We are in the midst of the Great Wealth Transfer. Over the next 20 to 25 years, as the Baby Boomer generation ages, we can anticipate a transfer of over $70 trillion in assets.
- By 2030 GenXers & Millennials will have five times as much wealth as they have today. These younger donors, with new-found wealth, are going to become the next philanthropic powerhouses.
- An estimated $12 trillion will be transferred to nonprofits through 2045 as older donors leave considerable charitable gifts in their estate plans. Already more than $45 billion is bequeathed yearly to nonprofits and the transfer is just beginning. If you are not asking your donors for planned gifts, someone else will.
Knowing that major and planned giving are poised for explosive growth over the coming years, what should your organization be doing to take advantage?
Building Relationships with "New" Donors
The new generation of donors will include more women, people of color and younger donors. This will bring a shift in traditional giving. Courting these donors and keeping them in your pipeline will be crucial to success. Fundraisers need to better communicate with donors from lots of backgrounds. Consider the following recommendations:
- Create more of a personalized experience, both with communications and giving.
- Consider having a lower threshold for recognition to engage donors earlier in their philanthropic journey. Make opportunities such as scholarships and giving circles accessible to a wider audience.
- Utilize technology to ensure you have multiple touchpoints for donors with your organization and your mission.
- Focus on digital and mobile options for communications and giving. Promote the advantages for donors and the impact for your organization of monthly and digital giving. A 2023 study from Forbes found that over half of Americans prefer to use digital wallets as a payment method and most who use digital wallets are sending more. Over half who use digital wallets would STOP shopping with a vendor that did not allow digital wallet payments. Make sure your giving page is up to date and includes both mobile payment and digital wallet options.
- Share stories of impact. 75% of donors are looking for information on the impact their gift can make on your mission before they donate.
- Develop long-term donor relationships through transparency.
- Prioritize the content and accessibility of your website. 60% of donors say a website is still the top way they research organizations before they decide whether or not to give.
- Promote volunteerism for your organization and your cause. New donors are looking for opportunities for engagement, and volunteerism is an accessible point of entry.
- Encourage gifts of stock and appreciated assets. Gifts of stock do not affect current income, have the best tax advantages, and the stock market continues to be strong – making it a smart option for charitable gifts. Don’t forget much of that transfer of wealth is coming in the form of stocks
As the demographic of our potential donor base evolves, tools that worked yesterday will not be effective tomorrow. Successful fundraisers will need to plan and adjust now for a new reality that the Great Wealth Transfer will bring.
Formalize your Planned Giving Program
If you are not already talking to your donors about including a gift for your organization in their will or estate plan, now is the time to start. If you are a small shop, you don’t need a complex planned giving program; most planned gifts come in the form of bequests. Determine what planned gifts your organization can accept and make sure your gift acceptance and acknowledgment policies are updated.
Consider the following strategies to strengthen your planned giving efforts and ensure your nonprofit is ready for the opportunity the Great Wealth Transfer brings:
- Ask your donors to consider a bequest or beneficiary designation for your organization. Once a nonprofit is included in a will or estate plan, the donor is likely to fulfill that commitment. When you meet with donors, include these options in your conversations.
- Focus on building relationships with your donors. Like all fundraising, planned giving is about relationships. Marketing and outreach techniques will generate interest and help identify planned gift prospects, but securing gifts requires relationships.
- Stay in touch with donors who have expressed interest in a planned gift or have disclosed that they have included your organization in their will. Even if their annual giving drops off, you need to continue to steward those relationships.
- Create planned giving materials that are informative, easy to understand, and brief but thorough. Remember that people give to people, so include your name (not just your title) and maybe even your picture, with your contact information. All planned giving materials should include your organization’s legal name, address and EIN. Incorporate this same information on the giving page of your website.
- Feature living donor stories in your communications. Ask your donor to share why they chose to make a planned gift and focus on the impact their gift (and others like it) will have on your mission. Planned giving options are frequently associated with death, something no one wants to hear or talk about.
- Start your planned giving marketing and outreach with your consistent donors and those most closely engaged with your organization: your volunteers, staff, board and recipients of services. They are your best prospects!
With the Great Wealth Transfer underway, every nonprofit should be focused (in part) on finding and building relationships with major and planned giving donors. These types of gifts are the lowest cost, highest return gifts nonprofits can generate. There is no better way to ensure for the future growth and strength of your organization.
