AFP Hudson-Mohawk Chapter & Gift Planning Group of Northeastern New York National Philanthropy Day...

Gift Planning’s Future

AFP Hudson-Mohawk Chapter & Gift Planning Group of Northeastern New York

National Philanthropy DayNovember 15, 2013

A Contemporary History ofToday’s Gift Planning

Practice

Steenhuysen Associates 2013

Before 1988 gift planning knowledge existed at local chapters

In 1988 the National Committee for Planned Giving was created to serve the local councils◦ National leadership◦ Educational excellence


Into the 1980s

NCPG grew at a pace of 1000 members each year

Planned Giving became a unique department within development

Planned Giving became a prized career path for fundraisers

Planned Giving’s growth was fueled by broad asset appreciation


During the 1990s

The tech bubble burst… Once asset appreciation ended, so did gift

planning’s rise. NCPG’s membership declined NCPG commissioned a study of the practice


In the 2000s

NCPG Strategic Directions Taskforce

Study Findings


More fundraisers than ever are practicing gift planning – just not fulltime

Increasing emphasis on current dollars has shifted budget money away from gift planning investment

Tax law changes contributed to the decline of gift planning – lower taxes


The Practice of Gift Planning

Planned giving information is everywhere Gift planning officers can no longer control

the process A majority of charities do not have

specialized gift planning staff For most charities, planned giving is no

longer a separate specialty


Gift Planning Officers

Blended gifts are on the rise among principal/mega gifts

Lack of knowledge by major gift/principal gift officers has lead to missed gift opportunities

The gift planning officer is not brought into the planning for the largest gift solicitations


Principal Gift/Major Gift Officers

Better collaboration between planned gift officers and professional advisors, yet an element of distrust remains

Professional advisors ◦ Provide holistic planning◦ Are directing more donor planned gift decisions◦ Structure gifts without any charity involvement ◦ Can defer immediate gifts into deferred gifts with

assets under management


Professional Advisors & Gift Planning

Do professional advisors and gift planning officers create the same value?

Advisors conserve financial resources thru tax planning, legal structures or asset replacement

Gift planning officers/fundraisers create satisfaction

Charitable giving at its core is an emotional act


Professional Advisors & Gift Planning Officers

Broaden the definition of a gift planner to include part-time practitioners

Expand the practice of gift planning beyond how and when to include purpose and motivation

Change the name of NCPG to Partnership for Philanthropic Planning

Then the bottom fell out of the market…


Result of the Study

AFP – Why the gift should be made◦ Mission◦ Motivation◦ Recipient

PPP – How the gift will be structured◦ Comprised of what?◦ When should the gift be made?


AFP & PPP Members Then

Convergence in practice between AFP members and PPP members

AFP & PPP are coming to the same practice: Philanthropy

We are focusing on the meaning giving creates


AFP & PPP Members Now

Gift planning’s future is the same as all other

fundraisers

Creating meaning through a process of philanthropy



Demographics of U.S. Wealth

Population Percent

Share of Wealth

Their Issues Motivation

Ninety Third Passion Mission

Nine Third Taxes Tax Mitigation

One Third Control Family/Legacy

Those that express luck, blessing, right-place right-time, etc about wealth creation

They do not have the illusion that their wealth occurred entirely under their own power


Who will give?

The last half of the last century was about bringing to the masses the tools of the rich◦ Car phone◦ Pager◦ Credit ◦ Philanthropy


UHNW Services to the Masses

Philanthropic platforms Donor or philanthropist Eight unspoken motivations A philanthropic planning process


One & Nine Percent Donors

Private foundation Operating foundation Donor advised fund account


Philanthropic Platforms

The difference has nothing to do with financial capacity.

Donors are reactive; philanthropists are proactive

Exploring Intentionality


Donor or Philanthropist?

Donors◦ Don’t need structure◦ No structure, no engagement◦ Doesn’t require vision

Philanthropists◦ Find structure useful◦ Will engage in a process◦ Will engage assistance


Why the Difference Matters To You

Measuring Intentionality Key Activity Philanthropist Donor

Collect proposals

Seeks Receives

Evaluate requests

Values Feelings

Award Grants Systematic Random

Charitable Mission

Thoughtful Reactive


Ask the prospect to share several significant gift stories

Use the prospect’s gift stories to determine if (s)he is a donor or a philanthropist

Probe the stories for additional detail Rate donor activity in each skill area


Evaluate the Prospect

Identify three gift stories.◦ Need enough information to perform sufficient

analysis.◦ By having several stories, you have places to go if

you get stuck on a particular story. “Tell me about a gift you made in the last

two years that …◦ Gave you a feeling of satisfaction.”◦ Made a difference.”◦ Gave you a feeling of excitement.”


Sample Starter Questions

How did you find that charity/program?

Tips Reactive if responding to mail, calls or visits Proactive if reaching out to the charity


Collect Proposals: Probe and Tips

What was the basis for your decision to make that gift?

Tips Reactive if based on a feeling or a desire to

“own the story” Proactive if the project/program represented

a value in action


Evaluate Requests: Probe and Tips

How did that gift fit into your overall pattern of giving?

Tips Reactive if no connectivity to other gifts Proactive if gift is part of a similar series


Award Grants: Probe and Tips

What is your criteria for making a gift?

Tips Reactive if reasons are general or emotional Proactive if reasons are specific and

detailed


Charitable Mission: Probe and Tips

1. Open topic with the lead question.2. Gain a general understanding of the

situation.3. Probe for detail on the key activity.4. Always push for the pronoun “I”.


Probe Process

Exploring MotivationsWhat REALLY Motivates a Philanthropist?


The myth of donor fatigue What prospect/philanthropists really want

◦ Unspoken expectations◦ More than a feeling

Eight expectations and what to do about it


Motivating Expectations

Supporting an organization or place you care about

Helping that organization ◦ Volunteer leadership◦ Endowment gifts

Critical Issue: Be careful to document your charitable intent.


Charitable Intent

Getting people to believe what you believe Perpetuating your worldview

◦ Find an organization that shares your belief◦ A strategy to persuade others

Critical Issue: Finding an organization that successfully measures how many people actually changed.


Values

Cause change through charitable gifts Getting results:

◦ Determine what organization to work with ◦ Decide how to cause change

structural change new programs

Critical Issue: Clarity in understanding how the organization you work with agrees on the change you seek to create.


Leverage

Influencing others to give Looking for other funders

◦ “Buying a table at the gala” ◦ Persuade others to consider the organization◦ Personally ask others to give◦ Challenge grants

Critical Issue: Choose your mechanism for modeling to ensure you actually achieve your outcome.


Role Model

Philanthropy as a communication tool◦ Bring family into your practice of philanthropy◦ Communicate your values◦ Build a common purpose in multiple generations◦ Build skills with family members

Have a meaningful structure

Critical Issue: Determine if it is about the family or your philanthropy.


Family

Becoming an expert in the cause you care about

Get smarter about your passion◦ Use philanthropy to gain access to expertise◦ Gifts as tuition

Critical Issue: Make sure the money gets you access to the smart people and be cautious of umbrella organizations.


Expert

Milestones of a life that has had impact Naming things:

◦ Scholarships◦ Buildings◦ Departments◦ Endowments

Foundations can be used as legacies

Critical Issue: Consider future issues when naming things.


Legacy

Internal milestones in the use of time, talent and treasure

Moving from success to significance◦ Identify what is significant ◦ Determine how to measure it◦ Plan to transition from success activities to

significant activities

Critical Issue: Getting the process right: Treasure, then Talent, and finally Time.


Significance

Where will donors get the advice they desire?


Perception of wealth loss Advisors 15% Clients 90%

What does this mean for Philanthropy?


Registered Rep/Prince Associates

Registered Rep & Prince Associates ©2005

Perceptions: planned giftAdvisor 45%Client 27.8%

What does this mean for Philanthropy?




Perceptions: meaningful giftAdvisor 1.8%Client34.8%

What does this mean for you?




The Big Question?


Who will seize the incoming philanthropic initiative in the

gold rush?

Among fundraising colleagues With your donor Alongside your donor’s professional

advisors


Role of the Charitable Gift Expert

Charitable giving creates a disproportionate experience of satisfaction for the donor.


Among fundraising colleagues With the donor Alongside the donor’s professional advisors


A Charitable Gift Expert

Your “dealflow” with charitable giving makes you an expert in philanthropy.

You create tremendous value. You create satisfaction. Never again be apologetic, timid or cowed

because of what you do. You are changing the world.


You as a Charitable Gift Expert

Questions?Jay Steenhuysen

Steenhuysen Associates1539 Fall River Ave., Suite 3

Seekonk, MA 02771508-336-4544

[email protected]

AFP Hudson-Mohawk Chapter & Gift Planning Group of Northeastern New York National Philanthropy Day...

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