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Asking the Right Questions: The Mysteries and Metrics of Planned Giving Programs. Kathryn W. Miree Kathryn W. Miree & Associates, Inc. The Premise. Charity CEOs, COOs, and CFOs may find planned giving mysterious and elusive Metrics allow managers to:

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asking the right questions the mysteries and metrics of planned giving programs

Asking the Right Questions: The Mysteries and Metrics of Planned Giving Programs

Kathryn W. Miree

Kathryn W. Miree & Associates, Inc.

the premise
The Premise
  • Charity CEOs, COOs, and CFOs may find planned giving mysterious and elusive
  • Metrics allow managers to:
    • Put planned giving programs into perspective
    • Measure growth
    • See warning signals when the program is lagging
the premise3
The Premise
  • In this session we’ll discuss:
    • The role of planned giving in building donor commitment, organizational revenue, and development success
    • Program structure
    • Infrastructure necessary for success
    • Measuring the opportunity
    • Key reports and metrics
    • Best practices in the field
the revenue opportunities5
The Revenue Opportunities
  • Revenue is the central measure of success for every fundraising activity
  • Planned giving can’t be measure solely by annual revenue – especially in the early years
  • Yet, the donor’s last gift is critical in perpetuating charitable mission
giving usa 2007
Giving USA 2007

Corporations

$12.72

Foundations

$36.5

Individuals

$222.89

Bequests

$22.91

Total: $295.02 Billion

boston college social welfare institute
Boston College Social Welfare Institute
  • Intergenerational transfer of wealth from 1998-2052
  • $41-$136 trillion in total dollars
  • $6-$25 trillion in gifts to charity
  • Interesting observations on giving attitudes and practices of wealthy
center on philanthropy at iu bequest study
Center on Philanthropy at IU Bequest Study
  • Report in March 2007
  • Combined high net worth with surveys in Indiana, St. Louis, Memphis
  • Goal to identify potential bequest donors, and donor motivation
  • 48.4% had a will
    • FindLaw 44.4% (2002)
    • NCPG 42% (2000)
bank of america high net worth philanthropy study
Bank of America High Net Worth Philanthropy Study
  • 2006 Study
  • Focused on philanthropic profile, motivations and goals of high net worth individuals (income >$200,000, assets >$1 million)
  • 3.1% of all U. S. households
  • 98% of group made gift to charity in 2005
the importance of planned giving to nonprofit development programs

The Importance of Planned Giving to Nonprofit Development Programs

The Internal Case for Support

diversification of revenue where does your charity stand
Diversification of Revenue – Where Does Your Charity Stand?
  • Individuals
  • Corporations
  • Foundations
  • Government grants
  • Special events
  • Direct mail
  • Bequest/deferred gift revenue
  • Endowment/investment income
  • Other?
expanding options for donors
Expanding Options for Donors
  • Meeting donors where they are
  • Current gifts – cash or non-cash assets
  • Gifts that pay income
  • Deferred gifts
  • Options
  • Combinations
leveraging donor relationships
Leveraging Donor Relationships
  • You invest time and money in establishing donor relationships – why not maximize?
  • Will strengthen – not diminish – annual giving (unless you tell them otherwise)
building permanent revenue streams
Building Permanent Revenue Streams
  • You will lose donors to mortality eventually – how will you replace?
  • The larger the donor, the greater the impact
  • Permanent streams allow long-term planning
  • Will increase revenue at a higher rate than focusing solely on annual giving
planned giving management hurdles

Planned Giving Management Hurdles

The Most Common Obstacles to Success

the process
The Process
  • 80-85% of planned gifts are revocable – for new and established programs
  • Therefore, negative images come to mind:
    • Chasing the dead – ghoulish! – difficult to discuss
    • Commitments are revocable – what’s the point?
    • Gift commitments are vague – donors don’t provide details – therefore, results difficult to analyze
lack of control
Lack of Control
  • Can’t control the cash flow
  • Donors seem to want control – we want it all to be unrestricted
  • Those pesky, secretive advisors won’t tell us what they know
the cost
The Cost
  • Head count
  • Data management
  • Marketing (including Internet)
  • Travel and entertainment
dashed dreams
Dashed Dreams
  • Show me the money (What do you mean there may not be money for 7-10 years?)
  • Mega gift focus
  • Campaign nightmare – when can we spend the money?
the temptation to shut down the program
The Temptation to Shut Down the Program
  • Not impressed by the pipeline (or there is no pipeline)
  • Reduce the program
  • Eliminate the program
fear of liability
Fear of Liability
  • Assets
  • Compliance
  • Lawsuits
    • Robertson Family
    • Barnes Foundation
    • Maddox Foundation
the key elements
The Key Elements
  • Gift acceptance policies and procedures
  • Donor management policies
    • Data input standards
    • Limitations on who makes changes
    • Staff to oversee – ensure quality
    • Great software that tracks the details
    • Broad reporting options
the key elements38
The Key Elements
  • Counting and valuation policies
  • Endowment and endowment policies
    • The role and purpose
    • Parameters for new funds
    • Administration parameters
    • Donor stewardship
    • Spending policy
    • Investment policies
what you should assess annually
What You Should Assess Annually
  • Growth rate of annual gift donors
  • Donor ages
  • Donor retention rate
  • Number of multi-year donors at the 5, 7, 10 year levels
  • Growth of major gift donors
  • Annual calls on donors
    • Single?
    • Team?
    • Volunteers?
what you should assess annually41
What You Should Assess Annually
  • Annual receipts
    • Estates (may come in over several years)
    • Types of gifts
    • Known/unknown
    • Size
  • Average gift size
    • Compared to largest annual gift
    • Compared to years of giving
non financial metrics
Non-Financial Metrics
  • The number of Legacy Society members Growth in new Society members
  • Repeat gifts from Society members
  • Calls made (stewardship, cultivation, solicitation)
  • Major gift calls with legacy idea
  • Planned giving proposals
  • Gift commitments
  • Training events
  • Marketing articles or asks
financial metrics
Financial Metrics
  • Annual deferred gift revenue by type
  • Year over year analysis of planned gift revenue to identify trends
  • Annual giving rates of increase for donors with deferred gift commitments
  • Consistency in giving rates for donors with deferred gift commitments
annual program health
Annual Program Health
  • Planned gift pipeline
  • Marketing response rates
  • Year over year revenue trends
ten things
Ten Things
  • Understand and embrace the internal case for planned giving
  • Use the right metrics to measure opportunity and success
  • Use accounting codes that track results
  • Oversee trust and estate management to maximize returns to charity
ten things47
Ten Things
  • Ensure the planned gift (endowment) investment team works with the planned giving team to appropriately invest deferred gift assets and communicate results
  • Make a regular review of policies affecting planned gifts
  • Remove internal, staff roadblocks to planned giving success
ten things48
Ten Things
  • Ensure regular reporting on planned giving at the board and staff levels.
  • Allow planned gift officers access to board members.
  • Take part in donor cultivation, stewardship, and solicitation
    • 5 calls
    • Call
    • Attend thank you events
final thoughts
Final Thoughts
  • Success is not serendipitous
    • Planning
    • Preparation
    • Placing value on donor relationship
  • Use these metrics and keys to success
  • Support from the top is essential and will lead to success