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The quest for donor support from an aging population
October 14, 2003
By Louise Chatterton Luchuk

As fertility rates continue to decline and life expectancy rises, the reality is that the world's population will age faster in the next 50 years than the previous 50. The 2001 Canadian census told us that seniors aged 65+ accounted for 13% of our country's population, and projections indicate this proportion will reach 15% by 2011 (largely because of our aging baby boomer generation). A previous CharityVillage.com Cover Story explored the human resource implications for nonprofit organizations when baby boomers begin to retire. But how does this play out on the fundraising stage? What does an aging donor base mean for fundraising professionals?
Building loyalty and encouraging planned gifts

Most fundraisers cite two key fundraising challenges that emerge with an aging population: how to cultivate donor loyalty and how to encourage planned giving.

Leave A Legacy (LAL) campaigns have sprouted up across the country during the past several years. At their heart, they are grassroots public awareness campaigns by charities to promote planned giving locally. Many of the campaigns target both the general public and allied professionals -- the lawyers, accountants, and financial advisors who often can help influence their clients' planned giving decisions.

The LAL campaigns have much to tout; recent tax changes, such as more favourable treatment of capital gains taxes on gifts of capital property, have made tax-effective planned giving options more attractive to some donors. As many surveys have shown though, tax incentives aren't the magic key to most donors' hearts.

Relationship building is still the real key

"I absolutely agree that cultivating donor loyalty and encouraging planned giving are going to be paramount with an aging population," says Cynthia Armour of Elderstone Resource Development, based near Peterborough, ON. Having said that, Armour strongly believes that regardless of a donor's age or stage in life, relationship building is at the heart of development work. Most donors don't give to organizations that are strangers. So in that sense, she acknowledges, fundraising practices do not need to change because of an aging population.

While larger organizations are more likely to have development professionals on staff, Armour points out that smaller organizations in smaller communities often have the advantage of knowing their community in a more personal way. She encourages organizations to use their mission statement as a 30-second commercial and board members to act as ambassadors to take that message into the community.

Beryl Publicover, manager of planned and major gifts for the IWK Health Care Foundation in Halifax, Nova Scotia (and also Nova Scotia's Leave a Legacy Round Table co-chair) agrees. "Building relationships with donors has become more important to our overall approach to fundraising." She adds, "we tend to think that it is only the responsibility of the fundraisers to build the relationships but it is important for all staff to recognize and value donors as well as board members and those people who benefit from funds raised." For this reason, a board member or staff person from the health centre makes a yearly thank you phone call to each donor. The phone call is about developing the relationship between donor and health centre and no gift solicitation takes place.

Going beyond just the donor to build loyalty
From the LAL perspective, as well as from her work at the hospital foundation, Publicover sees a strong need to build relationships with allied professionals (such as lawyers and financial advisors). "If we educate them about the opportunities and advantages available to their clients through charitable giving, major gifts and planned gifts, these professionals will assist us in our work because they are close to their clients and know their potential to contribute."

For Vincent Duckworth, president of the Edmonton and area chapter of the Association of Fundraising Professionals (AFP), relationship building begins long before a donor even begins to think about giving. Duckworth is the executive director of development and alumni relations at the University of Alberta's Faculty of Medicine and Dentistry and he knows the importance of treating students and alumni well because they are future donors. In terms of the aging of our population he sees a huge opportunity for relationship building. "Baby boomers represent the 'largest bump in the python' and they generally are at a point in their life where they have more available money. We are approaching one of the largest transfers of intergenerational wealth that we have ever experienced." The challenge within this opportunity, points out Duckworth, is in understanding how to make philanthropy look attractive to the baby boomer demographic.

Organizations are taking charge of relationship building with donors and the other peripheral players. The Canadian government has taken some steps in encouraging the generosity of Canadians through tax measures but it is a slow process. Do tax credits make a difference? According to the 2000 National Survey of Giving, Volunteering and Participating, 45% of all donors indicated that they, or someone else in their household, intended to claim a tax credit for charitable donations and almost half of all donors indicated that they would contribute more if governments offered them a better tax credit. While tax credits appear to offer some incentive, most fundraisers today are still rightly focusing their efforts on building strong bonds with donors that will last for years.

Louise Chatterton Luchuk is a freelance writer and consultant who combines her love of writing with experience at the local, provincial and national levels of volunteer-involving organizations. For more information, visit www.luchuk.com.