I recently spoke with a client who had named two charities as beneficiaries of her IRA. She had already informed one of the organizations about the gift and had already received a thank you letter from them.
As she thought about the second charity, she decided to provide just her name, but she emphatically did not want to be added to any donor list. She just didn’t want the attention. For her, that’s not why she was making these gifts.
Having worked on the other side of the table – for non-profits – I know how challenging it can be to persuade donors to reveal their names or any details about a planned gift. It is widely accepted in the gift planning community that “known” planned gifts account for about 20% of the actual gifts made, meaning four of five planned gifts are unknown to the eventual charitable recipient of the gift. Stories are common about bequests that “fall from the sky” – a gift that nobody at the organization knew about, sometimes made by a donor who had never previously made a gift!
So the question is – should a donor tell a charity that they have included the charity in their estate plan?
I say yes. In my experience, the benefits of informing the charity far outweigh any drawbacks.
Benefits – to the Donor
- You are thanked for your gift now, even if it will not be received until after you are gone. Most charities have a program for honoring their planned gift donors through a “legacy” or “heritage” society. Those programs bestow generous, mostly intangible, benefits to their members and can bring the donor even closer to the mission of the organization. The best such programs enable the donor to feel like a member of the “inner circle” of the organization. If you aren’t interested in those benefits, you can inform the charity that you decline any program benefits.
- As the donor, you have control over how the charity can use your name. For example, you can always ask not to be added to any mailing list, even if you are welcomed into the legacy society. You can also ask to remain “anonymous” on any public donor lists, even if the charity’s staff knows who you are.
Benefits – to the Charity
- By adding a donor’s name to their planned gift roster, organizations can promote the popularity of planned gifts to other prospective donors and motivate additional gifts.
- Charities that know about future expectancies can engage in long-term strategic planning with better knowledge of future revenue.
- There really aren’t any, assuming you have made your wishes known to the charity regarding the use of your name in public lists or whether you wish to receive extra communication or recognition.
- Charity staff members will want to visit you and develop a personal relationship, to better understand the reasons for your gift. Many donors love those visits. If you aren’t interested, just let the charity know not to contact you.
Some donors are very private and wish to remain so. For everyone else, informing the charity that you have included them in your long-term plans can be a positive, rewarding decision with long-lasting benefits for you and for the charity you have remembered.
Questions or comments? Contact me on Twitter @juanros or LinkedIn.