Planned Giving: Institutional Memory Buried In Your Computers

June 15, 2012       Michele Donohue      

Every nonprofit already has a mountain of data. The donor database often leads to an organization’s own high-potential names and undiscovered planned giving donors. The database is much more than simply an organizational LinkedIn.

“When there is turnover of staff, it is your institutional donor memory,” said Bobby Dean, director of philanthropic resources at the University of Texas MD Anderson Cancer Center in Houston, Texas. “I believe that the database is a development office’s most valuable asset.”

Dean explained that it’s important that all development staff members are reminded and held accountable for entering accurate and meaningful data. “I can’t stress enough how urgent this is in terms of follow-up with donors and ultimately the ask,” he said.

While it might be frowned upon in social gatherings, asking a donor’s age is important when researching planned giving prospects. Start looking at donor age – that is, if you have it.

“One of the most important pieces of information that a nonprofit can be tracking in the database when it comes to planned giving is age, and, more often than not, this serves as the biggest gap in the donor profile,” said Faön M. Mahunik, director of research analytics at CCS fundraising and development consultancy in New York City.

“For some organizations — education, higher education, and sometimes healthcare organizations — age is readily available because of the nature of the relationship of the prospects to the organization,” Mahunik said. “Age is provided at the beginning of the relationship, for example, when a student applies for college, or when a patient is admitted to a hospital. For other organizations — advocacy, arts, associations, cultural, global relief, religious — age is something that isn’t often, or is rarely, collected.”

Age is often one of the best ways to begin sifting through the data to find potential planned giving donors.

“Investing in the resources to append age information to a database can serve as a jumping off point to identifying and segmenting prospects that are starting to think about planned giving, and those who currently have it on their radar,” she said.

Mahunik also recommended looking at recurring behaviors of donors to help sort out potential planned giving donors. “The most common statement you’ll hear about planned giving donors is that they are, more often than not, habitual annual fund donors,” she said. “But, other behaviors can also help paint that portrait — yearly memberships, event attendance, ticket buying, volunteering — all of these behaviors identify loyalty to an organization — and loyal giving is the key to planned giving.”

Mahunik suggested nonprofits expand the age range in most reports. “It’s also important to realize that the average age of those people making their will keeps dropping. Nonprofits should make sure their list of planned giving prospects expands to those donors who are under the age of 50,” she said. “In the past, people would only reach out/market to those donors 70 years or older for planned giving. We’ve found it makes the most sense to send planned giving education pieces to those who are significantly younger.”

Undiscovered planned giving donors are your best bets at finding high-potential donors who are already loyal to your organizations. You just need to look through the data and find them.

Putting good data in will make you have the best results when searching for planned giving donors. “Always enter clean data. If you do data overlays, when you upload the data into your database, place it into an additional field if possible and notate where that data came from,” said Dean.

“I can’t tell you how many times a donor gave me their date of birth or a phone number, and a random data overlay replaced the data,” he said.

Deciding what should be in a database shouldn’t be an issue. “Everything,” is what should be in it, according to Phyllis Freedman, president at SmartGiving in Washington, D.C. and author of The Planned Giving Blogger. “Let’s say you invite good donors to an event and someone RSVPs that they can’t attend. That should be noted in the file, because someone who bothers to decline is saying something about connectedness.”

Nonprofits should try to populate the database with as much personal information as possible. “Beyond giving information, being able to track event attendance, appeal response, family status information — Are they married? Do they have children/grandchildren? — are all important,” said Mahunik.

Outside of age and familial connections, Dean recommended asking donors’ motivation for giving and what other organizations the donors support.

“The number one thing to look for is evidence of passion for your cause or organization,” said Freedman. “That passion can be expressed by someone who is 35-years-old and created a (fundraising) team page and raised $2,500 for you from others and has given you their email address, a sign of trust and desire to be connected. Or, it can be someone who is now 80 and has been giving to you consistently, not necessarily consecutively, for 25 years.”

Tracking as many touch-points as possible will help you see a clearer picture of your donor. Peter H. Hansen, vice president of development at the New Jersey Performing Arts Center (NJPAC), Newark, N.J., explained that as a performing arts organization, having a holistic database that tracks multiple contacts with donors is essential. “In analyzing prospects for upgrades, the frequency of attendance is a critical indicator along with current level of consistent giving,” he said. The organization adapted an open source software program to pull data from its financial and event software to help them understand which donors, other than major donors, were their best customers, he explained.

Hansen explained that he looks at consistent annual supporters. Patrons giving for 10 years or more are most likely to make a planned gift. “Of course, examining capacity is critical for certain types of planned gifts. For the bequests and charitable gift annuities, I have found that modest donors/members who have supported NJPAC since it opened in 1997 have the highest likelihood of making such a commitment,” he said.

Hansen pointed to one long-standing member he met at a reception who was giving at a very modest level. “She had been giving consistently for over 10 years. It turns out that she was not married and had no heirs. When we mentioned providing for NJPAC in her estate plan, she became very interested and subsequently named NJPAC as the primary beneficiary of her estate,” he said.

Freedman also pointed to consistent giving over the years through various methods as one of the largest indicators of planned giving potential. “Giving across multiple channels — mail, online and events — can also be predictive. Monthly givers and major donors are also good prospects. It’s always best to combine giving with other indications of passion, to refine your audience. Most organizations have a limited budget to invest in planned giving so finding the best of the best is usually important,” she said.

Mahunik pointed out that the essential piece to mining your data is to track historically how planned givers were different from other donors — not other planned donors.

“It’s important to look at your database as a whole, not just at a specific segment of your database,” explained Mahunik. “You want to make sure to look at planned givers compared to other donors, as opposed to just planned givers to find out what makes them tick. That’s the key to data mining and modeling. It’s not predictive, important or helpful to know that 80 percent of your planned givers gave to a certain appeal, if 80 percent of your donors did as well.”