The Case For Planned Giving

Research can be a powerful tool to help us work smarter. It’s a shame that we have so little of it in the world of philanthropy. Thus, it was a delight to see the work of Dr. Russell James III that provides a much-needed longitudinal perspective on planned giving in his book American Charitable Bequest Demographics 1992-2012. Ponder some of the things Dr. James points out after reviewing a comprehensive federal study that included personal interviews:  

  • More people 55 and older (10% in 2012 compared to 8.3% in 1998) are including charities in their estate plans. The percentage increase may seem small but I think the shift is significant given that it occurred in only 12 years. My guess is that our various planned giving programs are having an impact. It’s amazing what happens when you ask.
  • The number of people 55 and older with wills is going down (61% in 1998, 51% in 2012) as trusts go up. This oughtn’t to be a surprise given all the advertising being done to encourage people to avoid probate by setting up trusts. Do I really care if my charity receives a gift from a bequest in a will or from a provision in a trust? Seems to me like the money will spend the same and the donor’s intent is accomplished either way.
  • More than 80% of charitable bequests come from donors 80 and older. That doesn’t seem surprising given the increasing longevity of Americans. But here’s what is important: most final charitable plans were made within five years of death. That means you can’t assume the 60 or 70 year old donor who included a bequest in her will for your charity won’t change that will. She probably will. That doesn’t mean your charity will be left out, especially if you practice good stewardship.
  • Those who plan a gift early ultimately leave gifts four times the size of those who plan a gift late. So begin early and steward well.
  • Bequest giving has generally been flat for the last two decades, except for some mega-bequests like Joan Kroc’s. That oughtn’t to be surprising given the increase in trusts whose distributions are more difficult for researchers to capture. And, look out, because here come the baby boomers. It will be another 15 years before they really start hitting their 80’s and having a significant philanthropic impact.

In light of just those nuggets of research data, tell me again why you haven’t gotten around to starting your planned giving program or have underemphasized the one you have? There’s even far more information in Dr. James’ book well worth your review.