Fundraising, Part 5: Time Always Ripe to Seek Bequests

Bequest giving represents a seriously underappreciated and untapped opportunity for nonprofit fundraising.

That is the view of Bob Hartsook, chairman and CEO of Hartsook Companies, a Kansas City-based fundraising firm.

Eighty-five percent of gifts intended for endowment are generated through death, and 97 percent of realized estate gifts result from simple bequests.

Yet research shows that while over 80 percent of individuals give during their lifetimes, only five percent of people who die leave a bequest to charity, a number that has been flat for over 100 years.

What’s more, Hartsook says, the teaching and training of planned giving focus on structuring the technical “gizmos” of planned gifts, which typically are complex, deferred and involve assets other than cash such as stock or real estate.

Charities’ emphasis, however, should be to “figure out how to get a bequest pledge,” Hartsook says. “You don’t need to know how to do a charitable remainder trust.”

Wills and changes to wills represent the easiest and most common strategy for bequest pledges, and they are “not a complicated vehicle,” he says.

And a “bequest can be given by anyone, not just someone who is wealthy,” he says.

Charitable bequests totaled $22.66 billion in 2008, or seven percent of total giving in the U.S., according to Giving USA 2009, written for Giving USA Foundation by the Center on Philanthropy at Indiana University.

Hartsook cites “Identification, Death and Bequest Giving,” a research paper on bequest giving, at www.legacyleaders.com, published in September 2008 by Adrian Sargeant, the Robert F. Hartsook professor of fundraising at Indiana University, and Jen Shang, an assistant professor at the school.

Funded by Legacy Leaders through a grant to the AFP Research Council, the research by Sargeant and Shang looks at individuals motives’ for giving through bequests, and offers recommendations for fundraisers on targeting their appeals for bequest gifts and tailoring their communications message.

Their research also looks at how donors’ “identification” with charities they support affects their bequest giving.

Among their findings:

• A lot of charity supporters already have made a will, so messages to givers under age 60 targeting bequest gifts should focus on including the charity in their will the next time they change it. And because charities cannot know when that will be done, they should send their bequest messages all the time.
• Givers at all levels, not just major givers, might be willing to make a bequest gift, so bequest messages should be aimed at all supporters.
• Because “self-esteem” is important to givers, charities will have better results asking for bequest gifts for a specific purpose “because of the real and tangible difference” the givers can make.
• Charities should send the message that “every bequest they receive will have a real impact on the nature of their work.”
• Taxes are not a motive for leaving a charitable bequest to a particular nonprofit, although taxes can be a reason to open talks with a giver. The best approach would be to focus on the extra benefit the giver could provide to the particular charity through a gift that would reduce their taxes.
• Messages promoting bequest gifts should focus on the continuing impact of the gift on the charitable cause.
• Bequest appeals should be inspirational and focus on the charity’s “realistic future needs.”
• Individuals invited to make a bequest pledge are 17 percent more likely to make one, according to one study. Yet only 25 percent of givers making a bequest pledge say charities treat them differently after they make their pledge. So charities should prompt individuals to consider a bequest, and should develop a separate “standard of care” for givers who make a positive response.
• Prompting a bequest should be “an integral part of every journey” a charity plans for all categories of givers.

The research by Sargeant and Shang also addresses the fact that bequests, or the failure to make them, often depend on the way individuals view death.

When they view death with anxiety, the effectiveness of a prompt for a bequest depends on the way the individuals identify themselves with a charity or a stakeholder or social group, Sargeant and Shang say.

Because organizations have an “enduring nature,” compared to a stakeholder or social group, a bequest message that identifies the giver with the organization rather than with a stakeholder or social group will be more effective in securing a bequest gift or pledge.

The bottom line is that charities can be a lot smarter about bequest fundraising.

Anyone, regardless of how much or little wealth they have, can give through a simple bequest, yet bequests account for only a sliver of overall giving, and offer only a hint of the level to which overall giving could grow.

So charities should ask all their supporters to consider bequests.

They also should shape their bequest messages to reflect what research shows about the concerns of bequest givers, and develop strategies for working with individuals who show they are interested in bequest giving.

Charities, in short, can make a big improvement in their fundraising by working harder to help their supporters see the impact that making a bequest can have on their own legacy, their family and causes they care about.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

Read more stories by Todd Cohen.