Planned Giving Doesn’t Have to Be Scary

Imagine the scene: The meeting’s going well with your prospective donor; she’s all ears and all smiles about your nonprofit’s great work.

Then the hesitation sets in. The deep breath. And the frightening perspective that some prospects have about making a planned gift: It seems so permanent, perhaps overwhelming or even a bit scary.

Your role? Take the scare out of it. Here’s how to discuss those hesitations and make planned giving a treat to complete.

SCARE: “I’m worried that I’ll outlive my retirement income. A planned gift doesn’t seem practical right now.”

SCRIPT: “Does it help to know that many other donors, like you, that I work with share the same concern? You’re not alone. But the good news is, you have options. Options that will provide you with a fixed, dependable income for life and support our work at the same time. Let’s talk about how these life income gifts work. …”

SOLUTION: Charitable gift annuities enable donors to make a donation using cash, marketable securities or other assets. In exchange for the lump-sum gift, donors receive fixed payments for life. Payments don’t fluctuate with the stock market, interest rates or inflation because the rate is set at the time of the gift. After their lifetime, or that of their beneficiary’s, the remaining balance is used to support the nonprofit’s work.

Another option: Charitable remainder trusts enable donors to receive extra income by creating a trust and giving assets to it. Donors and their beneficiaries receive income (either a variable or fixed dollar amount) from the trust each year for the rest of their life or for a period of up to 20 years.

WHAT DONORS TELL US: “It’s a gift that assured me that my spouse would be taken care after I was gone. It also provides us with extra income now, income that we can depend on.”

SCARE: “It might cause conflict in my family.”

SCRIPT: “Your concern makes absolute sense. Of course you want to ensure that your loved ones are properly provided for and that your choice to support our nonprofit doesn’t create discord. But there are ways to minimize that concern and, at the same time, help your family understand why this decision is important to you. You’re also setting a good example of giving to help others. Let’s talk this through. …”

SOLUTION: Family comes first. The key is to be upfront with family members early in the process. Encourage donors to tell them about their decision and why they made the choice to support your nonprofit with a planned gift. This is a crucial point to convey, so families better understand the reasoning behind the gift and, hopefully, become more emotionally connected and supportive of the donor’s decision. Welcome donors to invite family members to events or other activities and meet with you if they want more information.

CONSIDER: Nearly 75% of Americans age 30 and older who expect to or already have received an inheritance say it’s reasonable to leave a percentage to a charitable organization.*

SCARE: “I’m on a tight budget right now. I don’t think I’d ever have enough to make a planned gift.”

SCRIPT: “You’re not alone. It can be hard to see beyond the needs of today, especially with family, saving for retirement and health care costs—it adds up quickly. But that’s the great thing about a planned gift; it’s asset-based and will not impact the cash you need now. Consider these simple and easy options…”

SOLUTION: Donors can name your nonprofit as a beneficiary of all or a percentage of an IRA or insurance policy, bank account or donor advised fund. Bonus: It’s one of the most popular planned gift options because donors can set it up themselves. Donors’ quick steps:

  1. Contact the plan administrator for a change-of-beneficiary form or download the form from their provider’s website.
  2. Decide what percentage they wish to give and name your nonprofit, along with the stated percentage, on the form.
  3. Sign and return the form to the plan administrator.

TIP: These planned gifts are among the easiest to create. Donors can leave their legacy in three easy steps!

SCARE: “What if I don’t have a relationship with your nonprofit in the future, after I’ve made my gift?”

SCRIPT: “Life changes; we understand. But without you, we simply couldn’t do what we do. And we will do everything possible to ensure that you are part of our future. Depending on the type of gift you make, your decision can also be changed. … ”

SOLUTION: With both beneficiary designations and a gift through donors’ wills or trusts, donors contribute to your nonprofit’s future needs, but the gift doesn’t affect their current budgets. Because this type of gift doesn’t go into effect until after their lifetime, donors can update or revoke their gift at any time they are alive.

BENEFIT: Flexibility. Because the gift doesn’t go into effect until after their lifetime, donors can change their mind at any time.

SCARE: “What if the value of my estate changes? If I leave a predetermined amount to you, I’m concerned there won’t be enough money left over for my family and loved ones.”

SCRIPT: “I get it. I have children and loved ones that I want to be sure are taken care of too. One way I’ve made that happen is by leaving a percentage of my estate to [our nonprofit’s name]. This way, you can give to the charities that are important to you and provide for loved ones if your estate should change. Do you want to know how it works?  …”

SOLUTION: Instead of giving a fixed amount, like $50,000, donors can give a percentage, like 5%, from their estate or of specific assets. This way, they ensure that gifts to loved ones and groups they care about remain proportional, no matter how their estate fluctuates. Percentage giving can be set up in three ways:

  • By gifting a percentage of the donor’s estate to your nonprofit or other charity of choice.
  • Leaving your nonprofit a percentage of their residual estate (the portion of the estate that remains after all gifts have been made and all claims of the estate are satisfied).
  • Naming your nonprofit as a beneficiary of a percentage of a life insurance policy or retirement account.

WHY IT MAKES SENSE: Life happens. Estate values fluctuate depending on current financial needs of donors and/or loved ones. Percentage giving assures donors that their gift will remain proportional to their estate size, no matter how it fluctuates over the years.

Any other donor “scares,” or themes of hesitation you’ve seen in your planned giving travels? How did you address them so that donors felt more comfortable about making their gift—and seeing it for the treat that it really is?


*Source: “America Speaks: Scientific Research Reveals New Targets for Planned Giving”

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