Study Shows Big Hike in Planned Giving

Personal visits and aggressive distribution of publications have helped charities see an increase in charitable bequests and charitable remainder trusts.

And, according to Planned Giving in the United States 2000, a survey of 170,000 households in the United States, 45 percent of donors first hear about charitable bequests from a charity.

The study was funded by the David & Lucille Packard Foundation, along with Indianapolis-based National Committee on Planned Giving (NCPG) and a donor who asked to be anonymous. It was conducted by NFO Research of Toledo, Ohio.

The study’s main focus was to get a better understanding of levels of bequests, gift annuities and charitable remainder trusts (CRTs), and to identify the trends since a similar 1992 study.

The survey process was twofold, with a multicard screener mailed to 150,000 panel households in January, 2000. A second customized postcard screener was mailed a month later to 20,000 panel households picked on the basis of high income and high wealth.

There was a 65 percent total return rate (110,547 households) with 91,019 providing an answer to questions regarding charitable giving.

That process enabled NFO Research to identify 10,886 planned gift donors. A four-page questionnaire was mailed to 4,235 of these donors in April.

Of the April mailings, 37 percent (or 1,579) returned the surveys, resulting in planned gift totals of 782 bequests, 370 charitable gift annuities and 427 CRTs.

According to the study, 34 percent of the responders said that they first heard about bequest giving from published materials of a charity, while 11 percent said first knowledge was as a result of an individual visit from someone representing the charity.

The study of planned giving donor behavior is the first since NCPG’s 1992 report during which only 5 percent of respondents said that they heard of charitable bequests from the charity.

"All of you who publish brochures and all of the charities that send out those brochures should be very pleased with those numbers because it says somebody is reading them," said Bruce E. Bigelow, senior vice president for development and external relations of Fredrick, Md.-based Hood College. He is also a member of the NCPG research committee and was one of the speakers presenting survey data during the recent NCPG Conference in Orlando, Fla.

During the past eight years, Bigelow said, published materials have influenced not only those donors who have had long-term relationships with a particular charity but also people who have never had any contact with them at all.

Although charities’ published materials comprise a large portion of how donors first hear about charitable bequests, personal visits are also important. "What do we spend most of our time doing as representatives of charities?" Bigelow asked a room-filled audience. "Coming to Florida, in the winter, of course, and visiting our donors. People in fact do take action as a result of the visits that we make," he added.

According to Scott Lumpkin, associate vice chancellor for university advancement at the University of Denver in Colorado and NCPG research committee member, legal and financial advisors are equally responsible in how people hear about charitable bequests. Some 21 percent of respondents to the survey said they first heard about bequests from a financial or legal advisor. Next on that list is family and friends at 20 percent.

"Last time (in 1992) family and friends was one of the highest numbers, the highest answers to this particular question," Lumpkin explained. "So that’s a big change."

"We found that there has been an increased incidence of planned giving going on in this country… That’s good news," Bigelow said.

According to the survey, 8 percent of respondents have made a charitable bequest, up from 5.7 percent in 1992.

Also, a new question regarding people’s consideration of making one of the three gifts (a will, charitable bequest, or CRT) was asked. Some 14 percent of the respondents said they were considering making a charitable bequest. Only five percent were considering setting up a CRT, and 57 percent were considering making a charity part of their wills.

Another promising aspect of the survey is that only seven percent of the people questioned never heard of a bequest.

"And this is good news, only 12 percent never heard of a charitable remainder trust," Bigelow said. "I would have expected a much higher number in that."

One of the surprising trends discovered during the research, according to Bigelow, was the number of younger planned givers. "We found that some of our donors are in fact younger. That was one of the surprises from the 1992 study."

He noted that a healthy percentage of people younger than age 55 have already set up a charitable bequest, charitable gift annuity, or CRT (3 percent age 18-34, 14 percent age 35-44, and 26 percent age 45-54).

The average age that people make their first will is 44, according to Bigelow, and even more importantly the average age of a donor’s first charitable bequest is 49.

"How old are you when you go back to your 25th reunion," Bigelow asked? "Forty-seven, a good time to be talking to people about charitable bequests."

Charitable motivation

The survey showed that people are motivated by a mixed group of ideas. There is not simply one thing that causes people to put a charity in their will or to establish a CRT.

But the number one motivating factor, both in 1992, and in 2000, is the impact on the charity’s mission.

"Probably the (main) issue for people when we ask them what is it that motivates you to make a gift? We find, of course, that people are motivated by a group of mixed motivations," said Bigelow.

Charity’s knowledge of bequests

The survey found that, just as in 1992, many of these gifts are taking place without charity involvement and, in fact, without charities’ knowledge.

"We found that among bequest donors — remember these are bequests already in the will — in 1992 only a quarter of the bequest donors had let the charity know that it was in the will," Bigelow said. "So there were three times as many bequests out there as charities already knew about."

In NCPG’s 2000 survey, it was found that charities know about bequests more frequently, but there are still two out there that organizations don’t know about for every one that they do.

"CRT donors … We found that for every trust the charity is aware of there is another trust out there that we are not," Bigelow said.

The majority of respondents to the survey (53 percent) cited that they did not want attention as the reason they did not tell the charity of their bequest. Privacy concerns came in second at 15 percent, while not wanting to be solicited for additional gifts was next at 13 percent.

Rounding out the reasons were: may change mind or charities at 5 percent; not important or doesn’t make a difference at 4 percent; and no answer also at 4 percent.

More than two-thirds of the people who have made planned gifts have also made a cash gift to charity. The question was not asked in the 1992 survey.

Some 72 percent of the donors who have put charities in their wills have also made a cash donation. And, 67 percent of those who have established charitable remainder trusts have also made a cash gift to charity.

"If you look at the inverse of those numbers … Still a quarter of the bequests out there are people who have never made a gift at all to the charities who are in their wills and a third of those who have established CRTs to benefit those charities have never made a gift to those charities directly," said Bigelow.

Certain details of the report were not presented during the conference because data was still being tabulated, said Tanya Howe Johnson, executive director of NCPG. The full, published survey should be available by the end of the year she added.