Tapping into a New Income Stream in Uncertain Times
Much of gift planning (though not all) encourages donors to make future giving commitments to their favorite nonprofits, usually through wills or trust documents. This type of giving can be a transformative tool for organizations aiming to generate a reliable income stream, even during seasons of economic uncertainty.
In times of economic scarcity, donors are more likely to preserve their income and less likely to make larger outright donations to their favorite organizations. However, gift planning provides a number of alternative ways for donors to give to their favorite causes without interrupting their cash flow. By including organizations in their estate planning efforts, donors can make impactful future gifts and support their chosen causes for years to come.
One of the primary benefits of gift planning is in its long-range reliability. Unlike immediate donations from disposable income, planned gifts can provide a somewhat predictable income stream that help nonprofits weather economic downturns. Organizations actively building their programs can use the income generated from planned gifts to fund ongoing enterprises or cover operating expenses. Moreover, planned gifts are often transformative for organizations and empower them to invest in new initiatives, as the size of the average bequest is more than $70,000/household. These larger gifts can be especially valuable, even life saving, during times of economic instability.
The Current Challenge
The challenge is in the building of your program to acquire these larger future gift commitments. Yes, this is a new income stream waiting to be tapped, but without doing the necessary work today, these future gifts will remain mostly dormant and never materialize. Running a planned giving program requires patience, consistent stewardship, a certain knowledge base of the alternative ways of giving, collaboration with professional advisors and, above all, commitment from leadership. The workload is significant, but the rewards will far exceed the costs.
Even during a season of economic hardship, future giving from estate wealth or planned giving can provide organizations with a sustainable source of otherwise untapped revenue to help them achieve their viable missions and continue to make a lasting impact in their communities. With leadership support and strong professional advisor collaboration, a gift planning program can make the sustainable difference for any organization’s longevity.