Planned Giving from the Donors Perspective Why do

Planned Giving from the Donor’s Perspective

Why do people give?

Many Adventists Learn Philanthropy from Tithing: Giving God the first tenth of your income

Bring ye the whole tithe into the storehouse, that there may be food in my house, and prove me now herewith, saith Jehovah of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it. Malachi 3: 10 ASV

And all the tithe of the land, whether of the seed of the land, or of the fruit of the tree, is Jehovah's: it is holy unto Jehovah. Leviticus 27: 30 ASV

• This tithe is in recognition that God is the creator and owner of everything and we are merely stewards of what He has given us. • By recognizing that God is the rightful owner of all things we create a culture of giving, helping others

Pleasure In Giving • Biologically we experience pleasure in giving • Some argue this pleasure is why we give • Or is this evidence that God created us to give

Dr. Russel James, professor at Texas Tech University has done considerable amount of study on the question of why people give and what is the best way to motivate them to give

Philanthropy uses family bonding mechanisms • Charitable giving is rewarding (like receiving money) • But uniquely involves oxytocin-rich social attachment brain regions (used in maternal and romantic love) • “Donating to societal causes recruited two types of reward systems: the VTA-striatum mesolimbic network, which also was involved in pure monetary rewards, and the subgenual area, which was specific for donations and plays key roles in social attachment and affiliative reward mechanisms in humans and other animals. ” Moll, et al (2006) PNAS 103(42), p. 156234

Philanthropy uses family bonding mechanisms • When people give, the neuropeptide “oxytocin” – a family bonding hormone – increases

Donor’s give to organizations who they… • Have a strong connection with • Believe in the mission of the organization • Were impacted by and want to give back to • Feel are well run and worthy of their money

It Used to be… • People typically would give to the organization for its general use • Donors felt the organization knew best on how the gift should be used • People still give this way but it is becoming less common

Nowadays… • It has become much more common for donors to put restrictions on how they want their gifts to be used • For example, they may say they want the money to be used for mission work, or to create a scholarship, or to go to a building project

Should we discourage restrictions?

Should we discourage restrictions? • We could be sending a message that the donor’s desires are unimportant • To the donor, giving this gift is very personal and they want to accomplish something meaningful • The donor wants to make an impact

Example • Consider a father giving a gift of $10, 000 to his grown son

Have a Conversation • Discuss how the donor wants their gift to be used • Gain a clear understanding • Ask questions concerning challenges their restriction may cause • If you can not do what they want, clearly state why and present alternatives

Suppose a Donor Wanted to Give your Church $25, 000 with just 2 restrictions…. 1. Must be used to establish a food pantry for the homeless 2. Must be at the church

If the church does not already have a food pantry that means they will have to find…. 1. The space to operate such a ministry 2. A volunteer to organize and maintain the ministry 3. Most likely more money because the $25, 000 will quickly run out

Pay a Visit • First Thank Them! • Explain the Challenges in carrying out the donor’s wishes • Offer Alternatives such as giving the money to an existing ministry (why recreate the wheel? ) • No matter the outcome, thank them again!

What to do with bequests that have restrictions you can’t fulfill…? • Notify the personal representative or trustee of the dilemma you are facing in fulfilling the restriction • Offer alternatives of how you could use the gift • The closer the alternative is to the original intent the easier it will be for the family to give their okay

Come to an agreement that works for everyone… • If the family agrees with an alternative of how the gift will be used at your institution make sure you get something in writing • If your organization and the family cannot come to agreement, thank the family and respectfully return the gift, even offering the name of another charity that may be able to fulfill the donor’s intentions

Find out the Donor’s Priorities • Family • Charity • Recognition • Tax Benefits

For Many Family is the Top Priority • Is there a spouse who needs to be taken care of? • Should the spouse have complete freedom to do whatever they want? • Do they want to bless their children? • Are the children well off and have no need for an inheritance? • Is the donor on a second marriage and are there special concerns?

Help the Family Understand… • Encourage the donor to have a conversation with their family about their plan • Help the children understand why they’ve constructed their plan like they have • Pass on the donor’s values to their children • Demonstrate to the children the importance of having a plan • Show the children the importance of giving to the Lord’s work through your estate

For Some Charity is the Highest Priority • Chances are they will give to more than one charity • It is important to have the Charity’s correct name and address • Encourage the donor to notify the charities so they can have the conversation about any restrictions • Good charities will steward the donor, helping them feel more connected to the mission of the charity

Encourage donors to share their charitable intent • If the donor has children encourage the donor to inform their family of their intent

For Some Recognition is the Highest Priority • They want to be perceived as being charitable and receive the accolades that come along with being a philanthropist • They want to have their name on a building or on a plaque of some kind • Among SDAs this tends to be the exception rather than the norm. • Talking with gift planners from non SDA organizations I’ve been told that this is fairly common.

Some Wish to Remain Anonymous • Many want to be anonymous in their giving and we should honor their wishes • Make sure you have systems in place that will allow you to track their giving, but keep their name from any publications

You Might Think Some are Motivated by Tax Benefits… but you’d be wrong • If you think about it, to get a tax savings you have to give away money first so you still have less money than you started with • The tax benefit reduces the cost of giving money away • It allows you to divert some or all of the taxes you would normally have had to give to the government to the charity of your choice

Planned Giving Can Have a Positive Impact on the Donor’s Financial Well Being… • We owe it to our donors to make sure we are pointing out these opportunities when they arise • Usually the donor has to have a charitable intent before they will consider any planned giving options

Avoidance… • Most people simply want to avoid doing any estate planning • People generally do not want to think about their own death and will take the route that is easiest for them to avoid it

Dr. Russel James Study on Organ Donation Participation Rates

Effectiveness of Opt-in Vs. Opt-out

Because they do not want to think about it…. • Life happens and donors will let many things get in the way • Often the urgent will dictate what gets done at the expense of what is important

We Can Help… • Ask the donor if it is okay to follow up, giving them a specific time next week, next month, or next quarter • When you follow up do not be disappointed if they haven’t done what they said they were going to • Listen to them • Help them with any difficulties they are experiencing • Give them encouragement • Ask them again if it is okay to follow up with them and give them a time • Keep repeating these steps until they tell you to stop calling them

Create a Culture of Giving • It is important to develop a culture of giving, this is when people will feel that it is natural to give to your organization http: //www. bradhuss. com

Systematic Giving • A Culture of Giving begins with people giving to your organization on a regular basis, this is typically from their income. • For the church it is the donor’s tithe and gifts to the church budget, conference and world church • For organizations it might be a gift during the annual giving campaign

Systematic Giving • These are not always big gifts but it establishes a connection between the donor and the donee • These gifts need to acknowledge and the donor thanked • The donor needs feedback from the organization showing that these small gifts are being used wisely and they are making an impact

Major Gifts • Out of the pool of systematic givers there will be a group of people who give larger gifts from their savings • These gifts are typically for specific projects such as: • A capital project (building, purchasing of durable goods, establishing new programs) • Endowment funds (scholarships, annual funding of a program, etc. )

Major Gift Donors Typically • Care about the organization much more • More engaged with the organization • Need to be kept better informed • Be asked for the gift, they typically will not give the gift without being asked

Planned Giving • At the top of the pyramid are the planned gifts • These donors care very much about the organization • Will typically have been giving to the organization for many, years

Stewarding Planned Giving Donors • When the donor notifies the organization of their intent they should be stewarded in a way that is pleasing to the donor • Ask if it is okay to include them on certain mailing lists • Ask if it is okay to call on them from time to keep them informed of what is happening at the organization

Don’t Assume • It is important to find out what the donor is thinking and what their beliefs are • You should not assume that they feel or believe the same things you do • They may not be Seventh-day Adventist • They may not want to give money to support the Lord’s work • But they may be interested in helping the homeless, or promoting good health, or financial responsibility, or some other initiative your organization engages in

Don’t Judge • Do not to judge the person for their beliefs • Avoid sharing your own beliefs, you are there for them, they are not there to hear your opinion

Keep the Spotlight on the Donor • Our job is to assist the donor so the donor may assist the organization. The donor comes first!