Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity.
Today’s question comes from a nonprofit employee who wants advice on how to talk to legacy givers as you document their legacy gift intent.
Dear Charity Clairity,
I was talking with a donor the other day and he mentioned our organization was in his will. How do you go about asking for amounts and documenting it? For example, we want to document that he is a legacy giver, and we’d love to enter the amount as a pledge. How do you ask questions like that? Is this something nonprofits do? Any other thoughts?
— Seeking a Record
Dear Seeking a Record,
As fundraising departments everywhere become more data driven, it’s not unreasonable to want to document the amount or estimated value of donor bequest provisions, including whether they are specific, contingent, or residuary and the date of the will or trust.
Today, the portion of organizations showing the estimated dollar value of bequest intentions on internal management reports may be approaching 50%. For those intentions whose values are undisclosed by the donor, the best practice is to apply a five-year or ten-year rolling average, based on the pool of known amounts.
That being said, it’s important to frame requests for this information in donor-centered terms.
When asking for this information, let donors know that you’re asking:
- For future planning purposes
- To assure that their desires are fulfilled
I don’t recommend requiring donors to report to you the amount of their legacy gift expectancy. What I recommend instead is asking donors if they would feel comfortable completing a non-binding Letter of Intent (see my response to Needing Proof below.) Let donors know this will help you ensure that their wishes are fulfilled “to the letter” when their gift matures. You can ask the donor to let you know the expected amount, but make it clear that this is optional.
Some donors love to share, while others prefer to keep this private. If you have a Legacy Society and list donors by level of giving, some donors will be proud to disclose the amount of their intended bequest. Even if donors choose to keep the amount private, you can certainly ask them to inform you if they’ve left a specific, contingent, or residual bequest.
As you know, all of this is important for internal planning purposes and can be helpful not just with financial forecasting but also with plans for future stewardship. Since residual bequests tend to be the largest in size (most people underestimate the value of their estates at death), knowing this can help you prioritize certain programs, campaigns, or cultivation efforts.
I particularly like to give donors the opportunity to write a bit about themselves and why they left the gift, telling them you’d like to be able to share this with future generations as a way of:
- Making sure that their memory lives on
- Inspiring others to follow in their footsteps
Finally, keep in mind that you shouldn’t enter a bequest as a “pledge” on your financial ledger; bequests are always revocable and are not true “receivables” in accounting terms. You can keep a separate record for internal management and forecasting purposes.
In your donor database, you can enter an expected amount in your notes for your own tracking purposes. The only reason you’d ever have a binding bequest pledge is if your nonprofit intended to sue the estate for the money after the donor died. This is seldom a good look. As one of my mentors once told me, “If you wouldn’t want to see it on the front page of the local newspaper, don’t do it!”
It’s fine to seek a record; just know why you’re doing so and how you’ll use the information you receive.
— Charity Clairity
Have a question for our Fundraising Coach?
Please submit your question here. Remember, there are no stupid questions! If you need an answer, it’s likely someone else does too. So help your colleagues by asking away. Please use a pseudonym, like “Seeking a Record” did, if you prefer to be anonymous.
The post [ASK AN EXPERT] How To Document Legacy Gift Intent appeared first on Bloomerang.