NPT Instant Fundraising Newsletter

By Cathy Finney
Every fundraiser knows the trend: as donors start to think about making or have made their estate plans, many consolidate or even wholly discontinue their annual giving. Whether they're adjusting to a fixed income or simply believe that having made allowances for the organization in their lifetime plans is enough, the annual gifts stop coming in. This "quiet period" is observed across many different organizations.

For organizations that rely on the communication power of direct response, three things can happen to donors who slow or stop their annual giving at this life stage:

1) First, they fall into lapsed pools. After a renewal series tries and fails to recover the annual gift, these once-loyal donors start to receive lapsed treatments which are increasingly dunning. Lapsed messages contain phrases like: "We haven't heard from you in while" ... or, "We still need you."

These messages tend to alienate donors who might not even feel as though they are lapsed and say to them, in effect, "What you're doing isn't enough." Many of these donors could have already made provisions for your organization in their wills or estates plans -- the ultimate gift -- and whether or not you're aware of these plans, expect you to treat them accordingly.

2) After multiple attempts at treating the donor as lapsed, these donors might then be cycled back into acquisition efforts, where despite having been a long-time donor earlier in their lifetime, they are now spoken to as if they've never been supportive at all or are not recognized as a dedicated donor. Now, not only are organizations spending far more to try to reinstate this gift, but they are further neglecting what once was a valuable donor.

3) The final stage in this alienating process -- "going dark" -- removes them not only from any solicitations, but also from other valuable communications tools like newsletters, magazines, holiday card mailings or program updates.

All communication with them is cut off, assuming they are no longer interested in our causes or not worth the investment of our resources when in fact they may have made a life commitment to us. When in fact, they still care.

Mining lapsed pools for highly committed donors is the first step in identifying planned giving donors. Though the definition of a lapsed donor varies between organizations, some larger organizations can have lapsed files in the multi-millions of donors. Obviously contacting all of these donors is extraordinarily cost prohibitive.

But you need to search for those among the lapsed who are still committed to the organization and might have made planned gifts, yet have not announced their intentions. You need to communicate with them appropriately, reassuring them that the decision they have made to support the organization even after they've passed on, is the right one.

Identifying donors who have made planned gifts to our institutions can be an uphill climb. Many organizations believe they know of only a fraction of the donors who intend to make planned gifts to them.

According to Paul Seifert, senior vice president of gift planning at St. Jude Children's Research Hospital in Memphis, the hospital's data shows that only one in seven donors who has made a lifetime commitment has let them know in advance. The reasons for this phenomenon are innumerable: some might think that sharing that information is too personal; others continually make changes to their wills and don't want to get an organization's hopes up; others don't think that their gifts are significant enough to warrant announcing their intentions, they simply wish to remain anonymous; or, they don't understand the importance of notifying organizations of their plans.

Being notified of a donor's intention to make a bequest gives your organization an incredible advantage. It allows you to both thank the donor for their intended gift, and continue to cultivate them -- giving you the ability to increase a donor's intended donation exponentially with the proper communication.

Organizations have found great success in increasing donor's planned gift amounts by cultivating them once they've been notified. In fact, Seifert said that he has seen marked increases in average planned gifts after as few as one to 10 contacts, be it a personal visit, telephone call or written correspondence. Positive interactions with those constituents who are making or have made their plans, and even after those plans are made, can help us realize exponentially increased estate gifts.

For today's direct marketing driven organizations, huge pools of lapsed donors represent a challenge -- who to select for renewal efforts, who to include in acquisition and who to leave alone. Too often, potential planned gift donors fall into these lapsed pools and are left to sink or swim. These pools need to be mined for planned gift prospects, not simply using RFM, but also digging deeper looking for other identifiers of commitment to the organization.

At St. Jude, fully 65 percent of annual planned gifts are from donors who had not made a gift during the past 12 months. There are often lengthy periods of time between a donor's last annual gift and their death, at which time an organization receives notice of the donor's gift. In fact, the older the person is at which time they pass, the longer the gap is between the time of their last gift and receipt of their planned gift.

Financially and strategically, trying to target the entire lapsed pool to find your planned gifts is not feasible. Therefore we need to find other indicators that help us focus our efforts by looking for other identifiers of commitment to the organization.

Focusing the search for potential planned giving donors by doing something as simple as an age overlay can help us identify those lapsed donors who might be in that age-range to make a planned gift, and that should be a first step.

An alternative approach involves using analytics. According to Mary Beth McIntyre, senior strategic advisor to Cambridge, Mass.-based Target Analysis Group, analytics goes beyond looking at the traditional variables of age and giving histories. Instead it combines a variety of giving attributes with a focus on other "touch points" and interactions donors may have with the organization. This includes whether a donor has attended or sponsored events, served on committees, visited your Web site, has a self-reported affinity with the mission or has shared their opinions with your organization.

These donors with passion are the donors who will proactively stay in touch with you. They'll tell you when they are moving. And, a donor who shares this info is seven times more likely to make a provision for your organization in their will, according to Target Analysis Group.

Though donors may be lapsed, this could simply be a sign that they are consolidating their giving and considering making their estate plans. Using passion and age together could help you segment out those donors and test treatments that might help them stay connected with the mission and not be forgotten.

This type of analytic approach is not limited to mining your donors (lapsed or not) for planned giving, but is another arrow in your quiver when trying to identify the most passionate donor segments to target other aspects of your development efforts (major giving or identification of volunteers).

Taking a look at these behaviors among your lapsed and long-lapsed files might help you identify your unidentified planned giving donors. Not all will want to be found, but for those you can identify, you will be able to communicate appropriately and you will be able to increase their value to your organization as a result.

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Cathy Finney is associate vice president of MINDset direct in Arlington, Va. She can be reached at cfinney@mindsetdirect.com or through www.mindsetdirect.com