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Mission Matters Insights

5 Common Mistakes in Planned Giving

November 04, 2014

The key to planned giving is patience, awareness and preparation.

Establishing a planned giving program is the first step in ensuring that your not-for-profit organization is preparing effectively for the future. It is important to consider opportunities for raising capital at all times, and planned giving is a good start. There are a number of common mistakes that are helpful to be aware of, however.

Common errors to avoid

Most nonprofit organizations find problems:

  1. Not planning effectively (budget especially)- Organizations must consider the funds necessary in growing and sustaining a planned giving program. In addition to letters to donors or articles in the company newsletter, planned giving committees need to establish formalized administration and policies and leadership. Keep in mind that funds are typically not allocated for items like marketing and advertising materials, seminars, professional asset management, etc.
  2. Not having adequate support from the Board- Make sure that the Board is fully supportive of the planned giving committee. Board members are responsible for approving budgets, establishing gift acceptance policies, and leading fundraising campaigns, so their support is vital to the success of the program.
  3. Not being aware of IRS codes, general rules about Planned Giving- It is crucial that committee members know state rules and regulations, IRS code, and the most effective ways to market the planned giving program to prospective clients. It is important that the organization gives proper guidance to the committee and makes sure they are aware of permit requirements, annuity agreements, etc.
  4. Not treating committee members fairly- The organization must give committee members an adequate amount of work, while not weighing them down with responsibility. Keep your expectations of committee members in check many will not be able to raise the planned gifts, run without staff support, or be experts in the subject. Committee members must be given proper training and education about proper gift planning ethics and committee members shouldn’t be expected to acquire gifts from their own clients.
  5. Not being patient- The planned giving committee must have a clear purpose, and be willing to wait for results. Starting a planned giving program without intentions to carry it out will waste time, money, and resources. Studies have shown that programs often take time to achieve results- make sure you have a long term commitment to the project.

Planned giving is built on effective planning and enthusiastic marketing. Once prospects are targeted and identified, and relationships are fostered, asking for the gift will come easily.

For more information on planned giving programs, please read our whitepaper “Planned Giving” or contact any member of KLR’s Not-For-Profit Team.

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