Legacy Marketing Pay-Off
A few days ago we published a post called the Secret Millionaire in Your File … all about an "average" donor who — out of the blue — left a seven-figure bequest to her alma mater.
I stress "average" because this was an individual of no obvious wealth, BUT someone who turned out to have a small gift giving history that could have provided clues.
Here’s a brief report from Fraser Green at Canada’s FLA Group that further illustrates two key points about legacy fundraising: a) it pays to cultivate and ask, and b) it pays to target your loyal (i.e., longstanding) donors, not simply the wealthiest ones.
After noting that a majority of Canadian direct mail donors have never been asked for a bequest by a charity they support, the FLA Group report says:
" … we surveyed 32 Canadian charities regarding their experience with bequests. Of the more than 3,000 bequests received by those charities, almost 92% were surprises. In other words, the first they learned of the bequest was when it was received (the donor had not told them about the bequest in advance). We can, therefore, safely say that for every bequest you’re told about in advance, there are 9 more that you won’t know about until they’re received."
I only know enough about planned giving to be dangerous, but that 92% "surprises" figure astounds me. Anyone care to comment on that from your nonprofit’s experience?
The report then offers some case studies to make the point that it helps — believe it or not — to actually cultivate and solicit bequests!
From their experience FLA Group concludes:
"On average, our clients can conservatively expect that if they start with their top 20% of donors (‘top’ defined as loyal and long-term rather than dollar value), 1% will confirm a bequest expectancy within five years of starting the FLA legacy marketing program (that number rises to 2% for monthly donors). And, since our research shows that 1% actually equals 10% (due to the 90% who will never inform you of the gift), the numbers are significant."
I’m impressed. Anyone wish to offer some comparative figures?
Tom
7 responses to “Legacy Marketing Pay-Off”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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For those who haven’t yet read Iceberg Philanthropy, the book on legacy giving by Fraser Green, et. al, it’s well worth it. Also excellent: “Just the Facts on Legacy Giving,” by Mal Warwick, on SOFII: http://www.sofii.org/active%20site/Members%20area/Article15MalW.html
In the last five years, my organization has received at least 10 bequests, with at least half of them coming in without any prior knowledge.
From Bob Bland:
It is a big mistake to equate legacy marketing with bequests. Most bequest will indeed be surprises, but Charitable Gift Annuities and other planned gifts will not be. I doubt Canada has CGAs as such but may have other arrangements for “beyond life time value.” My own estate plans moves most of the estate into a Fidelity Charitable Gift Fund to be distributed by the person I nominate. So I fully expect my annual gifts to continue for some time after I can no longer control the keyboard.
From Tom: See, I told you I knew just enough about planned giving to be dangerous! However, I’m still not prepared to accept that 93% of bequests should be surprises. As Roger points out … there are important clues provided by donor behavior.
The surprising breakthrough can actually be a common occurrence, and there are things we can do to encourage it, immediately. Social psychology is a fountain of knowledge we can draw from.
Tom, great stuff. I’m crazy and passionate about bequests. I’m not surprised that 92% of bequests, according to the Canadian research, appear to fall from the sky.
Why? Simply because most nonprofits take no action to ask their donors for bequests. Many UK and Australian nonprofits with active bequest fundraising approaches are taking control of their bequest fundraising to actively ask and work with their donors to include the charity in their will.
There is also a great report about Help the Aged published in the Wiley Nonprofit marketing journal about them analyzing where their bequest came from, as well as using that knowledge to inform further bequest marketing campaigns. http://www3.interscience.wiley.com/journal/122455326/abstract?CRETRY=1&SRETRY=0
These figures do not surprise me. Through the years I have been tracking similar numbers in the United States, usually hovering between 80-83%.
There are many reasons for this, including an obvious one; we cultivate and steward top-dollar donors more effectively, and ignore our loyal, low-end donors and fail to build personal relationships with these individuals. As a result, they are far less likely to share their commitments with us during their lifetime.
Yes, I know that is an overly-general comment, and that some of these donors hold this information close because the fiscal conservatism that drives this gift type is also closely associated with individual privacy.
Nevertheless, donor behavior provides a clue and a change in stewardship behavior provides at least one viable answer.
Another great article. Thank you.
There’s a little nugget of data that leaps out at me (though it’s in parentheses in the FLA report): that the likelihood of receiving a bequest from our best potential donors DOUBLES if they are monthly donors.
I would be interested in the wisdom of others as to why this might be the case, and whether monthly donors are displaying a different level or type of loyalty. Any thoughts?