In October 2010, CharityVillage® and Give Green Canada jointly launched a survey to gather information about a subject in dire need of more data: bequest opportunities for the international charitable sector.

More than nine hundred people partook in the survey, representing eleven subsectors.

The results are in — the final report of the International Gift Planning Survey: Envisioning & Investing in Legacy and Bequest Opportunities was released late last month. Some of the numbers and statistics are sure to surprise, enlighten and motivate boards and directors across the third sector who may not be aware they're missing out on a vital future revenue stream.

Organizations are missing out

As the authors of the report point out, there is an "unprecedented intergenerational transfer of wealth" taking place globally. While tough to quantify at this point, this transfer is likely to be in the billions of dollars, according to the report.

"Despite the amount of attention paid to the existence of the wealth transfer, much less attention has been paid to what nonprofit organizations are doing to position themselves to reap the benefits," write co-authors Shawn Mitchell and Natasha van Bentum, director of content for CharityVillage® and CFRE at Give Green Canada respectively.

The survey clearly showed that organizations are not doing enough.

According to van Bentum, this is a massive tactical budgetary error on the part of nonprofit and charitable boards everywhere.

van Bentum notes with regret that organizations cite a lack of human resources as the top reason they don't do more to seek out and appeal to potential legacy donors; this despite evidence in the survey that on average, bequest sizes are $50,000.

She said she hopes these numbers and the report as a whole "lights a fire under the leadership" in the nonprofit sector.

"We've been dilly-dallying in the legacy field for too long," van Bentum states. "For most charities, when the inevitable annual budget-cut exercise comes around, it's too easy to eliminate human and financial resources for gift planning. But it's the last thing that should be cut. It takes courage by an [executive director] to hang in there. And it helps if they have an advocate at the board level who also gets it and will fight to keep the bequest program going."

The irony is, she says, that legacy programs are not expensive to run when compared to the "cost-to-contribution ratios" of other fundraising forms. "In fact they have the lowest cost-to-contribution ratio in the entire field."

The survey results lend heft to her argument. One only needs to look at the numbers:

• 31% of respondents reported their organization's bequest program was just one to five years old
• 72% of these have fewer than two staff
• 38% have less than a $5,000 budget

...and yet:

• 44% have received between $50,000 and $250,000 over the past five years.

That's some bang for the buck. But it's nothing compared to organizations who have more mature bequest programs. Of the 34 per cent of respondents who reported their organizations had programs more than 15 years old, over half the respondents had three or more staff dedicated to bequests. Fifty seven percent of these organizations have received more than $5 million in legacy gifts over the past five years.

And it's precisely because these bequests are set to grow over the next few decades that fundraising experts worldwide are championing this survey as a clarion call for those who have neglected bequest programming thus far.

Don’t let this opportunity slip by

Daryl Upsall, former fundraising and marketing director for Greenpeace International and now an international fundraising consultant with his own organization based in Madrid, calls the gift planning study a "timely wake-up call."

Nonprofits around the world "better get their legacy/planned giving programs in place and up to full steam, otherwise they will lose the opportunity to raise many millions of dollars for their important causes. There are no longer any excuses. Invest in active legacy fundraising now," he writes via email.

Another expert, Malcolm Burrows, head of philanthropic advisory services at Scotia Private Client Group in Toronto, concurs.

"The focus on bequests may seem like a stale idea, but it could never be more relevant than it is today. The wave is coming."

Barbara Yeager, editor of US-based The Journal of Gift Planning, upon reviewing the report said that every donor should be courted by charities and nonprofits as a potential legacy client.

"The focus on bequests may seem like a stale idea, but it could never be more relevant than it is today. The wave is coming," he says. "Envisioning & Investing in Legacy and Bequest Opportunities is a study that provides data and insights for charities to make the case to pursue the most important type of future gift: the bequest."

"Legacy gifts allow donors to tell a charitable organization, ‘I love you like a member of my family. I'm proud of your work. I want you keep at it, long after I'm gone,'" she says.

Yeager adds that according to research conducted by the Indianapolis-based Partnership for Philanthropic Planning, less than 10 per cent of Americans have actually made a charitable bequest, while more than 80 per cent "support charitable organizations during their lifetimes."

"Every one of those current donors should be asked for a bequest, and the International Gift Planning Survey demonstrates the return on investment for organizations that devote resources to involving, asking and thanking their donors over the long term," she states.

Sherlockian methods needed

So how should a charity or nonprofit pursue bequests?

The art is still a bit of a mystery, though the pursuit of legacy donors should be active at all times, says van Bentum.

She counsels that in order to start receiving bequests, charities need to let volunteers and donors know that their organizations actually welcome legacies.

"Over the past few decades a lot of charities have simply received bequests out of the blue, or as we say 'over the transom', often from people they didn't have any direct contact with, as far as they could tell," she says, adding that it's not unheard of for these bequests to be for very large sums of money, many times up in the six-figure range.

This is when the "Sherlock Holmes element" comes into bequest fundraising, van Bentum says. "You need to do a bit of detective work to try and find out what motivated the donor to leave the legacy. If you discover what motivated them to make such a vital gift, you might be able to find more like-minded people who are still with us and market to them accordingly."

The report itself lays out what it calls enabling conditions and barriers to bequests.

On the enabling side, respondents cited such things as actively marketing your bequest program, routinely engaging with one's legacy circle, and saying "thank you", as effective means to retain and/or recruit bequests.

Common barriers were a lack of human resources, competition from short-term revenue generation sources, lack of a real program in place, or lack of support from senior management.

The report concludes with the following message of hope:

"There is still time. The window regarding the intergenerational transfer of wealth extends, according to some experts, to 2050. This gives organizations time to both think and act strategically when it comes to their long-term financial health."

But it also ends with warning, imploring leaders in the sector to become visionaries before it's too late for their organizations to reap the benefits of bequest planning.

"Leadership must make legacies a strategic priority because only then will resources be found. Ultimately, investing in legacies now will result in a more sustainable funding model for the entire sector."

As a last word, van Bentum wants it known that Give Green Canada has put together a free toolkit on how to start up and maintain a bequest program. "In certain provinces across the country we are also conducting one-on-one mentorships with environmental and conservation groups, at no charge to the organizations, thanks to our funders," she notes.

"Through our mentorship program, I'm working with many groups across the country right now who, in a very short space of time, have put together simple bequest brochures, enhanced their web pages for outreach to donors...all on a shoestring budget. It was simply the allocation of a small amount of staff time that made this possible, and I know these groups will begin to see results in the near future."

This article was published in Charity Village, 7th June 2011.

Check out the following links:

Your Planned Giving program has been approved — now what?

Fundraising Q&A: How to Market Tribute Gifts and Planned Giving

Research Section: Planned Giving