In the previous blog I explained why the fulfillment rate of donor bequests was either good news or bad news, depending primarily on whether your organization has a progressive or regressive approach—that is, whether or not organizational leaders truly believe they can have a positive influence on revocable commitments.

My experience is from both the donor and organizational perspectives. For over 35 years I’ve had thousands of confidential conversations with donors and with organization leaders. When an estate plan we’ve worked on with a charitable gift is activated, we usually hear about it. When a gift is revoked, we often hear about that too.

I want to finish my thoughts about bequest retention with a few practical suggestions on how the best fund-development departments beat the odds and prove that the negative statistics do not apply to them.

1. Purpose and Values Clarification Process vs. Transactional Approach We begin THE PROCESS for each estate plan with several meetings to discuss what donors want to accomplish and why. We ask questions about the needs and concerns of the donors and for their heirs, as well as their feelings about purpose, values, and legacy. Only when those issues are decided do we address taxes and wealth-transfer strategies. The results of this thoughtful and deliberate the process is that donors make better decisions and are far less likely to have second thoughts.

In contrast, a transactional approach in which the conversation is driven by questions of how to most efficiently pass on “the money,” donors’ charitable intentions typically become an afterthought—decisions they are more likely to revisit as time passes.

2. Ongoing Cultivation After a Bequest
The story of the donor in the previous blog post is an extreme example of not following through on a bequest notification. On the positive side, an ongoing commitment to donor cultivation after a bequest can have the same impact as a deliberate purpose-and-values clarification process before the bequest. Continuing to recognize and show appreciation for what donors’ bequests will accomplish, keeps the vision fresh in their minds.

The results of this thoughtful and deliberate the process is that donors make better decisions and are far less likely to have second thoughts.

There can also be an unintended (and what some might consider) an unwelcome result of continuing to acknowledge and discuss a bequest after it is made. The more you talk about it, the more likely the unrestricted gift turns into a designated gift. Contrary to what some leaders think, that’s not necessarily a bad thing.

We consistently see this scenario: The more donors’ philanthropic purposes are clearly defined—

a) the more likely they are to make bequests,

b) the less likely they are to change their minds (revoke the bequests), and

c) the larger (or more generous) those bequests tend to be.

In fact, it’s not unusual for donors to begin looking for ways to increase their investment; in particular, funding an initiative when it’s designated as part of their legacy. In other words, turning a $1 million bequest for a hospital’s general fund into a designated gift of nursing scholarships almost guarantees its realization.

3. Legacy Society vs. Inner Circle
Some organizations want to acknowledge future bequests or current major gifts by making donors a part of a legacy society or by including them in a published list of donors. We’ve talked a lot about this approach among our team as well as with client organizations. It’s not a bad idea but not nearly as effective as some have hoped. While corporate donors require public acknowledgement, for every individual donor who wants to be publicly recognized, there are (by my estimate) a dozen who would much rather fly under the radar. The reasons are obvious.

Those who have made bequests begin to think of the organization in the first person instead of the third person—as “US” rather than as “THEM.”

What donors do want and what organizations are trying to accomplish with a legacy society is access and identification. One of the most powerful forms of recognition for a major gift or bequest is making donors feel they are genuine members of an inner circle. This sense of inner-circle inclusion is an effective donor-relations strategy because major donors and those who have made bequests begin to think of the organization in the first person instead of the third person—as “US” rather than as “THEM.”

4. Mission Faithfulness
One of the primary reason donors change future-gift commitments is what they consider to be lack of mission faithfulness. I’ve witnessed this close up on several occasions. Changing realities in society sometimes cause organizational leaders to alter their mission. In some cases, the changes were completely appropriate. Other times, maybe not so much. But that’s a matter of opinion, and you know how opinions go… all over the place. The point is, whenever you alter the organization’s mission, you have to start over making the case for that new mission to your entire donor-base, including those with bequests in their estate plans. These older donors are often most critical of organizational mission creep. Because of the size of these potential gifts, I would give special attention to older donors (those most likely to have made a bequest) in the wake of any significant organization mission change.

5. Choosing Wisely
Most consider leadership turnover to be an unavoidable result of hiring top candidates with promising career potential. Sometimes, however, the candidate with a proven passion for the mission is a better choice than the one promising quick and impressive results. With regard to bequest retention rate, here’s why.

One of the chief reasons donors change their estate-planning bequests is a new leader who doesn’t connect with them. There can be a lot of reasons for the disconnect. In the case of new leaders who consider themselves turnaround specialists, they’re the ones most likely to focus exclusively on current gifts. Potential planned-giving candidates and even those who have already made bequests are not a high priority.

Can I trust that a future leader will do a good job of managing the organization and my gift?

The best way to insure the fulfillment of bequests is to have a well thought-out succession plan. Working on one in the wake of a departure is way too late. Board members can and have torpedoed bequest retention rates by their leadership selections. They need to keep in mind that every leadership change makes a statement about the long-term stability of the organization.

To those who have or who are contemplating planned gifts, the primary question is: Can I trust that a future leader will do a good job of managing the organization and my gift? If the answer is no or we don’t know, that’s when they begin to question their bequest decision.

Eddie Thompson, Ed.D.
Founder and CEO, Thompson & Associates
Copyright 2016, R. Edward Thompson