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Planned Giving's Effect on Annual Fund and Beyond

“Oh no, I don’t think we should solicit our donors for a planned gift. That could stop them from making a gift to the annual fund, and you know that could really hurt us this year.”


Or, perhaps this gem:


“We just have so much annual fund work to get done, I don’t think it’s the best use of our time to talk about planned giving with our donors.”


We’ve all heard those before, haven’t we? And perhaps it was from an incredibly well-intentioned, and yet under-informed volunteer on your development committee. Or maybe it was from, dare we say it, a fellow development professional who is primed to learn something new about planned giving.


The idea of philanthropic cannibalization is not new in the world of philanthropy. And although it sometimes can exist for varying causes, it remains a relatively low-risk factor in a well-run development program.


Planned giving all too-often falls to the bottom of an organization’s development priority list, and yet its benefits are apparent and empowering.


Research tells us that a planned giving program is likely to positively affect your annual fund and other areas of philanthropy at the institution as well. Donor tendencies to make annual, inflation-adjusted gifts of greater than $1,000 rose from 51% (prior to making a planned gift) up 10 points to 61% after making the planned gift. Among substantial research available, a study by Russell James at Texas Tech University shows that engaging a donor in planned giving increases the chances of their supporting your annual fund, as opposed to the contrary.


Further, most development programs are under-resourced: not enough staff, not enough budget, and certainly not enough time. And thus, we’re often focusing on the ROI, and for good reason.


Research shows that the return on investment from planned giving (i.e., estate gifts) outshines special events, direct-mail, standard annual fund initiatives and even major gift work. Of course, we’re not saying that special events and those lower ROI strategies aren’t important and don’t play a vital role in a comprehensive development strategy. They certainly are part of a healthy development strategy. In fact, mining our prospects from a healthy annual giving program is one of the best places to start your search for those early planned giving conversations.


No matter whether your organization is in the early stages of planned giving activity, or if you’re well on your way but needing a boost, consider allocating one (additional) hour of your work week to planned giving for these next three months.


Tell us what you achieve. We’re eager to hear!


Michael Pettry

Cape Fletcher Associates


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