Generating the Ultimate
Gift of a Lifetime
Who, When, What, How & How Long
Washington Atlanta Memphis San Francisco
Objectives
• Who Makes Planned Gifts?
• When Key Decisions Are Made
• How to Raise the Topic?
• What Types of Marketing Work?
• Identify Timeframe Involved
2
Sharpe Experience
• Planned Giving Focus Since 1963
• Sharpe Coined Term: “Planned Giving”
3
4
Sharpe Experience
• Planned Giving Focus Since 1963
• Sharpe Coined Term: “Planned Giving”
• Served15,000 Charities
• Consulting
• Teaching, Training, Seminars
• Donor-Centered Marketing
• Publications, Websites, Etc.
6
John Jensen Experience
• Sharpe Group Senior VP & Consultant
• 30+ Years in Planned Giving
• Gift Planning Consultant
• Certified Financial Planner
• Focus:
• Groups Creating Own Constituency
• Specialty: National & Direct Mail Groups
7
Sources of Information
• 50 Years of Sharpe Proprietary Studies
& Pragmatic Experience
• Planned Giving Audits & Assessments
• Review of Tens of Thousands of Estates
• American Council on Gift Annuities
• Dr. Russell James, Texas Tech U
• Health & Retirement Study 2006
8
Births in America
for Period 1913-1993
5,000,000
90
70
4,500,000
4,000,000
3,500,000
Silent Generation
Number of Births
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91
Year of Birth
Baby Boomers?
• Not a Key Target for Bequests
•
•
•
•
Currently Age 51-69
Oldest Just Entering Estate Planning Phase
Few Will Die in Next 15 Years
Not Yet at Right Stage for Testamentary Gifts
• Key Message: Forget About Them
• For Now
10
Donors Ages in 2007
Compared To Birth Rates in America
Age in 2007
98 95 92 89 86 83 80 77 74 71 68 65 62 59 56 53 50 47 44 41 38 35 32 29
4,500,000
1,562
Black Line
# of Persons
Born in US
Each Year
4,000,000
1,302
3,500,000
Number of Donors
2,500,000
`
781
2,000,000
Persons Born in America
3,000,000
1,042
1,500,000
521
1,000,000
260
Blue Bars
# of Donors
In Each Year
500,000
0
0
9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78
Date of Birth
Donors by Age
Births in America
AFC
Numbers of Persons Alive
Age
99 97 95 93 91 89 87 85 83 81 79 77 75 73 71 69 67 65 63 61 59 57 55 53 51 49 47 45 43 41 39 37 35 33 31 29 27
5,000,000
5000000
G. I.
Generation
Baby
Boomers
Silent
Generation
Gen X
Gen Y
4,500,000
4500000
4,000,000
4000000
Persons Alive
Persons Born
3,500,000
3500000
3,000,000
3000000
2,500,000
2500000
2,000,000
2000000
1,500,000
1500000
1,000,000
1000000
500,000
500000
0
0
13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85
Year of Birth
Age Distribution of Donors
With 24 Month Recency
Age in 2008
99 96 93 90 87 84 81 78 75 72 69 66 63 60 57 54 51 48 45 42 39 36 33 30 27 24 21
4,500,000
34,000
Donors Born Each Year
Births in America
32,000
4,000,000
30,000
28,000
3,500,000
26,000
24,000
3,000,000
20,000
18,000
`
2,500,000
16,000
2,000,000
14,000
12,000
1,500,000
10,000
8,000
1,000,000
6,000
4,000
500,000
2,000
0
0
9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87
Date of Birth
Persons Born in America
Number of Donors
22,000
Age Distribution of Current ICMC Donors
Age in 2013
103100 97 94 91 88 85 82 79 76 73 70 67 64 61 58 55 52 49 46 43 40 37 34 31 28 25
Catholic
Organization
600
4,500,000
Donors Born Each Year
Births in America
4,000,000
500
3,500,000
3,000,000
Number
2,500,000
300
`
2,000,000
200
1,500,000
1,000,000
100
500,000
0
0
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88
Year of Birth
Persons Born in America
400
CRS 36 Month Donors Compared
To Number of Persons Born
Age in 2013
10310097 94 91 88 85 82 79 76 73 70 67 64 61 58 55 52 49 46 43 40 37 34 31 28 25
10,000
Catholic
Organization
4,500,000
Donors Born Each Year
Births in America
9,000
4,000,000
8,000
3,500,000
7,000
Number of Donors
6,000
2,500,000
`
5,000
2,000,000
4,000
1,500,000
3,000
1,000,000
2,000
500,000
1,000
0
0
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88
Year of Birth
Persons Born in America
3,000,000
Extension 36 Month Recency Donors
Compared To Number of Persons Born
Age in 2012
102 98 94 90 86 82 78 74 70 66 62 58 54 50 46 42 38 34 30 26 22
900
Number of Donors
Births in America
800
4,000,000
700
3,500,000
600
3,000,000
500
2,500,000
`
400
2,000,000
300
1,500,000
200
1,000,000
100
500,000
0
0
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88
Year of Birth
Persons Born in America
Catholic
Organization
4,500,000
Donors Born Each Year
How Do You Compare?
• Planned Gifts: 10-12% of Total Giving
• Can Be 25-40% for Many w/ Older Files
• 40-60% of NET Revenue Not Uncommon
• Bequests Typically 80% of Planned Gifts
• Investment Needed?
• 10-12% of Reasonable Potential
17
Who Makes Bequests?
• 6-9% Make Charitable Bequests
• Women More Than Men
• 70-75% of Bequests & Testamentary Gifts
• Women Still Live Longer Than Men
• For Now….But Studies Suggest This Is Changing
• Most Are Smaller Donors
18
Bequests by Women
Bequests by Men
Gender Amount
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
18,001,414
3,657,300
3,109,349
2,101,549
1,867,153
1,257,800
1,185,000
857,309
838,647
838,096
801,844
685,397
611,139
574,678
153,634
140,500
140,000
72,321
67,825
50,000
50,000
49,538
Cumulative
Current Gifts
$
4,000
$
$
$
$
$
$
$
1,585
150
160
100
465,525
50
900
$
$
$
202,235
25,000
3,150
$
800
$
$
$
730
250,973
90
Cumulative
Current Gifts
Gender Amount
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
f
19
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
7,674,736
5,409,765
4,360,532
3,375,503
3,174,256
2,444,867
2,297,685
2,093,475
1,965,590
1,484,406
1,135,000
1,131,411
1,114,059
920,868
871,616
829,765
600,843
600,000
545,000
500,000
216,000
187,141
175,000
160,000
134,400
131,454
129,676
100,936
89,000
87,103
81,472
75,000
57,000
55,529
51,877
50,000
50,000
49,538
48,000
42,522
$
2,085
$
$
$
$
1,700
13,600
25
388,805
$
$
7,680
1,200
$
$
$
470
60
73
$
6,850
$
$
750
1,260
$
$
1,425
8
$
$
$
759
9
100
$
180
$
$
$
$
$
76
715
1,675
70
60
Children & Marital Status
• Childless Donors Top Priority
• “Miss” Donors: 50% Probability
• Vs. 6-9% of All Adults
• Nontraditional Childless Families
20
Percentage of AAUW Members Who Use "Miss" Title By Age
4.0%
3.5%
Gloria Steinem is 79. I have hypothesized for a long time that the
"Miss" line coincides with feminism movement and that women
older than Gloria Steinem use it. Looks like if AAUW doesn't prove
that, nothing will.
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
0.0%
95 94 93 92 91 90 89 88 87 86 85 84 83 82 81 80 79 78 77 76 75 74 73 72 71 70 69 68 67 66 65 64 63 62 61 60 59 58 57 56 55 54 53 52 51 50
Percentage of AAUW Members Who
Use "Miss" Salutation By Age
5.50%
5.00%
4.50%
4.00%
3.50%
3.00%
x̀`
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
90
88
86
84
82
80
78
76
74
72 70 68
Age of Member
66
64
62
60
58
56
54
52
50
Who Is More Apt to
Leave a Bequest?
• Older, Long-Time Female Donor Who
Regular Volunteers Making Substantial
& Frequent Gifts With Grandchildren…
OR
• Older Female Doesn’t Give to Charity,
Does Not Volunteer & Has No Children.
23
Interesting Tidbits
• 90% Will NOT Tell You Prior to Death
• Even Colleges Rarely Know More Than 25%
• Fewer Still Share Expected Gift Size
• Bequest Donors Live Longer
• Most Make Estate Gifts to 6-7 Charities
• Direct-Mail-Based Charities: 9-20 Gifts
• Why? No Personal Contact?
24
Interesting Tidbits
• 80% of Bequest $$$ From Age 80+
• Older Donors Make Larger Estate Gifts
• Trust Gifts Better Than Wills
• More Apt to Come Through
• Tend to Generate Larger Gifts
• Including Simple Revocable Living Trusts
• Residuary Gifts 7-15x Larger
25
Longevity & Frequency
• Longer Term Donors: Great Prospects
• Frequent Donors: Great Prospects
• Lifetime Gift Frequency Strong Indicator
• Also: Late in Life 1st-Time Donors
• Some Indication of Higher Probability
• Last 5 Yrs: Most Key Decisions
26
Bequests From “Non-Donors”
• Very Common
• Little Lifetime, Big Gifts at Death
• or Choose a Charity New to Them
• 20% +/- Of Bequests From
Non-Donors
• Occurs at Virtually All Charities
27
Timing of Final Decisions?
• Overwhelmingly After Age 65-70
• Serious Estate Planning Not Done Early
• Decisions Made Within 5 Yrs. of Death
• Decisions Made By Young Don’t Stick
• Understanding Timing of Final Will Key
28
83% > 70
50% > 82
Time From
Final &
Operative Will
to Death
31
Is It Too Late
To Ask For
Bequests?
Years From Execution of Will Until Death
Catholic
“Deathbed”
Charity
32
31
30
29
28
27
26
25
24
23
22
21
20
Number of Estates
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Years From Making Bequest Until Death
Years From Will Until
Death for Extension Estates
Years From Execution of Will Until
Death for 8,635 Estates
21
1200
20
19
1100
18
1000
Catholic
Group
17
16
900
15
14
800
Number of Estates
Number of Estates
13
700
600
500
12
11
10
9
8
7
400
6
5
300
4
200
3
2
100
1
0
0
0
1
2
3
4
5
6
7
8
0
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 >20
Years From Executing Will Until Death
Years From Making Bequest Until Death
34
Last Gift to
Death
35
Donor Age at Death?
• Age 83-85 Typical for Most Charities
• Getting Older
• More Final Wills Signed After Age 85
• Passing Away 3-4 Years Later
• Most Common Age of Death: Early 90s
• More Die in 90s Than in 70s
36
Age 90
Age 80
Bequest Donor Age Death
Charity X
90+
80-89
70-79
Under 70
Total
795
849
344
213
2,201
38
36%
39%
16%
10%
100%
Charity Y: Age At Death
38% Of Estate Gifts From Those Age 95+
Bequest Age At
Death
Number
Percentage
Under 70
6
11%
70-74
0
0%
75-79
80-84
5
5
9%
9%
85-89
90-95
95-99
10
8
15
18%
15%
27%
100+
Total
6
55
11%
100%
39
Charitable Federal Estate Tax Returns
by Age at Death
Under 50
50 thru 59
60 thru 69
70 thru 79
80 thru 89
90 +
40
Time From Will to Last Gift
• Do Bequest Donors Stop Giving After
Putting ABC in Will?
• What Happens After They Sign the
Final & Operative Will?
41
Years From Execution of Will To Last Gift For
AFSC Bequest Donors
35
34
Religious
Group
33
32
31
30
29
28
27
26
25
24
23
22
Number of Estates
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
-15+ -14 -13 -12 -11 -10 -9
-8
-7
-6
-5 -4 -3 -2 -1 0
1
Years From Will To Last Gift
2
3
4
5
6
7
8
9
10+
Catholic
Group
Age at Last
Gift
44
Catholic
Group
Religious
Group
When Are Estate Gift
Decisions Made?
• 4-5 Year Prior to Death
• Most Frequent Point to Sign Final Will:
• 1 Year Prior to Death
• Year of Death
• 2 Years Prior to Death
47
Who Is Most
Appropriate for
What Type of
Gift?
48
AGE AND WEALTH-BASED MATRIX ©
Sharpe Gift Planning Matrix
MIDDLE-AGED
YOUNGER
A1
WEALTHY
B1
Gifts of Cash
Appreciated Property
Charitable Lead Trusts
Term of Years Trusts
Life Income Gifts for Others
A2
A3
Gifts of Cash
Appreciated Property
Term of Years Trusts
Charitable Trusts for Life
Pooled Income Fund
B3
Gifts of Cash
Gifts of Cash & Property
Charitable Lead Trusts
Term of Years Trusts
Life Income Gifts for Others
Charitable Trusts for Life
Bequests
Gift Annuities
Life Insurance Beneficiary
Retirement Plan Beneficiary
C2
B2
MODERATE
MEANS
LIMITED
MEANS
C1
Gifts of Cash
Appreciated Property
Charitable Lead Trusts
Term of Years Trusts
Life Income Gifts for Others
Gifts of Cash
OLDER
Gifts of Cash & Property
Bequests
Charitable Trusts for Life
Term of Years Trusts
Pooled Income Funds
Gift Annuities
Life Insurance Beneficiary
Retirement Plan Beneficiary
C3
Gifts of Cash
Gifts of Cash
Bequests
Gift Annuities
Life Insurance Beneficiary
Retirement Plan Beneficiary
X&Y
Boomer
49
Silent G.I.
Key Bequest Decision Points
• Birth (Particularly of Grandchild)
• Death
• Marriage/Remarriage
• Divorce
• Move From One State to Another
• Prior to “Significant” Trip
• Donor Medical Diagnosis
• Medical Diagnosis of Someone Close
50
Charitable Gift Annuities
• Catholic Donors Love CGAs!
• Typical Donor Does 1st CGA At Age 79
• Lives 7-9 Years
• Sweet Spot: 75-85
• Rare & Somewhat Risky Under Age 70
51
First Known Gift Annuities
52
THE FIRST PLANNED GIFT?
(Copied from a memorial plaque in Winchester
Cathedral, Winchester, England)
In 1321, Sir William de Lillebone
surrendered lands at Bransbury, Barton
Stacey, to the Prior and monks, and in
return received a corrody, or annuity,
worth about 10 pounds yearly.
In addition he gave a reliquary chest to
the church of St. Swithun illustrating
both him and his wife -- the monks
agreed in turn to say masses for his soul.
53
Charitable Gift Annuities
• Most Funded With Cash
• The Security of Payments Key
• Most CGA Donors Don’t Need the Payments
• Concerned About Outliving Income, Not Inflation
• Similar Numbers of Men & Women
• More Women Alive After 75
• Higher Proportion of Men Do CGAs
54
Gender of Annuitants
• Why More Men?
• Men Are Living Longer?
Source: Ron Brown 2013 ACGA Survey Report
55
Best CGA Prospects
•
•
•
•
•
•
•
Age 78+, Few Under 70
“Miss” Donors of Right Age
Single & No Children
Those Who Have Done Other CGAs
Concerned About Outliving Income
Security More Important Than Payments
Past CGA Inquiry
56
Value of Terminated CGAs
Source: Ron Brown 2013 ACGA Survey Report
57
CGA
• 70% One Life
• Primarily Funded With Cash
• # of CGA Per Charity: 60
• Typical Religious Charity: 119 CGAs
• Minimum Gift Amount: $10K Or More (71%)
• In 2013, Half From Previous CGA Donors
58
Average CGA Dollar Value
•
Source: Ron Brown 2013 ACGA Survey Report
59
Do CGA Donors Also
Make Bequests?
• 3-5% Based on Sharpe Studies
• Sharpe Believes Reports to the Contrary
Are Incorrect
• CGAs Can Be Bequest Substitutes
• Vast Majority Will Not
60
Planned Giving Timeframe
• 4-5 Years From Investment to
Significant Amount of Spendable Cash
• May Happen Sooner, But Can’t Predict
With Any Certainty
• Assuming Appropriate Constituency
61
How to Raise the Topic
• Don’t Talk About Death
• Talk About Making a Difference
• Talk About What “Mary” Did or Is Doing
• Model Positive Behavior
• Reinforce What Other Donors Are Doing
• Encourage Inquires
• Use Estate Planning Education Focus
62
Marketing: What Works?
• Print vs Electronic
63
64
Marketing: What Works?
• Print vs Electronic
• Dedicated Planned Giving Newsletters
• Focus on Estate Planning Education
• Soft Sell
65
66
Marketing: What Works?
• Print vs Electronic
• Dedicated Planned Giving Newsletters
• Focus on Estate Planning Education
• Soft Sell
• Steady, Consistent Effort
• “Drip Marketing”
• “Remember ABC in Your Will”
67
Marketing: What Works?
• Regular, Periodic Mailings
• Buck Slips
• Recognize at Annual Meetings,
Conferences, Annual Reports
• Messages That Suggest Charitable
Giving Is a Social Norm
70
Share Stories
• Stories Make Donors Come Alive!
• About Living Bequest Expectancies
• Include Photos
• “Join Me” Letters
71
Share Stories
• Stories Make Donors Come Alive!
• About Living Bequest Expectancies
• Include Photos
• “Join Me” Letters
• Use Easy to Understand Terms
• Charitable Lead Annuity Trust vs
“Temporary” Foundation Making Gifts to
Charity, Then to Grandkids Tax Free
73
Design Materials for Seniors
• Avoid
Small Type,
Low Contrast Colors
• Use High Contrast Colors
• Clear, Readable Type
• Avoid Italics, “Interesting” Typefaces
• 13-16 Pt Type for Letters
• No Photo Background Screens
• Write 8-9th-Grade Education Level
74
Design Materials for Seniors
• No Photo Background Screens
• Avoid Reverses
• Beyond Headlines
• Write to 8-9th-Grade Education
Level
75
Marketing Responses
• Responses Modest
• 90% of Gifts Unknown Prior to Death
• Typical Average Bequest: $35-$75,000
• Religious Groups Low
• Direct Mail Groups Higher
• Gifts Known Pre-Death: 2-4 Times Larger
76
Planned Giving NOT
a “Campaign”
• Short-Term Efforts Have Little Impact
• Largely Wasteful
• Key: Be Consistent for 4-5-Year Period
• Donors Plan Estate on Their Schedule
• Not on Your Schedule
• Unlike Other Kinds of Fundraising
77
Bequest Income
in Millions
Bequest income compared with the Planned Giving Budget at one direct mail based charity
Bequest Income Compared With PG Newsletter, Other Spending
35
160
120
25
100
20
80
15
``
60
10
40
5
20
0
0
91
92
93
94
95
96
Bequest Income
97
98
Planned Giving Budget
78
99
0
1
Amount Expended in
Thousands
140
30
Bequest Income Compared With The Planned Giving Budget 5 Years Earlier
At The Same Charity
Bequest
Income in
Millions
Bequest Income Compared With PG Spending
5 Years Previous at Same Charity
35
160
140
120
25
100
20
80
15
``
60
10
40
5
20
0
0
96
97
98
99
0
1
Bequest Income
2
3
Amount Expended 5 Years Earlier
79
4
5
6
Amount Expended in
Thousands
30
Marketing Efforts That
Don’t Work
• Electronic Efforts—if Primary Approach
• Seniors Are Last Adaptors—for Nearly
Everything!
• Less Apt to Be Online
• Much Less Comfortable in This Space
• Probability Drops Close to Final Will
80
Marketing Efforts That
Don’t Work
• Hard Asks
• Pressure Tactics
• Focusing on Younger Donors
• Younger Donors Are Not Ready
• Assuming a Commitment Means Gift Is
“In the Bag”
81
Summary
• Know Your Donor Ages
• Focus on Older Donors
• Watch for Childless Donors
• Gift Decisions Made Late in Life Stick
• Size of Lifetime Gifts Not Important
• Bequests Don’t Hurt Current Giving
82
Summary
• Marketing Must Be Senior Friendly
• Low Pressure Marketing Works Best
• Never Too Late to Ask
• PG Is a Process, Not a Campaign
• Plan on a 5-Year Timeframe
83
Follow us!
www.SHARPEnet.com
@sharpegroup
Find Sharpe Group on
John W. Jensen, CFP
Senior VP & Consultant
5509 N. 10th Street
Arlington, VA 22205
703-534-4363 Office
703-407-2996 Cell
john.jensen@sharpenet.com
www.sharpenet.com
www.SHARPEnet.com
© The Sharpe Group 2015
85
All Rights Reserved