We’ve all heard of capital campaigns, where a charity will set a goal of raising X amount over a period of time and use various methods to encourage supporters to achieve this goal.

A number of charities mounted campaigns in 2009 to increase bequests with amazing results. I was delighted to receive a recent e-mail forwarded from Jane Henslee who is the Associate Director of Planned Giving at Louisiana State University (LSU) Foundation. Jane began marketing bequests this past year as part of a six-week campaign she launched to focus on increased bequest commitments for LSU.

Jane said that she began her campaign by collecting addresses from her IT staff for LSU graduates ages 50-62. Jane removed anyone from the list who was deceased or had an old address and came up with a target group of 15,000 alums for her wills campaign.

Next, Jane began work on a beautiful custom wills planning kit to be offered as a comprehensive estate planning tool for alums. LSU's wills kit is a fill-in-the-blank kit on how to plan your will with space to provide information on your family, assets and intended bequests to family and charity. Jane included the wills kit on the LSU planned giving website as a download and added a short video to market the wills program. In the header of the weekly eNewsletter LSU sends out, Jane offered the wills kit and included a link to the kit directing visitors back to LSU’s planned giving website.

Jane said that one of LSU's print mailings further marketed the wills planning information already available on LSU's website and by e-mail. The wills mailer LSU sent included a card that could be returned by the donor for a free wills kit. The card gave the donor the option to have the wills kit sent by e-mail or mail.

Look for my next posting to hear more on Jane’s wills campaign success story...

To learn more about creating your own wills campaign and other effective eMarketing strategies, give Crescendo a call at 1-800-858-9154 or visit our web site at www.giftlegacy.com.

Cross-Marketing Drives Donors to Your Web Site

2010-03-25T13:00:00.000-07:00

I spoke to planned giving groups in Fort Lauderdale, Florida and Savannah, Georgia this past week about new ways to market planned gifts. The planned giving professionals I talked with shared how they are using a combination of print and e-mail to bring donors to their organization's website. The concept of cross-marketing is an important principle for marketing and equally applicable to the new eWorld. The number one eMarketing tip I receive from gift planners is to cross-market your website. This means utilizing your other marketing medium to drive donors back to your planned giving web pages.

I recently spoke with a gift planner who is very effective at cross-marketing – Jonathan Rich, Director of Gift Planning for Ducks Unlimited (DU), a wetlands conservation organization based in Memphis, Tennessee. Jon shared with me how he uses every opportunity to direct his donors back to DU’s planned giving website www.DucksGift.org.

DU produces a magazine every other month in which John includes two ads where he highlights donors to their organization. At the bottom of each ad, John encourages readers to visit DU’s planned giving website for additional information by including their organization’s short web address. John says that the donor story ads result in increased traffic on DU’s planned giving pages and he sees quite a bit of activity on their calculator pages.

John also includes information about their planned giving website on DU’s brochures that are sent through the mail and offered at donor visits. When John conducts donor seminars, he promotes DU’s planned giving pages and the ability for donors to run personal calculations on their site. John says that he frequently communicates with donors who refer to information they’ve read online. This tells Jon that their website is working to educate DU’s donors on planned giving even before they talk with him.

John says that there’s no question that their website has helped raise more dollars for DU. DU has documented over $100 million in planned gifts since he launched their planned giving website. John says DU’s gifts have multiplied as a result of eMarketing – The organization is now averaging $20-25 million a year in documented planned gifts!

For more information on how you can multiply your gifts using eMarketing techniques please call Crescendo at 1-800-858-9154 or e-mail us at www.giftlegacy.com.

eMarketing Multiplies Time for Busy Gift Planner

2010-03-18T18:06:00.000-07:00

In my last post, I talked about Judy Cash of University of Virginia’s McIntire School of Commerce and her efforts to build relationships with professional advisors. Judy has so much good information to provide about her marketing program that I decided to write another post on her work at McIntire.

Judy says that most of her donors begin by finding McIntire’s planned giving website or end up there to peruse further information. She refers everyone to the website and generates a lot of traffic that way. By looking at her web statistics, Judy can see that the site is most frequently accessed through UVA's home page. Judy watches her weekly and monthly web statistics and the increase in web visits over time tells her that there is a lot of interest in planned giving.

Judy says she spends most of her time traveling and following-up on donors who came as a result of web and e-mail marketing efforts. For example, recently she spent six hours with a donor discussing a large gift (in the range of $6 million - $10 million) coming to McIntire. When you consider that Judy is a one-person planned giving shop, she doesn’t have the time to reach out to all of her potential prospects on a weekly or even monthly basis. The website multiplies her abilities to greet and serve many more supporters.

Judy says she knows that there are a lot of alums she may be unaware of who have included planned gifts to McIntire in their estate plans. Using electronic outreach and online wills planning information (like the downloadable wills guide on McIntire’s website) has helped her identify and book bequests. Judy says that e-mail outreach is another key to her success. All of these strategies together appear to be working for Judy who shares new success stories with me each time we talk.

Are you interested in multiplying your time and gifts? To learn more about effective strategies to market and close planned gifts give Crescendo a call at 1-800-858-9154 or visit our web site at www.giftlegacy.com.

Advisor Networking Makes the Difference!

2010-03-11T10:34:00.000-08:00

How important is it to have content on your planned giving web site for professional advisors? The answer is very important! I can’t tell you how many times I have heard the story of an advisor who referred a donor to a charity resulting in a substantial charitable gift. If you are not already networking with advisors, you should be since their recommendations can be an excellent source of gifts to your organization.

One of the best ways to reach out to advisors is by including information of interest and help to them on your planned giving website. For example, many organizations already include charitable tax deduction calculators, tax news and comprehensive tax planning guides like GiftLaw Pro on charitable websites. Additionally, these same charities stay in touch by sending weekly e-mails to advisors with links to the latest tax materials, articles and case studies.

I can tell you that the GiftLaw Pro tax reference is one of the most popular features of Crescendo’s planned giving website, based on total visits. I had a conversation with Judy Cash of University of Virginia’s McIntire School of Commerce this week and she confirmed that the GiftLaw portion of McIntire’s web site receives the most traffic from advisors, resulting in major gifts to McIntire and UVA.

Judy said that the advisors she talks with like her web site because the tax information is easy to access and comprehensive. Judy cited over 3,200 GiftLaw Internet visits in the final week of 2009 (December 27-Jan 2nd) and she didn’t even send out an e-mail that week marketing the site. (Total visits to Judy’s site exceeded 236,000 page views in 2009!)

Judy also said that she receives calls on a regular basis from attorneys and advisors who are working on gifts with donors she is unaware of and who are looking at the web site. One called her recently to confirm that McIntire’s bequest language (that is available on the website) was correct for purposes of including it in a donor’s estate plan. Advisor networking is making the difference for McIntire and resulting in more gifts.

To hear more about Judy’s success in raising gifts for McIntire, look for my next post….

To learn more about effective strategies to market and close planned gifts give Crescendo a call at 1-800-858-9154 or visit our web site at www.giftlegacy.com.

The Gift Planning "Snowball Effect"

2010-03-03T09:52:00.000-08:00

I've been hearing the phrase gift planning "snowball effect" recently as I talk with gift planners around the country. The "snowball effect" refers to the multiplication of gifts through effective planned gifts marketing and donor cultivation strategies. I heard this phrase again this week when I spoke with Jennifer (Jenny) Nohelty of Gift Planning Services (GPS). Jenny works with religious organizations and churches to secure planned gifts and has been very successful. In fact, her efforts have secured over $100 million in documented deferred gifts over the last two years.

I asked Jenny about the secrets to her success and she mentioned the "snowball effect." Jenny said that the tools on her planned giving website have helped her identify more new donors than ever before. Individuals with no prior gift history find her website and turn into major donors. Jenny says that her website helps potential donors "self identify" when they provide information through the online "contact us" buttons. The donors who are really interested in giving respond to the compelling donor stories and articles. Postcards that include Jenny's planned giving URL have also helped to increase donor responses (donors return response cards) and bring donors to her website.

Once a donor visits GPS's website and inquiries about a church or organization they wish to support, Jenny gives the donor a call and often follows-up with a visit. Jenny makes an important point -- The personal aspect of the donor cultivation process is still there, even though eMarketing is used in making the initial contact. eMarketing simply provides Jenny with a greater number of donor prospects to visit.

After a visit, Jenny often encourages a potential donor to go back to her website for additional information. Here, the donor has the ability to run further gift illustrations, read and dig deeper into the different planned giving options. Jenny also conducts seminars to help donors better understand the reasons to include charitable giving in their estate plan. Jenny captures another meaning of the term "snowball effect" here, as she recounts stories of donors who move from regular contributors to bequest givers. Once donors realize that they can leave a legacy through their estate, Jenny says it has a "snowball effect" multiplying the donor’s gifts and gift giving potential.

Are you looking for the "snowball effect?" Give Crescendo a call at 1-800-858-9154 to learn more about effective strategies to market and close planned gifts or visit our web site at www.Crescendointeractive.com.

eMarketing Success: Fresh Information is a Must!

2010-02-25T09:24:00.000-08:00

As I talk with gift planners and fundraisers on a daily basis, I like to get a sense about what strategies are really working for web and e-mail marketing. I spoke with another successful planned gifts eMarketer this week, Glenn Pittsford of the Texas A&M University Foundation (TAMU). Glenn raised over $61 million in documented planned gifts in 2009 using eMarketing techniques. He shared with me some of the components that have made TAMU Foundation’s program so successful.

TAMU Foundation sends out over 75,000 donor e-mails each month. Glenn said that keeping his e-mails fresh with new content and response generating mechanisms is what keeps donors interested. He uses e-mail to offer brochures and wills planning kits -- offers which generate weekly responses from donors. Glen said he also uses e-mail to market donor events and secure free no-obligation donor visits.

Glenn said that TAMU Foundation’s planned giving website’s fresh quality content that drives donors back again and again to see something new has been essential to his efforts. He updates his site on a regular basis with information on what’s happening at TAMU and he sees their page loads growing. The TAMU website receives 25,000 page views on its planned giving website each month. Glenn said the combination of web and e-mail enables Texas A&M to reach over 100,000 eContacts per month.

Glen finds that gift planning works best when the TAMU Foundation provides quality information. The donor will contact the TAMU Foundation if he or she is interested in creating a planned gift. The Foundation’s website provides good content that educates and motivates donors and Glenn says that donors contact the Foundation more often than not for additional information. It’s clear that Glenn has found a better way to reach and serve his donors and with $61 million in planned gifts closed last year this strategy is working!

To learn more about effective strategies to market and close planned gifts give Crescendo a call at 1-800-858-9154 or visit our web site at www.Crescendointeractive.com.

Do You Need to Refine Your Gift Acceptance and Receipting Strategy?

2010-02-18T07:03:00.000-08:00

I recently attended a charity event where one of the staff proudly announced to those present that the organization would not be sending charitable receipts this year. Donors could go online and print out a receipt for tax purposes, which would save the organization on mailing and postage costs.

While I am an advocate of online donor marketing and a strong proponent of cutting charity costs, my immediate reaction was that this charity had sacrificed donor relations for the sake of convenience. Sending a gift receipt by mail or e-mail gives a charity a chance to make another touch with a donor (sometimes many months after the gift is made) and continual touches turn one-time givers into long-term supporters.

Why is it so important to make an extra contact to a donor in acknowledgement of a charitable gift? Aside from providing the donor with substantiation for tax purposes, that letter, e-mail or call is a way to thank the donor again for their generous support and let her or him know how their gift will be used.

If you send a thank you note through the mail, you can also include a brochure marketing gift annuities or bequests or a flyer advertising a donor seminar or special event. (E-mails may also include links to brochures or event sign-up pages.) I know one charity that includes a card for a donor to request a personal visit. And these one-on-one donor chats have resulted in gifts for this organization.

Many charities understand what I am saying here. They already send gift receipts and thank you letters, recognizing the importance of building relationship. That being said, some of the gift acceptance letters I see are not donor friendly and do little to build the trust that will ensure gifts for years to come.

I spoke with one charity last week who read me a letter they planned to send to their donors. The letter cited so many IRS code sections and technicalities, that it was barely readable. If your letters read like an IRS Private Letter Ruling, your donors likely won’t read them and you will have missed the perfect opportunity to connect. A good gift acceptance letter needs to be friendly and mission oriented.

I’ve asked a number of charities to send me copies of their thank you letters and gift receipts. I like one university’s approach the best. This charity sends a friendly donor thank you note that doesn’t even reference the amount of the gift or include the IRS language. Rather, the letter talks about how the donor has helped further the university’s work to educate students and prepare them to enter the world. Enclosed in the same envelope is a postcard-sized gift receipt with the date, amount and IRS disclosure language. Using this approach, this charity both substantiates the gift and furthers donor relationships.

As you are thinking about your gift acceptance letters and reviewing your substantiation for the 2010 tax year, make sure that you are using this opportunity to build ongoing relationships. Marketing experts will tell you that a series of positive contacts are necessary to achieve a response, and the same is true for donor relations. By following-up with regular friendly touches, you will win long-term friends and lifetime donors for your organization.

To learn more about eMarketing for planned gifts visit http://www.giftlegacy.com/ or Call Crescendo at 1-800-8588-9154.

What Should You Tell Your Donors About the Estate Tax Uncertainty?

2010-02-03T10:12:00.001-08:00

I have received a number of questions in the past week regarding the message charities should send to their donors in light of uncertainty over the federal estate tax. In case you have missed this, the federal estate tax is repealed for 2010 unless Congress can reach an agreement. An unofficial survey of practitioners attending the Heckerling Estate Planning Conference in Orlando, Florida, last week provided no consensus as to how Congress will act.

There are three possibilities for resolving the federal estate tax dilemma: First, Congress could reinstate the estate tax retroactive to January 1, 2010. Second, the estate tax could be repealed on January 1, 2010 and reinstated later in the year. Third, Congress could fail to act at all in 2010. Inaction would result in reversion to a $1 million estate tax exemption (with an indexed increase) and 55% tax rate in 2011.

Regardless of whether Congress acts or not, if you are a charity marketing planned gifts you are probably wondering what should be said about the estate tax and how this could impact your fundraising for 2010. Several charities have included information on their website that essentially recites Congressional inaction on estate tax reform and tells donors that they may wish to contact their advisors to review existing plans. The problem is that most estate planners don’t know what to do with existing plans because the law is so uncertain.

Many practitioners say that unless a person is likely to pass away in the next year, they won’t be revising plans. Also, most clients won’t bear the cost of making a change now only to have to change the plan again when Congress acts. In terms of settling estates, the majority of practitioners plan to put-off estate distributions, file a six month extension of the estate tax return and plan to file returns in 2011. By that time, they hope that this predicament will be resolved.

Therefore, most estate planning is on hold right now. While you as a charity may want to offer current information to your donors, there is no marketing reason for most charities to highlight the uncertainty of the estate tax. Providing confusing estate tax information on your website and by mail to your donors could actually result in your donors holding-off on making planned gifts in 2010. A better approach is to go low profile on any discussion on the estate tax until we have something concrete to discuss.

So, whether estate tax deductions for testamentary gifts are in jeopardy for 2010 is not a debate you want to get into with your donors. Printing information about nondeductibility of gifts across the front of your planned giving website is not going to help increase gifts for your organization in 2010.

Your goal should be to provide current information to donors on gift planning options you know to be effective. We suggest information on gift annuities to reach your donors who are seeking security in uncertain markets. In addition, you could highlight charitable remainder trusts to those who wish to sell appreciated asssets and avoid tax increases beginning in 2011.

Keep providing quality information about real gift options to your donors. When there is more information available about the estate tax, then consider talking about that then. By taking this approach, you will continue to win friends and loyal donors who recognize that your goal is to help further your charity’s work and provide good service to those who support your mission in 2010 and well into the future.

For more ways to market gifts in 2010 visit http://www.crescendointeractive.com/ or call 1-800-858-9154.

Roth IRA Conversions: A Great Opportunity to Market Planned Gifts

2010-01-27T05:54:00.000-08:00

I’m writing this post from the Heckerling Estate Planning Conference in Orlando, Florida. The conference is always a great opportunity to hear from the top estate planners in the field. This year is no exception. In fact, it’s actually a very interesting year for Heckerling. With repeal of the estate tax, practitioners are wondering what to do with existing estate plans and how to handle future planning.

Today I attended a session taught by Chris Hoyt, Professor of Law at the University of Missouri Kansas City and a familiar face to many in the planned giving industry. Chris spoke on new options to convert a traditional IRA to Roth IRA in 2010. Prior to 2010, persons with incomes over $100,000 could not make these conversions. The conversion income limits are eliminated for 2010.

As Chris pointed out, many people will make conversions in 2010 because of the benefits of a Roth IRA including tax-free IRA growth of assets, future tax-free withdrawals and no minimum distribution at 70 ½. However, there is a tax cost. Individuals will be taxed at ordinary income levels on Roth conversions, since a traditional IRA is funded with pre-tax dollars.

There are several options for paying the tax. An individual can elect to pay the tax in 2010 when the conversion is made or spread out the taxes over the 2011 and 2012 tax years. (The federal government will permit deferral of the tax on a 2010 Roth conversion.) However, a person could also make a charitable gift in 2010 to offset the tax. The 2010 conversion option presents a unique opportunity for charities and advisors to market planned gifts to offset taxes incurred by donors on Roth IRA conversions.

For higher income earners (who may pay tax at higher rates in 2011) and those who wish to pay the tax this year, a charitable gift in 2010 (either outright or to fund a life income plan such as a CGA or CRT) makes a lot of sense. This is because the tax savings from a charitable deduction will result in a dollar-for-dollar offset on a donor’s 2010 income. Given the taxes a donor could owe on a Roth conversion, you can see why charities and advisors should market Roth conversion charitable gifts in 2010.

Crescendo has developed marketing materials for this unique gift opportunity. To learn more about Roth conversion charitable gifts and obtain proven marketing materials, give Crescendo a call at 1-800-858-9154 or visit www.giftlegacy.com.

A New Year and a New Way to Market – Part IV

2010-01-20T09:33:00.001-08:00

In my prior posts, I’ve already given you reasons why eMarketing is more cost effective and environmentally friendly than sending donors print mail. Marketing experts will also tell you that print distribution rates are on the decline.

How many of you actually read all of the mail you receive from charities? I admit, I don’t. I’m on so many charity lists that I might even receive an envelope in the mail and throw it away unopened if it doesn’t peak my curiosity. However, if I receive a e-mail I usually take the time to click it open and see what it has to say.

A person can open and peruse multiple e-mails in less than one minute, processing information in a way that enables them to sort out what is important and delete what is not of interest. In other words, you can process multiple e-mails in the same amount of time that it takes to open a single letter. And with print mail, you may never even open the envelope and read what is inside.

E-mail distribution with an opt-in by a donor who wants to stay informed continues to rise and the charities who want to capture this population of “younger” donors are going to need to reach them through tech savvy means (this includes charity Facebook pages, tweets and blogs). So, if you are ready to capture the attention of your donors in this fast-paced world of web, e-mail and social networking, welcome to the future of philanthropy.

For more information on effective ways to generate gifts through eMarketing visit http://www.crescendointeractive.com/ or give us a call at 1-800-858-9154.

A New Year and a New Way to Market – Part III

2010-01-13T10:07:00.000-08:00

As I mentioned in my last post, the cost of e-mailing a donor is signicantly less than sending a typical donor mailer. When you consider that postage and mailing costs are only going to go up over time (The U.S. Post Office is running a serious deficit this year), it’s clear that e-mail distribution will be the way to go in the future from a cost standpoint. No question about it.

But, the answer becomes even more obvious when we consider the environmental argument. Do any of you have “green donors”? These donors value our environment, they want to avoid cutting down more trees and they are offended by the copious amounts of paper charities send.

Did you know that the average charity sends 13 mailings each year? Do you know how much paper that is? As your donors become more environmentally sensitive, you as a charity will want to be sensitive to their needs and offer e-mail rather than print mail options. Take my word for it-- You will do this because you want to keep your donors happy and a happy donor is a long-term donor.

So, I think it’s clear that while print may be around for a long time, the trend is going to be more e-mail and less print mail for donors in the new decade ahead. This is already happening on the for-profit side. Anytime you purchase something online you are asked for your e-mail address so that you can receive updates. Note, no one is asking you for your print address, with the exception of candidates who still haven’t figured out that in the last two elections the winners mounted massive e-mail and social networking campaigns to win.

Look for my next post to hear more on this topic…

For more information on effective ways to generate bequests and other gifts visit www.Crescendointeractive.com or give us a call at 1-800-858-9154.

A New Year and a New Way to Market – Part II

2010-01-03T17:31:00.000-08:00

As I explained in my last post, it does not make sense to market bequests to younger donors using primarily print media when we know that this group is gleaning the majority of their information from websites and e-mail.

There have been arguments in the past as to whether the seniors 65+ are on the Internet. This fact is now settled following a series of studies that have shown that seniors are regularly using online banking, making travel plans online, posting to their Facebook accounts and even tweeting. No one makes the argument that the 40-50 year olds are not using the web and e-mail because we all know that they are there. The question is how frequently are they out on the Internet, checking their e-mail and looking at their Facebook pages—The answer is a lot!

So, it makes sense that the best way to market to this group is not primarily with traditional print mailers – It’s with the Internet and e-mail and through social networking. Marketing experts know that the effective for-profits and nonprofits of the future will be using more e-mail marketing and less print. Why is that? First of all, my friends in the print business tell me that the cost of sending a typical mailing is 85 cents per donor. What is the typical cost of sending an e-mail? Well, I figured out the cost of using Crescendo’s GiftLegacy e-mail server to send out one weekly e-mail to a single donor and the cost was less than one cent.

Now we can argue about whether my number is accurate and let’s face it, there is some cost variation in the industry. One charity told me that they are already paying $1.50 per donor for print mailings, while another was closer to 85 cents. I chose the more conservative cost assumption for this analysis. Also, different e-mail providers will charge different prices. Because I know what Crescendo’s e-mail cost is, I can use it for illustration purposes. I can't tell you what others are charging. But, the bottom line is that the cost of sending e-mail is significantly less than the cost of sending print mail and any marketing expert who tells you otherwise simply has not sat down and done the math.

So, in the future when your CFO is looking at how your planned giving budget dollars are spent, do you think he or she is going to want to approve your expenditures on print mailings or convince you to go the less expensive route of e-mail distribution?

Look for my next post to hear more on this topic…

For more information on effective ways to generate bequests and other gifts visit www.Crescendointeractive.com or give us a call at 1-800-858-9154.

A New Year and a New Way to Market – Part I

2009-12-28T07:23:00.000-08:00

The New Year is almost here and we’re entering a new decade with the start of 2010. The economic challenges of 2009 were difficult for many charities who watched the decline in cash donations. As a result, charities had to rethink strategies and find new ways to market gifts in a world where donors found less cash in their pockets (or at least felt they had less discretionary money than before the market crash).

Despite the challenges of 2009, there is good news for planned giving in the New Year. With the focus shifted from cash gifts to long-range strategies, planned gifts are more marketable than ever. And the bequest, still the largest volume planned gift, will continue to become increasingly popular as a future gift from donors unwilling to part with current cash resources.

With the intergenerational wealth transfer beginning as the Baby Boomers become the largest recipients of wealth in generations, there will be new money available for charitable bequests. Several studies in 2009 pointed to the fact that bequests should be marketed to an even younger generation (those in their 40s and 50s) rather than focusing solely on the 65+ population.

We know that many people begin planning in their 30s or 40s, so it makes sense that if a charity wants to be included in that first will (and remain there) it begin marketing bequests to a “younger” group. This being said, the assertion that marketing to a “younger” group means that we should expand our print marketing by mailing this younger group a segmented set of brochures, quarterly newsletters and postcards geared specifically to them is fundamentally misguided. Why is this approach so wrong?

Look for my next post to hear more on this topic…

For more information on effective ways to market bequests and other planned gifts visit www.Crescendointeractive.com or give us a call at 1-800-858-9154.