Greetings from the community foundation!
Before we head into the giving season, it’s wise to reflect on the reality that a planned giving program is, by definition, a long-term strategy. The key is to never give up, no matter how strong the economic headwinds seem to be. A little bit of time and effort invested each month in discussing planned giving options with donors will deliver strong returns over time.
Once again, our newsletter’s theme is repeat, repeat, repeat. Most of us are familiar with statistics showing that a person must hear a message at least seven times before it sinks in. (It may even be more than seven!) And planned giving is a message worth repeating! Remember, planned giving transactions can be every bit as good for your donors as they are for your organization.
What’s more, especially with so many factors in flux across the marketplace, your donors need to hear from you that nothing has changed about your commitment to building financial security so that you can continue to improve the quality of life in our community for years and decades to come. Your board and staff are in it for the long haul, and that’s a spirit you share with your donors who’ve committed to making planned gifts. Remind your donors that you value their long-term support and consider them to be your partners as you strive to fulfill your organization’s mission, every single day.
Please reach out. The team at the community foundation is here for the long haul, too, and we are always happy to serve as a sounding board for your planned giving and endowment-building strategies.
Thank you for all you do.
–Your community foundation team
Engaging donors by demonstrating commitment to diversity, equity, and inclusion
A study released by Give.org reinforced that charities' commitment to diversity, equity, and inclusion (DEI) is important to donors. Especially as you are evaluating your planned giving strategies for your organization’s long-term health, make sure that your messaging around DEI is accurate and compelling. The diversity of our communities will continue to grow, and forward-thinking philanthropists will want to be confident that your organization is poised to effectively serve future generations.
Of particular relevance to planned giving efforts are the following findings from the study:
–Donors will stop giving if a charity’s culture is unsupportive of diversity. Of the donors surveyed, 41 percent indicated that they would stop supporting a charity if they discovered that the organization’s culture discriminates against the people it serves.
–“Culturally insensitive images and language” are also red flags for donors, and 34 percent of those surveyed said they would cut off support if they saw evidence of an organization’s insensitivity.
–Board composition is important, too. Of the donors surveyed, 17 percent said they would no longer support the organization if its board is not diverse.
The community foundation would be happy to help your team work through the diversity aspects of your planned giving program. For example, certain donors may wish to establish a field-of-interest fund or designated fund at the community foundation to provide long-term support for your organization provided that diversity criteria are met. The community foundation can serve as a neutral third party to monitor that criteria and help your organization be successful. This technique might very well help you capture a major or planned gift that a donor would not be willing to make outright.
Tapping into donors’ entrepreneurial motivations to build your endowment
It’s not news to those of us in the philanthropy world that donor motivations change across generations. It’s relatively easy to get up to speed on the trends, but it’s not always easy to know what to do about those trends, especially when it comes to planned giving.
One of the biggest challenges organizations face as they are building their endowments is that younger donors tend to be more entrepreneurial and hands-on, which doesn’t always align perfectly with a desire to provide unrestricted funding or endowment gifts to your organization. So what can you do? Here are three suggestions:
–Learn about the mindset. Spend a little time digging into the research and commentary–written specifically by entrepreneurs and for entrepreneurs–about charitable giving. This will help you understand the unique point of view that these donors often bring to the table when you start a conversation about major gifts and planned gifts to your organization.
–Get up to speed on gifts of closely-held stock. Many younger philanthropists have built their wealth by starting and growing companies. Giving closely-held stock to a public charity is a very tax-effective giving strategy, provided that the gift is completed well before any sale of the company is in the works. As you brush up on the rules surrounding gifts of closely-held stock, please reach out to the community foundation. We can provide insight and resources to help you navigate these types of gifts. Frequently, we can help you secure a gift of closely-held stock for your endowment or reserve fund administered at the community foundation.
–Involve the next generation. Be intentional about inviting younger donors and successful entrepreneurs to join your board of directors and committees. In this way, you’ll be able to show these emerging philanthropists, first hand, the value of the services you provide to the community and the return on investment of philanthropic dollars over the long haul. You’ll also demonstrate a strong commitment to ethics that can weather the ups and downs of the marketplace and stay committed to the organization’s mission through governance by a self-perpetuating, independent board of directors.
Footnote: The power of an agency fund
Frequently, an organization’s board of directors is at a loss when it comes to growing an endowment, structuring and accepting gifts of real estate and other hard-to-value assets, and following best practices for establishing and following an investment policy. Happily, by establishing a fund at the community foundation, the community foundation can step in as your behind-the-scenes back office, giving your board and staff more time to focus on your programs and donors.
An endowment or agency fund at the community foundation is a powerful tool to help secure your organization’s financial future for generations to come. If your organization has already established an endowment or agency fund at the community foundation, you are well aware of the benefits. Indeed:
–Nonprofit organizations frequently establish funds at the community foundation to set aside reserves or rainy day funds.
–The team at the community foundation is adept at navigating the specific accounting standards that are unique to this type of arrangement.
–The community foundation team can help establish investment policies and gift acceptance policies, making it easier for you to engage in fundraising discussions.
As always, the community foundation is here to help. Our tools and services make it easier for you to grow your reserve funds and endowments. We look forward to continuing to work together.
This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.