Initiating The Legacy Conversation
And Getting To The Ask
Planet Philanthropy 2015
June 7-9, 2015
The Hyatt Regency in Jacksonville, Florida
Jonathan Gudema, Esq., Principal, Planned Giving Advisors LLC
What we’ll cover today
 Why Legacy Giving for your organization?
 Who do you need to be initiating conversations with?
 What do you need in place to get started?
 What are the key concepts for legacy conversations?
 How do you prep your prospects?
 How do you start the actual Legacy conversation?
 How do you lead initial conversations to a closed gift?
2
Why Legacy Giving for your organization?
 America is aging
 So is your database!
 Baby boomers are moving into retirement years
 Generation X’ers and Y’ers are not poised to replaced their contribution
dollars
3
The Future of Nonprofits
4
The Future of Nonprofits
“…over-reliance by nonprofits on just “keeping the
lights on” is a short sighted strategy that steadily
erodes the long-term survival of the organization. As
important as annual giving campaigns are in the
fundraising practices of the nonprofit sector,
developing a steady stream of sustained long-term
financial security deserves at least equal – if not the
greater – priority.”
It Matters…But Is It Working?
A White Paper Series on Our Region’s Nonprofit Sector Fiscal Health & Sustainability
The Philadelphia Foundation, July 2010
5
Revenue Potential
Charitable Bequests represent
Since 1971
7.7%
6
Of all U.S.
Fundraising
Revenue Potential
IRS data over 10 years (19871997) showed that
2.7 times
their lifetime
charitable giving
in their estates
7
On average
left
Estate tax payers
who left charitable
bequests
So-Called Giving Life Cycle
Major
Giving
Annual
Giving
8
Capital
Giving
Legacy
Giving
Reality
Annual
Giving or
Major
Giving
9
Legacy
Giving
Why Planned Giving?
Inflation Adjusted U.S. Giving 1972-2013
$ in billions
350
300
What
changed?
250
200
150
100
1972
1977
Inflation adjusted dollars
Source: Giving USA 2014
10
1982
1987
1992
1997
2002
2007
2012
Why Planned Giving?
Individual Giving as a Percentage of Disposable Personal Income
4.0%
3.5%
3.0%
2.5%
2.4%
2.2%
1.9%
2.0%
1.5%
1.0%
0.5%
0.0%
1972
1977
1982
Adjusted for Inflation, in current Dollars
Source: Giving USA 2014
11
1987
1992
1997
2002
2007
2012
Why Planned Giving?
Inflation Adjusted U.S. Giving 1972-2013
$ in billions
350
300
1991
Oldest Boomers Age 45
Youngest Boomers Age 27
2011
Oldest Boomers Age 65
Youngest Boomers Age 47
250
200
150
100
1972
1977
Inflation adjusted dollars
Source: Giving USA 2014
12
1982
1987
1992
1997
2002
2007
2012
Why Planned Giving?
U.S. Non-Farm Employment 1972-2013
in thousands
130,000
110,000
90,000
70,000
Source: U.S. Bureau of Labor Statistics
13
Why Planned Giving?
13.0 % of US Population Over 65 -- 2010
Maine
Washington
Vermont
Minnesota
Montana
North Dakota
Massachuttes
Oregon
Wisconsin
South Dakota
Idaho
Illinois
Kansas
Kentucky
Oklahoma
Arizona
New Mexico
Alaska
8.1%
Texas
Hawaii
Source: U.S. Census Bureau
Virginia
Georgia
Alabama
Louisiana
5.7% - 9%
9.1% - 13%
13.1% - 17%
17%+
New Jersey
Delaware
Maryland
South
Carolina
Arkansas
Mississippi
West
Virginia
North Carolina
Tennessee
California
14
Indiana
Missouri
Rhode Island
Connecticut
Ohio
Nevada
Colorado
Michigan
Iowa
Nebraska
Utah
New York
Pennsylvania
Wyoming
New Hampshire
Florida
17.8%
Why Planned Giving?
14.5% of US Population Over 65 -- 2015
Maine
Washington
Vermont
Minnesota
Montana
North Dakota
Massachuttes
Oregon
Wisconsin
South Dakota
Idaho
Utah
10.1%
Kansas
Indiana
Kentucky
Missouri
Oklahoma
Arizona
New Mexico
Virginia
Georgia
Alabama
Alaska
Texas
Hawaii
Source: U.S. Census Bureau
15
Louisiana
5.7% - 9%
9.1% - 13%
13.1% - 17%
17%+
New Jersey
Delaware
Maryland
South
Carolina
Arkansas
Mississippi
West
Virginia
North Carolina
Tennessee
California
Rhode Island
Connecticut
Ohio
Illinois
Colorado
Michigan
Iowa
Nebraska
Nevada
New York
Pennsylvania
Wyoming
New Hampshire
Florida
19.5%
Why Planned Giving?
16.3% of US Population Over 65 -- 2020
Maine
Washington
Vermont
Minnesota
Montana
North Dakota
Massachuttes
Oregon
Wisconsin
South Dakota
Idaho
Colorado
Kansas
Indiana
Kentucky
Missouri
Oklahoma
Arizona
New Mexico
Virginia
Georgia
Alabama
Alaska
Texas
Hawaii
Source: U.S. Census Bureau
16
Louisiana
5.7% - 9%
9.1% - 13%
13.1% - 17%
17%+
New Jersey
Delaware
Maryland
South
Carolina
Arkansas
Mississippi
West
Virginia
North Carolina
Tennessee
California
Rhode Island
Connecticut
Ohio
Illinois
Utah
11.4%
Michigan
Iowa
Nebraska
Nevada
New York
Pennsylvania
Wyoming
New Hampshire
Florida
21.8%
Why Planned Giving?
18.2% of US Population Over 65 -- 2025
Maine
Washington
Vermont
Minnesota
Montana
North Dakota
Massachuttes
Oregon
Wisconsin
South Dakota
Idaho
Colorado
Kansas
Indiana
Kentucky
Missouri
Oklahoma
Arizona
New Mexico
Virginia
Georgia
Alabama
Alaska
Texas
Hawaii
Source: U.S. Census Bureau
17
Louisiana
5.7% - 9%
9.1% - 13%
13.1% - 17%
17%+
New Jersey
Delaware
Maryland
South
Carolina
Arkansas
Mississippi
West
Virginia
North Carolina
Tennessee
California
Rhode Island
Connecticut
Ohio
Illinois
Utah
12.6%
Michigan
Iowa
Nebraska
Nevada
New York
Pennsylvania
Wyoming
New Hampshire
Florida
24.7%
Why Planned Giving?
19.7% of US Population Over 65 -- 2030
Maine
Washington
Vermont
Minnesota
Montana
North Dakota
Massachuttes
Oregon
Wisconsin
South Dakota
Idaho
Colorado
Kansas
Indiana
Kentucky
Missouri
Oklahoma
Arizona
New Mexico
Virginia
Georgia
Alabama
Alaska
Texas
Hawaii
Source: U.S. Census Bureau
18
Louisiana
5.7% - 9%
9.1% - 13%
13.1% - 17%
17%+
New Jersey
Delaware
Maryland
South
Carolina
Arkansas
Mississippi
West
Virginia
North Carolina
Tennessee
California
Rhode Island
Connecticut
Ohio
Illinois
Utah
13.2%
Michigan
Iowa
Nebraska
Nevada
New York
Pennsylvania
Wyoming
New Hampshire
Florida
27.1%
Why Planned Giving?
Non-Bequest $
$ in billions
Bequest $
450
2011 – Oldest Baby Boomers
reach age 65
400
350
2018 – Oldest Baby Boomers
reach age 72
1996 – Oldest Baby Boomers
reach age 50
300
250
200
150
100
50
0
1990
19
1994
1998
Source: Giving USA
2002
2006
2010
2014
2018
2022
2026
2030
Who do you need to be initiating conversations with?
 Who are most likely to include your nonprofit in their estate plans alongside
family and loved one?
 Long-term givers or volunteers?
 Alumni or beneficiaries of your services?
 Retired staff or local community?
 Who are the people you can identify who have the highest likelihood to go
from supporter/friend to family/legacy?
20
Top Ten Predictors of Charitable Bequests
I.
# years giving
VII. Not married
II.
No offspring
VIII. Last reported giving
III. Highest levels of giving
IX. Growing wealth
IV. Funded living trust
X.
V.
# years volunteering
Female
VI. Last reported wealth
21
Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
Who Leave Charitable Bequests?
Data Confirms that Wealth Ranked Donors Are Strong Prospects
22
% Leaving
Charitable Bequests
Population
Segment
4%-5%
Everyone
10%
Givers of $500 or more annually to charities
20%
Moderately wealthy
passing away with $3.5 million to $10 million
28%
Pretty wealthy
passing away with $10 million to $20 million
40%
Very wealthy
passing away with over $20 million in assets
Sources: IRS Data as reported in Giving USA 2012, Russell N. James III, J.D., PH.D.
Boomers Differ From Their Predecessors
 Think about the differences between those age 68 and younger versus
those just a few years older…
 Women’s liberation movement
 Women started having more successful careers
 Having children later, if at all
 Much higher divorce rates
 Generally smaller families
23
U.S. Pop. Age 55+ Charitable Estates Among
Those With Will or Trust by Family Status
55%
50%
45%
40%
Grandchildren
35%
Children only
30%
No Offspring (unmarried)
No Offspring (married)
25%
20%
15%
10%
5%
1998
2000
2002
2004
2006
2008
2010
2012p
Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
U.S. Childlessness Rates Women Ages 40-44
21.0%
20.4%
19.0%
19.0%
17.5%
17.0%
16.0%
15.0%
13.0%
11.4%
11.0%
9.0%
10.2%
10.1%
8.6%
7.0%
1970
1975
1980
1985
1990
1995
2000
2005
Current Ages: (85-89) (80-84) (75-80) (70-74) (65-69) (60-64) (55-59) (50-54)
25
Source: U.S. Census Bureau/U.S. Bureau of Labor Statistics
Birth Year:
26
2,300,000
1928 (age 87)
1926 (age 89)
1924 (age 91)
1922 (age 93)
Today’s PG $
Source: U.S. Census Bureau/U.S. Bureau of Labor Statistics
1950 (age 65)
1948 (age 67)
1946 (age 69)
1944 (age 71)
1942 (age 73)
Today’s PG
Prospects!
1968 (age 47)
1966 (age 49)
1964 (age 51)
1962 (age 53)
1960 (age 55)
1958 (age 57)
1956 (age 59)
1954 (age 61)
1952 (age 63)
2,700,000
1940 (age 75)
2,900,000
1938 (age 77)
3,100,000
Bust Years
3,300,000
1936 (age 79)
3,500,000
1934 (age 81)
1932 (age 83)
1930 (age 85)
3,700,000
Boom
Years
Current Age:
1920 (age 95)
What Wealth Transfer?
# U.S. Births
4,300,000
4,100,000
3,900,000
2,500,000
What do you need in place to get started?
 Legacy society or other “tool” for initiating conversations
 Clear reasons why supporters should want to take this big step
 Staff and board commitment to long-term nature of planned giving
 Campaign or other time incentive for pushing people to commitment
27
What are the key concepts for legacy conversations?
 Less than 50% of Americans have any estate planning documents

And that percentage is increasing with Baby Boomers!
 Why is there such a big gap between donor and bequests donors?

Generally, only about 10% of your decent donors will include your org in their
estate plans
 What about our big planned giving failures?
28

How many times do we see boards refusing to push planned gifts among its
members?

How many times have seen beautiful planned giving mailings produce barely any
response from a clearly ripe audience!
What the
What you see subconscious sees
Seminar
Tonight:
Estate
Planning
Seminar
Tonight:
Your
Upcoming
Death
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
 What is 1st-stage defense to death reminders/one’s mortality?
 AVOIDANCE (1st stage defense)
 Distract
 Differentiate
 Deny
 Delay
 Depart
 How do we sidestep avoidance?
30
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
 How do we sidestep avoidance?
 Donor organ donation question in Europe:
 Opt-in – Want to donate your organs? MOST SAID NO
 Opt-out – Want to opt out of organ donation program – MOST SAID NO
 How about mixed packaging?
 Help us secure our future good works (like we are doing today) through
joining our Legacy campaign (or society or whatever)
 Try sidestepping direct death reminder with carefully designed Legacy
message that emphasizes other things besides direct death reminders
31
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
 In any case, it may not be us who have to break through 1st stage avoidance
 It could be:
 Illness
 Injury
 Advancing age
 Death of a family member
 Intentionally planning for one’s death through estate planning
 Keep in mind that your prospect may already be beyond 1st stage avoidance
32
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
2nd stage defense to
death reminders:
Symbolic immortality
Supporting and being
remembered by one’s
surviving “in-group”
I will die, but my values, beliefs, story will live
on, through my influence and support of my “ingroup” [family, interest group, community]
Permanence is
psychologically
attractive
Something
reflecting
the person’s
life story
(community
and values)
Will live
beyond
them
H
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
 Bequest decision making emphasizes “visualized autobiography” brain
regions
 Bequests to friends/family engage “memory and emotion” brain regions
more than charitable bequests
 2nd-stage defense to death reminders is to seek symbolic immortality or
“autobiographical heroism” by supporting one’s “in-group” community
 Some part of one’s self – one’s name, family, community, achievements,
values, goals, etc… – will persist after death.
 Leave a Legacy that will be remembered
35
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
 Tell life stories of donors who will live beyond their death through bequest
giving – PREFERABLE FROM LIVING INDIVIDUALS
 Remind donors of life story connections of friends/family with the
charity/cause through tribute bequest opportunities

Emotion and memory stronger with family/friends

Connect that emotion/memory to a your prospect’s legacy gift
 “Permanence” bolsters the message
36
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
 Add something to get prospects from YES to NOW
 Time limits
 Matching gift time limit
 Campaign time limit
 Participation time limit
37
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
What are the key concepts for legacy conversations?
Brain reaction studies confirm:
38
Visualized
Biography
Family
Emotion
Avoidance
Symbolic
Immortality
1
2
3
4
Life Stories
Tribute
Bequests
Mixed
Packaging
Bequest
Permanence
Inside the Mind of the Planned Giving Donor, Profession Russell James, 2013
Top ten factors that triggered charitable
addition to estate plans:
1.
Approaching death
2.
Becoming a widow or widower
3.
Diagnosed with cancer
4.
Decline in self-reported health
5.
Divorce
6.
Diagnosed with heart problems
7.
Diagnosed with a stroke
8.
First grandchild
9.
Increasing assets
7 out of top 10 triggers
for adding charity to
estate plans relate to
addressing one’s
mortality!
10. Increasing charitable giving
39
Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
Top ten factors that triggered REMOVING
charities from estate plans:
1.
Decline in self-reported health
2.
Approaching death
3.
Becoming a widow or widower
4.
Divorce
5.
Diagnosed with cancer
6.
Diagnosed with heart problems
7.
Diagnosed with a stroke
8.
First grandchild
9.
First child
The same 7 out of top 10
triggers for adding
charity to estate plans
relating to one’s
mortality were the same
for REMOVING charities!
10. Exiting homeownership
40
Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
When To Start The Conversation
Mid-30s to 50
Climbing
Early Acquisition Phase
50s to Early 60s
Top of Hill
Late Acquisition Phase
60s to Mid 70s
Retirement Planning
Early Preservation Stage
Late 70s and up
Health Concerns, Legacy
Late Preservation Stage
41
• Annual giving
• Recruitment for future leaders
• Major gifts
• Leadership positions
• Campaign/planned gift combo
• Estate plans are formulating
• Annual/major giving slows down
• Keep involved and keep in estate
How do you prep your prospects?
 Messaging done properly works
 Announcements and updates at board meetings and other events
 Articles in publications about “heroic” planned giving donors
 Anything that creates any extra sense of urgency
42
How do you start the actual Legacy conversation?
 Prep in form of updates, marketing, etc.. has happened
 Get in-person meeting
 Bring another legacy donor, if applicable
 If possible, have other legacy donor share why they made his/her legacy
decision
 Any non-death reminder incentives would be great!
43
Frame Conversation Around Legacy
 Conversations must be about your prospects’ personal LEGACY

Not about their deaths

Can we tap into their nostalgic org-connected memories through initial chit-chat?
 How can we ensure that we can continue our mission for the next
generation?

Not about how we need your bequest today
 Have you thought about your own legacy with this org/community?
 What kind of legacy do you picture for yourself?
44
Initiating The Conversation
 Goal: Introducing the idea and starting the conversation

Your goals: simply communicate the legacy case (legacy elevator pitch?) and get
your prospect thinking about their legacies (these take months, if not years, to
develop!)
 Have a “legacy” opener ready that challenges your donor to think about
his/her impact beyond their live(s)

Have you ever given thought to your own legacy with ….?
 Also decide in advance what you are asking the prospect to consider

Would you consider being a founding member of our Legacy challenge?
 Gauge the response for continuing the conversation
45
Your Legacy Case Statement
 Why a legacy case statement?
46

Website and other communications

A call to action

Articulation of the reasons why your institution’s members, friends,
alumni, etc.. should include your organization in their estate plans
Your Legacy Case Statement
 Different than your organization’s case statement for giving

Your case for giving today should emphasize what you are accomplishing today
and in the near future

Your legacy case emphasizes how your donors’ legacy giving can ensure the
future of the institution
 Elements of a legacy case statement link:

Past experiences/benefits/memories (words or imagery)

With current success

And need to secure the future
 Challenge for your donors’ to establish their own personal legacy
47
Making The “Ask”
 Your goal is to ensure that the prospect knows that he/she has been asked
to do something

Don’t expect an answer on the spot
 Write a game plan and script for yourself, other staff and volunteer solicitors

Know how you are going to start off the conversation

Have an idea of what you will say to transition the conversation towards an ask

Have your ask memorized and ready to go
 Put the ball in your prospect's court and listen
 Gauge the response for continuing the conversation
48
Training Yourself
 No training replaces just doing it
 In person meetings are a must
 Never be overly aggressive

But make sure your prospect at least knows he/she is being asked to consider
joining the legacy effort
 Start with getting the commitment to the idea (details not needed now)
 Build into your efforts follow-up for later years for more details
49
Initiating The Legacy Conversation
And Getting To The Ask
Planet Philanthropy 2015
June 7-9, 2015
The Hyatt Regency in Jacksonville, Florida
Jonathan Gudema, Esq., Principal, Planned Giving Advisors LLC