Question from the mailbag: Just thinking about all that lies ahead and thought I would plant this seed with an attorney who handles this kind of thing. We just need one good sized farm to be willed to us and we will have an endowment. I don’t see how we are going to do all this without one. ~ Question from a board member of a new nonprofit organization as the organization discusses its budget needs for current and long-term projects.
Answer: Short answer is – This kind of donor development (waiting for that large bequest from some generous donor’s estate) should have a very limited role in the long-term fundraising model of a nonprofit organization.
Estate Planning and the Big Score
Over the years, I’ve seen a lot of articles and nonprofit training programs about donors and estate planning (including attorney continuing education courses), but have only one time in all my years of estate planning practice had a client ask for suggestions on where to leave a charitable gift. Usually (and especially for large gifts) the potential donor already has a charity in mind, or considers the kids the “favorite charity,” or doesn’t wish to leave anything to charity. Almost always, when I broach the topic of charitable gifts to an estate planning client, I am either brushed off (politely, of course), or the client already has something in mind.
And, strictly speaking anecdotally, when I have seen those “big farm gifts” – and I have seen them several times – it has always been from a donor that is the “last of the line” and has no children or other heirs. Also, at least three times that I can think of off the top of my head, that largesse has been sprinkled about in the community, rather than bestowed upon only one charity.
While attorneys can certainly be helpful in developing the documents – and I’ve offered that service to some of my nonprofit clients – that kind of donation has to start with a heart-string already with the charity in question.
In other words, don’t expect the attorney to do your donor development for you.
Where the Big Score Fits in Donor Development
If your nonprofit board thinks that donor estate planning is an appropriate fund raising tool, a good start would be to have a “wish list” in some sort of eye-catching and easy-to-read form as part of donor development. Something as simple as “Remember [insert your Nonprofit’s name here] in your Estate Plan” as a small by-line in the donor acknowledgment letters (or annual appeal letters) would plant the seed the might result in that “big score.”
Even with wealthy donors, estate planning is the last question you ask, not the first. First, develop the event attender, then the casual donor, then the patron, and only after you have a long-established and solid relationship with a potential “big score donor” should you start a serious discussion about the endowment.
Where the Big Score Fits in Nonprofit Development
From a practical perspective, I’ve always wondered about the “big score” approach to fund-raising. While I agree that it would be a huge benefit to the organization, I’ve always questioned how it fits with the overall fundraising goals of the organization:
(1) That kind of gift is extremely rare, so putting resources toward its pursuit it is a little like playing the lottery
(2) it should be considered to be only one tool (and, in terms of resource allocation, a minor one) in the fund-raising toolbox and
(3) this once-in-a-lifetime gift, while very much like hitting the lottery does not have the “reach” of getting the organization’s name out in the world.
Questions the Nonprofit Board Should Ask About Donor Development and the Big Score
Using estate planning as a donor development angle should be discussed by the Board or the Fundraising team. This should never be a matter of writing a letter to the people on your donor list. It takes a dedicated development of a long-term relationship with a donor and – when the “ask” time comes – it takes someone with the knowledge and skill to both present the idea to the donor and also answer questions about both the bequest and how it will be used.
The nonprofit board needs to decide how – or if – the bequest or endowment element will fit into the overall fundraising plan of the organization:
- What’s the nonprofit’s philosophy on fundraising?
- Would you rather have one donor give a million dollars or a million donors give one dollar?
- How does a nonprofit organization effectively and appropriately reach out to all types of donors to both maximize resource allocation and maximize total “yield” from efforts?
- Where does the “big score” fit into the nonprofit culture?
- What are the variables to consider in allocating resources?