Written by Julie Karavan, MS, CFRE

Many of the institutions we serve welcome donors to our Legacy Societies on what is sometimes called an “inclusive” basis. That is, a donor shares that they have included the institution in their estate planning, and the donor is then included in the Legacy Society. Once a donor is a member of a Legacy Society, we have a commitment to stewardship which can often span decades. This relationship, by virtue of both prospect assignment as well as staff turnover, will often include many different development officers throughout the donor’s relationship with your institution.

When you join a new institution, you will likely find Legacy Society members without a booked estate commitment. The gold standard for documenting an estate commitment includes a copy of a legally valid will, a trust document, or a beneficiary designation form for assets like life insurance policies or retirement accounts. However, many institutions will book the gift for advancement purposes using something else in writing; be it a signed form, agreement or memorandum affirming the commitment; a letter or email affirming the commitment from the donor to the institution or even a letter from the institution  to the donor, confirming the institutions understanding of the commitment. Review your institution’s gift acceptance policy to understand what is acceptable for booking for advancement purposes.

For a gift officer to book an estate commitment, the donor must specify the amount they plan to give. Let’s explore tactics for arriving at a dollar amount for estate gifts, highlighting the importance of asset identification, income considerations, and techniques like anchoring, recognition, and designation.

Identifying the Asset

A crucial starting point in determining a dollar amount is identifying the asset your donor wishes to use in making their gift plan. Often, this involves assets that stand outside the scope of a will, such as beneficiary designations on life insurance policies, retirement accounts, or other financial instruments. Understanding which assets, the donor plans to allocate can significantly influence the size of the gift.

For example, a donor might designate a percentage of their retirement account to your organization. In this case, calculating the approximate value of the account can provide a starting point for discussions. Ensuring that the donor has a clear understanding of the financial implications of their choice and the potential tax benefits can be a valuable part of the conversation.

Consideration for Lifetime Income

While donors may be eager to create a lasting legacy, they may hesitate to name an amount if they fear outliving their assets. If a donor expresses interest or concern about lifetime income for themselves or their loved ones, it may be a good time to discuss a charitable gift annuity or trust. These planned gifts can provide donors or their beneficiaries with a stream of income while supporting your institution's mission.

Emphasizing the revocable nature of estate gifts and beneficiary designations is another opportunity to help your donor become comfortable with citing an amount and exploring with you the potential impact of a deferred gift.

Additional Strategies

1.      Anchoring Against Averages: One effective technique is to anchor the donor's gift against the average size of estate gifts received by your organization or in the charitable sector. By providing this benchmark, the donor may become more comfortable citing the expected amount of their deferred gift.

2.      Recognition and Impact Levels: Another approach is to share information about specific recognition or naming opportunities at designated gift levels. When donors understand that a particular gift amount will establish a scholarship in honor of a loved one, fund research which addresses a family concern, or contribute to a significant project which will carry their name, they may be more likely to share the expected amount of their commitment.

3.      Creating Funds with Specific Goals: Encourage donors to consider the impact they wish to achieve with their gift. Share with them a limited number, three to five levels of funding necessary to make a difference in a particular area of your institution's work. By limiting choices and asking donors to align with a level, you can pursue a conversation which encourages your donor to cite a specific level of contribution that aligns with their philanthropic vision.

Securing estate gifts is a vital component of fundraising for many charitable organizations. These transformative gifts can have a lasting impact, but arriving at an articulated dollar amount can be a delicate and nuanced process. While the ABCs of sales is “always be closing;” the ABCs of stewardship is “always be communicating”.  Legacy Society Members require active and ongoing stewardship and communication. Part of this communication can include identifying the amount of their commitment to your institution. Tactics such as anchoring, recognition, and creating funds with specific goals can inspire donors to share their plans with you and the causes you champion.