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Karen Telleen-Lawton: Legacy Giving For Small Nonprofits – Noozhawk

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By Karen Telleen-Lawton, Noozhawk Columnist | August 26, 2019 | 4:00 p.m.

Santa Barbara’s wealth can be measured in natural beauty and also in the 400-1,000 nonprofit organizations to whom it is home. Even the smallest of these cherish stakeholders who believe in their mission. One way to carry that mission into the future is to establish legacy gifts.

If you are charged with carrying out a legacy program, it doesn’t need to be difficult. In fact, the simpler your plan, the more successful you’ll be in encouraging donors, who may think bequests are only for the rich. Even for small nonprofits, relatively small bequests can comprise up to 10 percent of overall annual philanthropy.

Here are some pointers to consider when establishing legacy giving:

Design a plan

For small nonprofits, it is critically important that your stakeholders know you are secure in your long-term vision:

What is your mission?

How will you continue the work into the future?

What is your plan to recruit and retain good staff, especially the executive director?

Your literature should focus on the psychological and emotional benefits to the donor of legacy gifts. Income, gift, and estate tax benefits are reasonable talking points, but they are not generally the primary motivator.

Share the plan with stakeholders

Implement first with your board, who will likely already have been on board. Then ask your current major annual donors, followed by other donors, volunteers, service users, and other friends. Ask them: What would you like your legacy to be?

Don’t worry about your annual fundraising efforts. When you bring stakeholders onto your long-term team with planned giving, they often raise their annual commitment level.

Familiarize them with the options.

One of the easiest ways to make a legacy gift is to designate a nonprofit as the beneficiary of a financial instrument. Whole life insurance policies, IRAs, and other retirement plans such as 401Ks and 403Bs require beneficiaries to be named. Beneficiaries can be anyone including family and nonprofit organizations.

Appreciated stock, real estate and other personal property can be directed by way of wills and trusts. Nonprofit organizations can be named inside a will or a trust. The organization can be awarded a specific proportion of the estate or they can name specific property.

When a donor wants to use these assets, you will want legal counsel to draft and coordinate the legal documentation.

Establish a club

An annual gathering of Legacy Club members allows you to showcase your non-rofit’s successes as well as show your gratitude. Members appreciate knowing others value your organization as much as they do. They may like to share how they were moved to pay it forward.

Develop your supporters with friendly interactions over the long term. Your club members will form the core from whom to cultivate new members. Russell James of Planned Giving Advisors found people who named charities consistently in their estate plans over the years leave around four times the amount left by those who made their decision late in life.

My penultimate tip is to thank your supporters for gifts past and present. Donors who are asked and thanked give twice as much as those were not thanked. Further, donors who were cultivated afterwards with notes, letters and visits gave three to four times as much, according to James.

Gratefulness is important, but the most essential step to developing a legacy program at your nonprofit is to ask. Philanthropic Planning found 70 percent of donors who made planned gifts did so because they were asked. Ask, and thank.

— Karen Telleen-Lawton serves seniors and pre-seniors as the principal of Decisive Path Fee-Only Financial Advisory in Santa Barbara. You can reach her with your financial planning questions at [email protected]. Click here to read previous columns. The opinions expressed are her own.

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