Endowment programs have nearly always taken a back seat in non-profit organization fundraising programs, and the economic squeeze of the last decade adding to the urgency of annual funding for current programs has pushed conscious efforts to secure deferred and estate gifts further out of view.
Regardless of the size of your organization—be it big or small, if intentional cultivation of planned gifts isn’t part of your on-going fundraising strategy, you’re setting up your organization for perpetual financial struggle.
It has been suggested that as much as 50% of future contributions to non-profits may come from gifts planned years before (Greenfield, 1999). Few organizations can afford to pass on this financial support, and none would want to.
There are many reasons to improve your endowment program now. Here are three:
- You don’t have to be an estate tax specialist.
In our current philanthropic climate, it’s possible that securing estate gifts has never been both easier and more complicated at the same time. Access to information and education for potential donors has never been more plentiful while the host of charitable vehicles and ever-changing tax codes can intimidate even the most seasoned gift officers.
The good news is that there are financial advisors and tax specialists available to help when a donor is ready to make such a gift. In fact, we strongly recommend gift officers direct potential planned gift donors to seek out third-party financial and tax advisors to ensure gifts made to the organization are in the interest of the donor, and avoid the perception of coercion or other impropriety. Establish organizational policies and procedures to receive these gifts, and leave the gifting technicalities to the estate professionals.
- For some donors, giving later may be easier than giving now.
Donors who are conscientious about economic uncertainty, or who are anticipating financial transitions (i.e., college-bound kids, a pending retirement, a future inheritance), may have limited resources today, but can more easily support the organizations they care about as part of their estate. Even a small percentage of an estate can have a significant impact on your organization and create a legacy for the giver.
Raising awareness among your faithful supporters that your organization is prepared to receive and manage deferred gifts instills confidence in donors that their donations will have an impact for years to come.
- Despite immediate financial pressures, the organizational mission is about the long-view.
For donors and organizational staff alike, it’s common to feel the pressure of immediate needs around budgets, facility maintenance and program funding shortfalls. Deferred and estate gifts help transition responses from reactive to proactive—a healthier and more productive way to carry out the organizational mission.
Endowments create financial resources for those same needs in the years to come, while also inspiring supporters, board members and employees to think about how needs and mission may develop in the future in response to cultural and environmental trends.
If your organization has suspended in endowment fundraising efforts for more urgent funding demand, it’s time to reallocate your strategy. Don’t have an endowment program in place? It’s time to start!
For information on how GSB can help to kick-start your planned and deferred giving efforts with a time- and cost-effective plan, contact me at Jennie@gsbfr.com.
Greenfield, J. (1999). Fundraising: Evaluating and Managing the Fund Development Process. 297.