Answering Donor’s Questions

October 15, 2008       Mike Patterson      

When a gift planning officer gets a call from a prospective donor, the officer must be prepared to answer questions ranging from the mundane to the arcane.

The caller might want to know how much a charitable gift annuity pays. The question might be the amount of the tax deduction if a term-of-years Charitable Remainder Unitrust is set up. What is a Charitable Lead Trust? Or, what are the benefits of an Annuity Trust versus a Unitrust?

If the gift officer doesn’t have an answer on the tip of the tongue, just power up a computer, run a software program and an accurate answer is available within a minute or two.

With the software on the market today, gift planners can generate calculations within minutes and accompany them with colorful illustrations, graphs and even audio-visual accessories that explain complex concepts to experts and laypersons alike.

Perhaps the greatest advance in software has been its evolution from a product that produced basic calculations to today’s versatile tool that crunches the numbers and also generates elaborate marketing presentations that visually illustrate gift scenarios and motivate donors to give.

This has been accompanied by user-friendly programs that have opened up gift planning to the general fundraising practitioner while still providing state-of-the-art performance for even the most advanced professionals.

"The purpose of planned-giving calculations and marketing software has evolved from a tool that only a planned giving professional could use when talking with donors and their planners to a tool that any development officer or planner can use with their donors," said Gary M. Pforzheimer, president of PG Calc, a Cambridge, Mass.-based software company.

Planned giving software serves three essential functions in the nonprofit world. As a marketing tool, it produces visual and written information to help prospective donors, planned giving officers and professional advisors review gift scenarios. As a closing tool, it generates the calculations and contracts required to complete gift agreements; and finally, as an administration tool, software keeps track of hundreds of donors, gifts, payments, tax forms and even cuts checks.

Two of the nation’s leading providers of planned giving software — PG Calc and Crescendo Interactive — offer products that serve all three functions. The development of their products is light years away from the age when a development officer would visit a prospect, sit at a kitchen table and sketch out a gift plan on a yellow tablet. Today’s gift officer may still sit at the kitchen table, but is more apt to be armed with a laptop computer that offers the capabilities to review a gift proposal with the prospect and run variables within minutes.

Moreover, depending on choice of software, a planned giving officer can even let prospects run their own planned giving slide show, complete with an audio narration. And if a question arises that stumps the development officer, a virtual legal library is a click away and an answer is available within seconds.

Perhaps the greatest area of growth for software providers has been tied to the burgeoning popularity of the Internet. Most nonprofit organizations have their own Web sites, and many of these sites have sections for planned giving.

PG Calc and Crescendo have both developed software that is designed to run off an organization’s own Web site. This has thrown open the doors of planned giving to the donors themselves. Now, rather than depending on gift planners or professional advisers to provide them information, donors can explore the world of planned giving to their heart’s content, even running their own gift illustrations and proposals.

One job that keeps the software companies busy is the periodic updating of their products to comply with the latest tax regulations and any changes in charitable gift annuity rates. Software designers also continue to develop new features suggested by their clients. For example, PG Calc recently added a feature that allows Planned Giving Manager, the company’s major calculation and marketing software, to compare gifts funded with different principal amounts side-by-side, upgraded its look and feel with a larger screen and an initial menu and improved help system with slide shows that animate the explanations for some of the key concepts in the software, Pforzheimer said.

Crescendo, meanwhile, is adding new formats or ways of receiving presentations. "For those donors who have visual impairment, there now is the option to print the flow chart with a large print," said Charles Schultz, president and CEO of Crescendo, the Camarillo, Calif.-based company. In addition, many illustrations can be emailed to donors and their advisors, he said. At Crescendo, Video Help is now available with Crescendo Pro, Estate or Lite — its three calculation and marketing products. The Video Help program combines Crescendo with the on-demand video explanations from GiftCollege, the firm’s on-line planned giving learning program.

"With a simple ‘click and view’ method, a Crescendo user now can have a video explanation of any planned gift," Schultz said.

Once planned gifts are received, they must be administered either by the organization or financial institution. Crescendo’s Admin and PG Calc’s GiftWrap are PC-based software products that administer gift annuities, including producing checks, tax forms and donor tracking.

One firm that specializes exclusively in gift administration software is BIPS LLC. "BIPS starts with counting all future planned gifts," said Susan DameGreene, president of BIPS, based in Salem, Mass. She defined a future planned gift as a donor who has told the nonprofit that they are named in a document and that the donor is still alive.

Counting future gifts, she explained, helps the nonprofit steward the donor.

BIPS has added a new feature that gives the nonprofit the ability to actuarially project those gifts, so the organization can report what future planned gifts are in the pipeline, when they are expected to come into the organization, and what they are worth to the nonprofit.

Another feature of BIPS is that it helps nonprofits account for and collect on realized planned gifts in a timely manner. And finally, BIPS serves as a storage facility for all gifts that are collected, providing data access for financial, marketing and accounting purposes, resulting in the ability to generate real statistical data on donors.

BIPS is moving to a database that will allow more stability and greater numbers of estates to be tracked, as well as planning a Web-based version of BIPS.

Another firm involved in the planned gift administration area is Fiduciary Technology Partners, whose PGFundConnection system is described by President Sam Whittle as allowing federations and foundations to "integrate fully automated investment processing with federation recordkeeping."

He explained that the program is designed to help minimize "the daily back-office administrative work of running your planned giving operations. This platform allows clients to integrate existing custodians, investment managers, advisors and brokers to provide seamless processing of all investment-related activities and support daily reconciliation of these activities back to donor recordkeeping and general ledger entries."

According to Whittle, PGFundConnection supports gift solicitation and processing, investment management, donor recordkeeping and grant processing, tracking and reporting.

"All of this is accomplished in a 100 percent real-time, Web-based environment providing all relevant stakeholders with unparalleled access to information," he said of the New York-based company’s product.

Projecting into the future, software advancements are certainly on the horizon. "I foresee a continued drive toward software integration, toward expanding and extending the ways that different software can talk to each other and leverage each other’s strengths," said Pforzheimer. "I also foresee increased use of the Web as a software platform."

"The planned giving world and philanthropy in general are becoming more integrated into the overall wealth management and planning of individuals and this trend will continue to drive development of software," Whittle said. "Planned giving software will become more and more integrated into the online world and also the mainstream financial world in ways we cannot really foresee right now."

Although software has made the gift planner’s life much easier than in the early days of planned giving, Schultz offered some advice for fundraisers: "A gift planner is successful because he or she is able to build a bond of trust with donors," he said. "This ‘high-touch’ relationship building by accomplished gift planners always will be an essential part of planned giving success."

In a high touch-high tech world "there are three ways that technology can help build a high-touch relationship. These are donor-friendly illustrations, gift-closing help and gift education," he said. "Gift planners with all three capabilities will maximize the bond of trust with donors and work effectively with their professional advisors to close major gifts." NPT