CharityVillage® Research: Planned giving can enhance governments' core support

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Planned giving can enhance governments' core support
November 6, 1995; Canadian FundRaiser

Planned giving has enjoyed a phenomenal five-year growth period in Canada, and in the USA, where it began earlier, growth has continued unabated. In an address to the CAGP Annual Meeting, Frank Minton, co-author with CAGP president Lorna Somers of Planned Giving for Canadians, pointed out that gift planning is much more advanced in Canada and the USA than elsewhere.
People are beginning to realize the limitations on what governments can achieve, Minton said, and charitable institutions are increasingly turning to the private sector. This increased attention and importance, however, is a two-edged sword. "Our fundraising," he reminded the delegates, "can not be seen as simply a replacement for government funds. The core funding must come from government. The role of planned giving is to enhance and expand that core support."
Looking to the future, Minton forecast that demographic trends will increase the role of charitable bequests, whether or not charities take steps to strengthen this area. He reminded the delegates that this situation presents a great opportunity: of the largest estates, only 20% include a charitable bequest. There is going to be a shakeout in the charitable fundraising field, he added, and not all planned giving programs will succeed.
Fortunately, Minton points out that there are a variety of potentially successful approaches to structuring a planned giving program, and every charity does not necessarily need a planned giving specialist on staff in order to mount a successful program:

An ideal model would comprise at least one planned giving specialist and at least one major gift officer.
In another effective scenario, the institution relies on major gifts officers, trained in planned giving, who can call in specialists when necessary for complex gifts.
Other organizations function successfully by retaining a planned giving specialist on a part-time basis.
Increasingly, community foundations are providing planned giving expertise to small charities in their geographic area.

Some form of accreditation needed
The rapidly-increasing number of people entering the field, said Minton, raises the question of quality control. Gift planning, he pointed out, requires humanistic and marketing skills, as well as technical expertise, which has fueled a growing awareness of the need for some form of accreditation. This is the leading issue for the National Council on Planned Giving in the USA. The challenge, however, is complex, because planned giving expertise is easier to recognize than to test. How, for example, can you recognize and measure not only integrity, compassion and judgment, but also technical expertise?
The growing interest of allied professionals - lawyers, accountants, trust officers, insurance agents and financial planners - in the planned giving profession is creating a culture clash. People in the financial services field sometimes promote charitable gifts as tax shelters and investments, an activity Minton sees as short-sighted. People made charitable gifts, he pointed out, for spiritual and psychological reasons long before there were any tax advantages. "Take the long view," he urged the delegates. "Help your donors experience the fulfillment in giving."
Do not, however, turn away from the potential offered by the sophisticated new gift planning vehicles. "Planned giving will become increasingly high-tech," said Minton. "Your donors expect it. Use it." The charitable remainder trust, for example, still in its infancy in Canada, will become second in volume to the bequest (about 50,000 were completed in the USA last year). Canadian authorities are still working out the rules concerning interest rates, capital gains, and other questions, but, said Minton, this new and powerful tool will soon be added to the war-chest of Canadian gift planners. The stripped bond is yet another interesting and attractive instrument that Canadian gift planners, led by organizations such as the United Way, are using with increasing success.
The best way to encourage and sustain the current favourable environment for planned giving, Minton reminded the CAGP delegates, is to maintain the highest ethical standards in your dealings with your donors and your institutions. People are concerned about abuses, he pointed out. Don't give your donors reason to be cynical. Explain everything carefully. Put it all in writing. And ensure that all of your major donors have independent legal advice.
Finally, Minton warned his listeners that as the field matures, they will have to market more creatively. The planned giving `noise' is tremendous, he pointed out. The fundamental step is to define yourself. "Establish a niche, a defining mission that makes people want to give to you. The rest will follow."