8 Common Misconceptions About Planned Giving

Planned Giving

By Jeremy Reis

Planned giving is a critical component of any successful nonprofit fundraising strategy, yet many fundraisers find themselves held back by common misconceptions about this essential tool. These misconceptions can lead to missed opportunities, untapped potential, and a lack of long-term financial stability for organizations.

In this article, we’ll debunk eight of the most pervasive myths surrounding planned giving and provide actionable insights to help you effectively incorporate this powerful fundraising approach into your nonprofit’s strategy.

Table of Contents

Misconception 1: Planned giving is only for wealthy donors

Contrary to popular belief, planned giving is not exclusively for high-net-worth individuals. Donors from all financial backgrounds can participate in planned giving, and it’s essential for fundraisers to communicate this effectively. Many affordable planned giving options exist, such as beneficiary designations on retirement accounts or life insurance policies, which allow donors to leave a lasting legacy without impacting their current financial situation.

Additionally, charitable gift annuities offer donors the opportunity to receive a steady income stream during their lifetime while ultimately providing a significant gift to the organization. By presenting these options to a wide range of donors, nonprofits can expand their planned giving pool and secure a more diverse and sustainable funding base.

Misconception 2: Planned giving is too complicated for most donors

One of the primary reasons fundraisers may hesitate to discuss planned giving with donors is the perception that it’s too complex. However, many planned giving vehicles are quite simple to understand and implement. The key is for fundraisers to explain the options clearly and concisely, focusing on the benefits to both the donor and the organization.

By using relatable examples and avoiding jargon, fundraisers can demystify planned giving and make it accessible to a broader audience. Visual aids, such as infographics or simple flowcharts, can also help break down complex concepts and make the process more approachable. Remember, your role as a fundraiser is to serve as a guide and resource for your donors, helping them find the planned giving option that best aligns with their personal and philanthropic goals.

Misconception 3: Planned giving is only for older donors

While it’s true that many planned giving donors are older, it’s a mistake to assume that younger individuals are not interested in or capable of making planned gifts. Donors of all ages can participate in planned giving, and there are significant benefits to starting these conversations early.

By introducing planned giving concepts to younger donors, you can help them understand the long-term impact of their support and encourage them to think strategically about their philanthropic legacy. This early engagement can foster a deeper sense of commitment to your organization and lay the groundwork for future major gifts. Additionally, as younger donors advance in their careers and accumulate wealth, they’ll be more likely to consider planned giving options if they’ve already been educated about the possibilities.

Misconception 4: Planned giving cannibalizes current giving

A common fear among fundraisers is that promoting planned giving will lead to a decrease in annual or major gifts. However, research has shown that this concern is largely unfounded. Planned gifts often come from assets rather than disposable income, meaning that donors can maintain their current level of support while also making a significant future commitment.

In fact, studies have demonstrated that donors who make planned gifts tend to increase their annual giving over time. This is likely due to the heightened sense of connection and investment they feel in the organization’s long-term success. By presenting planned giving as a complementary strategy rather than a competing one, fundraisers can help donors understand the value of supporting the organization through multiple avenues.

Misconception 5: Planned giving is only about bequests

While bequests are certainly a common and valuable form of planned giving, they are far from the only option available. Fundraisers who focus solely on bequests risk missing out on opportunities to secure other types of planned gifts that may be more appealing to certain donors.

Charitable remainder trusts, for example, allow donors to receive income from their assets during their lifetime while ultimately providing a significant gift to the organization. Donor-advised funds offer donors the flexibility to support multiple charities over time while receiving immediate tax benefits. Offer a range of planned giving vehicles to donors to help them find the option that best fits their individual circumstances and philanthropic goals.

Misconception 6: Planned giving is a one-time conversation

Securing a planned gift is undoubtedly a milestone worth celebrating, but it’s essential to recognize that planned giving is an ongoing process rather than a singular event. Effective planned giving strategies require continuous stewardship and cultivation to ensure that donors remain engaged and committed to the organization over the long term.

This means regularly updating donors on the impact of their future gifts, inviting them to participate in special events or recognition societies, and maintaining open lines of communication to address any questions or concerns they may have. By treating planned giving as an ongoing relationship rather than a one-time transaction, fundraisers can build trust, loyalty, and a sense of shared purpose with their donors.

Misconception 7: Planned giving is the sole responsibility of the planned giving officer

In many organizations, planned giving is seen as the exclusive domain of the planned giving officer or department. However, this siloed approach can limit the potential for identifying and cultivating planned giving prospects. To maximize the impact of planned giving, it’s essential to involve the entire fundraising team in the process.

Major gift officers, annual fund staff, and even program staff can all play a role in identifying potential planned giving donors and starting initial conversations about their philanthropic goals. Collaborate across departments and share information about donor interests and interactions so you can develop a more comprehensive and effective planned giving strategy.

Misconception 8: Planned giving marketing is ineffective

Some fundraisers may be hesitant to invest in planned giving marketing, believing that it’s unlikely to yield significant results. However, when executed strategically, targeted multi-channel marketing can be a highly effective way to promote planned giving and engage potential donors.

Successful planned giving marketing campaigns often include a mix of direct mail, email, social media, and educational events, all designed to raise awareness about the benefits and options available. By segmenting audiences based on factors such as age, giving history, and expressed interests, organizations can tailor their messaging to resonate with specific donor groups. Additionally, showcasing the impact of previous planned gifts and sharing stories of satisfied donors can help build trust and inspire others to consider making their own planned gifts.

Planned giving is a powerful tool for securing the long-term financial stability and success of nonprofit organizations. By understanding and overcoming the common misconceptions surrounding planned giving, fundraisers can unlock the full potential of this essential fundraising strategy. Through clear communication, ongoing stewardship, and a collaborative approach that engages the entire organization, nonprofits can build strong, lasting relationships with donors and create a legacy of impact that extends far into the future. As you work to incorporate planned giving into your fundraising efforts, remember to focus on education, flexibility, and the unique needs and goals of each individual donor.


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