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  • Writer's pictureandyragone

Where the Money Is

The Greatest Gifts Come from Wealth, not Disposable Income

We LOVE our major gift donors…

So does every other nonprofit in town!

Think about it… a small pool of generous donors being sought after by every capital campaign endeavor or every frontline fundraiser who has been tasked with relationship building and convincing these generous donors why our cause is the most important. Ooof. Now that is a challenge! Furthermore, the spoils often go to the organizations with the greatest resources available to reach out and steward these mission-aligned and affluent unicorns.

Let’s take a deep breath, step back and ask, “What if there was another way?”

What if we found and prioritized an otherwise untapped revenue stream that could provide transformational amounts of income from not only our major donors but through a vast network of supporters that have not yet been relationally stewarded?

Planned Giving, or Gift Planning, allows donors to make larger gifts than what they may have been able to give during their lifetimes. The average amount given to nonprofits in the form of a bequest is $70,000. Of course, some bequests, beneficiary designation gifts, or other complex planned gifts can be much larger depending on each donor’s background, financial and family situation.

With an approximated $140 Trillion held in American wealth, less than 3% is held in cash or equivalent. That means more than 97% of American wealth is held in non-cash assets, such as real estate, equities, business interests and retirement plans. Nearly 30% of American wealth is held in retirement accounts, and more than $10 Trillion is held in traditional IRAs.

What if we could empower our donors to give from this wealth instead of disposable income?

When we ask for cash donations, we are asking donors to give from that less than 3% category of American wealth. That's a ridiculously thin slice of the American wealth pie. We are also asking donors to give from the scarcity of limited disposable income instead of the abundance of wealth that comes from non-cash assets. This is the reason why so many fundraisers work hard to steward major gift donors, since they are the ones with enough income to give larger amounts. Our fundraising efforts are focused on where we think the money is.

But… What if our fundraising efforts could tap into a much larger reservoir of wealth?

Pursuing major cash donors often rules out stewarding those who give less than a certain threshold. Since they don’t give large amounts of cash, we decide to spend our time elsewhere. However, what we as frontline fundraisers might be missing is the vast estate wealth that many of these smaller cash donors have. They might be living on a fixed retirement income or have lifestyle expenses that measure closely against their income, so donating from said income might be quite challenging for them. Yet, these can be the millionaires next door, living modestly with estates that easily go into the tens of millions.

If Americans have most of their wealth tied up in non-cash assets, doesn’t it make sense that the greatest gifts will not come from disposable income but from these assets? Moreover, if there are greater tax advantages that come with giving to nonprofits from asset wealth–incidentally, a cash gift is the most expensive way to give–then isn’t it reasonable to assert that building a robust planned giving program is worthwhile? After all, asset wealth is where the money is.

Helping our donors prepare for the future of their estates is the essence of charitable gift planning. We help these mission-aligned donors, as they aim to help their families and become more philanthropic along the way. Planned giving opens a whole new stream of future income that would have otherwise been transferred only to family and the government.

The greatest gifts come from wealth and not disposable income. The greatest gifts are asset wealth gifts… estate wealth gifts… planned gifts… because that is where the money is.

What could we accomplish if we helped our much broader pool of donors discover how to give from their wealth?

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