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The Future of Planned Giving

By: Bill Moritz, JD
Executive Director

Based on a report by the National Council on Planned Giving’s Strategic Directions Taskforce

In 1990, young fundraisers hoped they might grow up to be planned giving officers. They sought the pinnacle of their profession—the most specialized knowledge, the wealthiest donors, the top nonprofit salaries and respect usually reserved for the most experienced estate planners. The National Council on Planned Giving grew by more than 1,000 new planned giving council members every year throughout the 90s with very little recruitment effort. No organization wanted to be the last to offer its donors the complex and coveted CRT. Fifteen years later, philanthropy and fundraising practices have changed. The economy and the geo-political climate have reorganized priorities for many Americans, with a related reorganization in the prospects of charitable gift planners. The number of people involved in gift planning has actually increased since 2000, but there are fewer specialists. More nonprofit planners are doing gift planning among other duties. In the for-profit professions, more financial and legal advisors are incorporating charitable planning into their general practices. As many of the job postings suggest, many people who work as gift planners are not narrowly focused on traditional planned gift vehicles.

Three new trends have shaped the prospects for gift planners and the plans for their national organizations. 1. The self-directed consumer, whose professional experience and access to information combine to make him less reliant on the advice and services of a gift planning professional. 2. For-profit advisors are directing more of the planned giving decision-making. 3. There has been a convergence of planning that deals with wealth and family values. It seems that once wealth-holders recognize their families are financially secure, they tend to look for deeper purposes for their material means.

The National Council on Planned Giving conducted an exhaustive study of the environment surrounding the field of planned giving and came up with some interesting conclusions about the future of the industry.

The study came up with eight key conclusions about Planned Giving within the Field of Development.

1.      The erosion of planned giving as a separate specialty within charities’ development offices is ongoing.

2.      There is an increasing emphasis by charities’ senior management on current dollars and the bottom line, with a resulting shift in resources toward major gifts fundraisers.

3.      The number of highly specialized gift planners within charities is dwindling

4.      Changes in tax laws and the economy over the past ten years have reduced tax incentives for planned gifts, and reduced the visibility of the most common planned gift instruments.

5.      A small top tier of charities tend to have sophisticated planned giving operations, while the majority of charities have few if any fundraising staff that specialize in planned giving and most staff have limited understanding about the basic principles of planned giving.

6.      In local charities there is an increasing demand for generalist programs, ie. fundamentals and marketing, and a continuing debate about whether planned giving specialists exist to serve solely the charity or a broader notion that planned giving serves the donor first and the whole charitable community.

7.      Senior management is less and less willing to buy into a distinction between planned giving and major gifts.

8.      Most small and mid-size charities are doing little to no active planned giving work. The trend is toward hiring major gifts officers and then hoping for the best in terms of planned giving.

The study came up with five key conclusions about Planned Giving and the Financial Services Professions.

1.      An increasing number of planned gifts are being structured by professional advisors and charity is very often not included in these conversations.

2.      Many donors are seeking technical advice from professional advisors, who are not necessarily better informed or more technically proficient than in the past but they have products to sell or commissions to earn.

3.      There is still underlying suspicion of –and negative feelings for—professional advisors among planned giving officers who feel excluded in the process.

4.      There are many segments in the ranks of professional advisors, and each segment has differing needs and interests relative to their work and charitable gift planning. They often have a product agenda.

5.      Professional advisors are doing more seminars and outreach on planned giving and think of themselves as gift planners with a more global and holistic plan for clients than charities.

The study also came up with several conclusions about the Accessibility of Information.

1.      Information about charitable planning has proliferated, and is now easily accessible to all.

2.      There is a heightened charitable awareness and receptivity among donors.

3.      Planned giving officers have less control over the gift planning process and are not the only source of information and advice.

4.      Models for planned giving operations based upon the ability to control and manage the information are no longer effective.

5.      Private foundations, supporting organizations and donor advised funds are proliferating as record numbers of donors are implementing gift structures that increase their active involvement.

Finally the study came up with the following key conclusions about gift planner knowledge and expertise

1.      Despite an abundance of options, the need for high quality continuing education for gift planners is still critical.

2.      An increasing number of planned gifts are cultivated by major gift officers and professional financial advisors, many of whom have rudimentary gift planning knowledge.

3.      A number of planned gifts are thwarted or not pursued, due to lack of knowledge by major gifts officers and professional financial advisors.

4.      Planned giving officers can now work smarter and faster due to rapidly evolving advances in technology.

The critical needs in the area of planned giving for existing charities who might be considering outsourcing their planned giving program are:

1.      A Planned Giving service provider with technical expertise who can complement and work with major gift professionals at the charity and provide services “a la carte” for the charity based on their individual needs and the needs of their donors.

2.      A Planned Giving service provider who can be brought in by charities that is respected within the financial profession and who can work directly with the professional financial advisors and assist them in structuring and closing planned gifts that will benefit the charity.

3.      A Planned Giving service provider who understands the new landscape of private foundations, supporting organizations, charitable trusts and donor advised funds and can help charities work with donor who are utilizing or would like to utilize these tools of charitable planning.

4.      A Planned Giving service provider who can help the charity with both simple and complex charitable solutions for donors that keep the charity relevant and involved in the planning process focusing on both current gifts and future gifts.

5.      A Planned Giving service provider who has a comprehensive understanding of the fields of estate planning, business planning and charitable planning and will help educate the major gift advisors at a charity and work with them to serve the donors of the organization more completely.

6.      A Planned Giving service provider who cares about the charity and its development staff and who will work to build a successful planned giving program for the charity, on their budget, and work to enhance the relationship between donors and the charity and its staff as a member of the development team, not a stand-alone service.

The New Horizons Foundation specializes in helping donors with Planned Giving arrangements and has been in service for 25 years. The Foundation provides sophisticated charitable services to its projects and also serve the needs of separate charities and their donors in this changing landscape. If you would like to talk to a stewardship professional at The New Horizons Foundation about the possibility of having the Foundation provide support services to your charity, please give us a call.

New Horizons Foundation

The New Horizons Foundation, founded in 1989, is a nonprofit, tax-exempt, public charity, organized and operating under the laws of Colorado for the purpose of helping individuals accomplish their charitable objectives in religious, educational, scientific, benevolent and health related activities.  Read More