By Ted Rodgers, President and Executive Consultant
What if I shared that there was one thing you could do today as a development professional that could impact your ministry decades from now? What comes to mind? Scheduling a meeting with a significant potential donor? Hiring the next missionally aligned senior leader? Charting the right strategic path? Yes, those are all important. But in my experience, the most overlooked fundraising strategy is often even more future-oriented: building your legacy giving program.
A legacy gift, also referred to as a planned gift or an estate gift, is a donation that your ministry and a donor arrange in the present but which is allocated to your ministry after the donor passes away. It is a fundraising strategy that is undeniably important but rarely feels urgent.
Why is having a legacy giving program so important? The upside for you and your ministry partners is significant. Here are some key reasons:
Financial Benefit (Both Now and Later)
- Your faithful partner’s legacy gift will often be their single largest gift, likely more than their lifetime giving.
- Confirmed legacy donors also tend to increase their annual giving–sometimes up to 70%!
Meaningful Stewardship
- Planning a legacy gift gives your donors a chance to make a truly meaningful stewardship decision by continuing to partner with your ministry well beyond their lifetime.
- It encourages your donors to see that you are investing in the long-term health of your ministry.
With this particular strategy, timing is important. There are ample reasons not to delay in getting your legacy giving off the ground:
- As Baby Boomers’ estates transition to their heirs, an unprecedented wealth transfer is already upon us. Over the next several decades, we expect $80 to $100 trillion to transfer, with as much as 20% of this going to charitable causes.
- Early planning is key. Donors need to be asked sooner than you think since, over time, they may lose their capacity to complete the planning required to make their gift. Most charitable estate plans begin to take shape when donors are in their late 40s and 50s.
One of the Taking Donors Seriously principles guiding our fundraising at The FOCUS Group is this: People give because they’re asked and shown how. I often remind clients that the number one reason people become legacy givers is because they were asked. It’s that simple.
What might this look like? In my next blog, I’ll outline some key steps to getting your legacy giving program off the ground. For now, as you think about how to approach your donors, here are a few things to keep in mind:
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- It’s an invitation to go further into your mission. For your missionally aligned donors, a legacy gift is a “Kingdom-forward gift” that reflects a step of faith and a deep commitment to the mission of your organization. While there may also be tax benefits and other financial incentives, we always approach these conversations from a missional perspective, inviting donors to continue to partner with us.
- Your focus is the relationship with your donor. There is freedom in remembering that you don’t have to be the expert on every type of giving instrument. There are many to choose from, and donors can and should seek advice from estate planning professionals to make the wisest choice regarding their giving. Your role is to invite them to consider a legacy gift and continue to care for and nurture your relationship with your ministry partner–even if they are not ready to move forward with a legacy gift.
- Include legacy giving in the regular conversations you’re having with donors. Whether you are launching a capital campaign or updating a ministry partner on your organization’s progress throughout the year, these relational touchpoints are the ideal time to bring up the topic of legacy giving. When your donors know you care about them as people, not just their financial gift, these conversations are natural and welcomed.
A few years ago, a school president asked me to join him for a legacy gift conversation with one of his former board members and a long-time ministry partner. As we sat in his living room, the former board member recounted some of the school’s challenges in its early years and how he was now convinced of the importance of making a future gift through his estate. Fast forward three years, and the school was close to completing its first-ever capital campaign. They had made incredible progress but were stalled getting over the finish line. One day, I got a call from that president who told me that his former board member had sadly passed away and that he had just received word of an unexpected six-figure legacy gift from him. That gift put them over the top of their campaign goal.
Gifts don’t always come in that quickly, but God’s timing is always right. In fact, the impact on the school in that season was so significant that we couldn’t help but wonder if that donor had some premonition that his time was short. We were moved to thankfulness for his “Kingdom-forward gift” and that he had chosen to make that thoughtful plan over three years before.
So, as you review your to-do list today, which tasks might benefit your ministry years from now? Consider how you can take steps forward today with your legacy giving.
Looking for a next step? Learn how to Launch Your Legacy Gift Program on a Lean Budget at our upcoming TFG Institute!
We’ve been privileged to help many organizations be more effective in their fundraising by learning and implementing relational fundraising principles in their work with donors. Want to talk?