Planting the seeds for
generations to come

Non-Profits in Trouble

Are You the Problem or the Solution?

By Viken Mikaelian

It's big news. And let's face it, it's true. Non-profits are in trouble. And of course the economy is to blame. Some blame Obama. Some blame Bush.

But I blame you.

It's time to wake up. The real reason non-profits are in trouble is not because of the economy. It's because we were not proactive 20 years ago. Sorry, I mean 5 years ago -- no… make that 1 year. Hmm… perhaps since this morning?

The fact is most non-profits have always been in trouble. Because they've always run their organizations like a non-profit and not like a business. And not much has changed over the past 20 years.

Fighting for the next buck

That's annual giving. Nothing wrong with that. But when you make "We need the cash now!" your constant mantra instead of endowment gifts your long-term goal, you lose direction, you lose focus, and you lose your future. Maybe even your job. And the only thing you gain is chaos and urgency.

Sound familiar? It's not successful and it's not healthy. It's how we miss the bigger, better, easier to get gifts. Gifts that make a difference. Gifts that create opportunities. Gifts that create a future.

Like a few very simple planned gifts.

Not those two ugly words again!

Listen: You don't get different results from doing the same thing over and over again. But that hasn't stopped the same folks who said "We need the cash now!" 10 years ago from singing the same some today. What is it they don't get?

The fact is many planned gifts are not deferred. They can ease the present pain we are all going through since quite a few can provide cash, today. Even bequests do not have to be deferred (don't worry… it does not involve pushing your donor off a cliff). This may sound crazy but keep reading.

Plus, studies show that donors who make planned gifts actually increase their annual giving. That means annual giving shouldn't be your priority – planned giving should be, because greater annual giving will follow. And isn't that what you wanted in the first place?

Don't be fooled. Annual giving-based, short-term fundraising isn't practical. It's the tail wagging the dog.

Who's reactive? You are.

Most folks – not just fundraisers – obsess with the small stuff instead of the big stuff, the urgent instead of the important. That means they neglect the "long-term stuff" that's critical for long term sustainability.

Who's "they"? You are. Especially you young folks (okay, I know I just lost half of my readership there, but I also know the smart ones will keep on reading). Here's an example.

I attended a fundraising conference in Los Angeles a few years ago. There was a breakout session titled "How to Strengthen Your Endowment with These Four Simple Planned Gifts" that had attracted eight attendees. Down the hall, they were stuffing 180 fundraisers like sardines into a session titled "How to Raise Money by Throwing Parties."

Want to bet those eight in the planned giving session will raise more money in their careers than the other 180 combined? Those eight will do it simply, proactively, and strategically; and probably without much hard and gruesome work. And they'll earn a better living by doing so.

If that's not a deal clincher for your career, I don't know what is.

Smart non-profits shifting focus

A recent Miami Herald headline read "With eye on future, nonprofits shift focus to planned giving."

In the article, Amy Driscoll writes, "Although organizations need donations now more than ever, planned giving offers a way for people to declare an intention to assist their favorite causes in the future – even if they don't feel financially secure to donate now. That enables nonprofits to strengthen their ties with donors. If financial conditions change, the plan can change as well."

The article went on to explain how planned gifts establish stronger relationships for future giving. (Read the article here at What The Miami Herald left out, however, is that many popular planned gifts are not deferred. And yes, they can supplement annual gifts, now. TODAY.

Too much competition = BAD

Remember, too many non-profits are fighting for too little available cash. And did you know that cash only represents 5% of the nation's wealth? Yes, it is that small. And it's that hard to get. Do you really want to compete in the same sand box as the non-profit next door – not to mention the millions around the country?

Instead, how about pursuing the four simple planned gifts that very few non-profits are savvy enough yet to pursue, and that target the remaining 95% of this nation's wealth? Gifts that are easy to market, easy to give, and easy to receive.

This is how you finesse the competition, because so many non-profits are frightened of planned gifts, because supposedly they are so "mysterious," so "complicated," so "voodoo."

Who's running this spook show?

Many planned giving "gurus" have based their career on making the subject sound complicated or dangerous. That's good for them but not for you. Even on a public website as popular as About.Com, the messaging is, "Planned giving is a complex program of various financial instruments that can be adapted to each donor's needs… Nonprofits usually enlist professional help in setting up their planned giving programs and hire staff educated in planned giving methods."

Not true. And a self-fulfilling failure prophecy for any fundraiser that believes it.

Fact is: you don't need to be a Harvard lawyer to pursue planned gifts. Even among the higher strata of non-profits – such as Harvard itself, or a Stanford, or an American Cancer Society – many of the planned gifts they receive are simple gifts anyone can make. Anyone.

As to the real complex planned gifts, don't worry. At that level, the donor and her financial advisors and lawyers are savvy enough as to what they want to do and they will cut the deal. You just enjoy the benefits.

Easy. Simple. Not complicated. (repeat)

Okay, let's get specific. Many fundraisers are not aware that there are a number of planned gifts that are simple to market, simple to give and simple to receive. And most are not deferred. These make up 85% of all planned gifts. It's particularly easy to tap into these gifts because you can do it without any legal counsel or any pain (not that the two necessarily go hand in hand).

These gifts are:

  • Gifts from one's IRA,
  • Gifts of appreciated "stuff" (stock, an old Ferrari, antique art -- anything),
  • Life insurance (real easy), and
  • Bequests (even easier).

Speaking of bequests, many fundraisers resist embracing them as they only happen years in the future. Guess what: it doesn't have to be that way.

Bequests can be "immediate" gifts.

Not only are bequests very simple gifts (it is much easier for a donor to make a $40,000 bequest than to write out a $400 check). Bequests do not have to happen 25 years down the road.

I have seen charities maximize response to their bequest campaigns by recommending simple codicils. A codicil is a simple will amendment and it can ask, "Please donate 1%... 2%... 15%....of your residuary estate to our charity." The residuary estate is what is left after specific bequests, such as to children, have been paid. Some donors may bequeath that amount and some may give 100%. (BTW, my personal advice is never to ask for 100%, especially if the donor has children. Children passed over in their parents' will are unlikely to be philanthropic in the future.)

Your goal is to cultivate tons of bequests so that, statistically, you will have prospects leaving this earth within a few years. Some even tomorrow. One organization I work with identified 1900 bequests over a four-year period. Statistically, some donors in that group were dying the "next day". Those are "non-deferred" bequests.

Hard to believe? Maybe. Possible? Absolutely.

In conclusion.

Like it or not, we're coming back to those two ugly words they've been preaching about for the past 60 years. Anyone know what they are? If you're stumped for an answer, you're not alone.

Those who do know the answer are the ones who will stand out from the crowd. They're the ones who act proactively with the future in mind.

They know the simple answer is "planned gifts." For fundraising. For their organizations. And for their careers.

Viken Mikaelian is CEO of PlannedGiving.Com, LLC. Viken, along with Brian Sagrestano, JD, CFRE, recently developed Planned Giving in a Box® … the perfect tool for the smaller shop to raise more and larger gifts.


Viken Mikaelian

I hope you found this white paper stimulating and useful. My mission is to make available to you the best know-how, insight, and tools so you can keep yourself, your career, and your organization permanently ahead of the curve.

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