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128 CGAs in One Month – Part two of The Real Planned Giving

By Tom Watson on August 13, 2008No Comment

This piece is a follow-up to my previous article on bequests and their dominance in planned giving revenue. 

 

In April 2008, when the news broke that the ACGA rates were going down, planned giving friends and I debated the wisdom of marketing this change before the June 30th, 2008 deadline.  After all, deadlines are usually good; donors tend to make their gifts in advance of December 31st to receive their income tax deductions for that year.  

But it seemed to me that this was a limited opportunity which particularly applied to those who had already received gift illustrations.  In essence, I felt it would be a nice fact that would encourage people already on the fence to move toward closing their gifts. 

Then, I spoke with Anat Becker, Director, Planned Giving and Estates, for Hadassah, The Women’s Zionist Organization of America, Inc (Hadassah).

Hadassah closed 128 new CGAs in June 2008, totaling almost $4 million in gross CGA dollars. 
 
In my previous article, I noted that Harvard led the university world in 2007 with 281 deferred gifts reported (which should include mostly CGAs and CRTs).  Two other higher education institutions (Cornell and Michigan State) reported over 200.  After that, only five others reported over 100 deferred gifts.

Is Hadassah that good in planned giving? 

Yes, they are.  But this surge of closed CGAs didn’t occur in a vacuum.

To understand any planned giving program, you must look at the organization, its supporters (numbers and demographics), the primacy and urgency of their mission, and, of course, their history in promoting planned giving. 

Hadassah is the largest volunteer Jewish women’s group in the U.S., with upwards of 250,000 members, and has been so for a long time — it was founded in 1912.  Their mission is probably one of the top charitable causes among American Jewish women.  I would guess that the demographic of their membership base is most likely of planned giving prospect age. 

And most importantly for this article, Hadassah has promoted planned giving in very significant ways for over 20 years. 

So, even before this latest CGA effort, Hadassah typically closed around 15-20 new CGAs a month (in December, the number stretches to 50), or approximately 250 CGAs a year. 

And, how do they promote CGAs and other planned gifts?  They print full page ads in Hadassah Magazine (published 10 times a year) in every issue.  And, because a good majority of the readers of the magazine are probably prime planned gift prospects, Hadassah is doing absolutely the right thing by committing a full page in every issue to a planned giving advertisement.  As students of marketing may remember, it takes multiple, consistent messaging before individuals even notice ads. 

Hadassah also mails quarterly planned giving newsletters to approximately 190,000 planned giving donors and prospects.  They also have target mailings and ads in other major publications each year. 

Most importantly, planned giving has penetrated the culture of Hadassah’s supporters and is a standard option of support among many chapters. 

In a typical year, Hadassah receives notice of around 200 new estates and around $28 million in bequest funds.  Their typical gross annual CGA dollar intake is about $9 million.

So what did the Hadassah planned giving department engage in once the ACGA announced the rate drop in April? 

  • Four ads in the New York Times.  
  • A jumbo postcard to around 11,000 planned giving prospects.  
  • Specific ads in Hadassah Magazine alerting members to the rate drop.  
  • Letters to anyone who had contacted their planned giving department since December but had not closed a gift.
  • Letters to existing CGA donors.
  • An email blast to Hadassah members (approximately 75,000 good email addresses).
  • Grass roots efforts to various chapters, regional offices and major gift officers around the country.
  • A June planned giving newsletter that addressed the rate drop. 
  • Numerous presentations to local chapters by Hadassah’s national Planned Giving Chair, Judy Palkovitz.

My Observations
This was a Herculean effort; kudos to Anat and her team!  The campaign launched in April and was finished by June 30th, which does not provide much time for messaging and outreach.  Yet Hadassah launched nine different messaging venues, some of which reached hundreds of thousands of individuals interested in supporting Hadassah through planned giving. 

And it paid off.  This must be one of the best planned giving months outside of December in the history of planned giving.  Readers, please let me know if your organizations have done better in a month outside of December.

Yes, it was building upon a foundation already laid by Anat and her predecessor, Susan Lamb.  But, in my opinion, it shows us that a long-term, consistent combination of multifaceted, targeted promotion of planned gifts will produce results.

A note of caution:

When planning an aggressive marketing campaign, be prepared.  The back office operations of the Hadassah Planned Giving Department were seriously challenged, noted Hadassah’s Senior Planned Giving Attorney, Lori Lasson, and Planned Giving Manager, Desiree Cameron.  No one expected the response to be as massive as it was.  The summer months usually offer the opportunity to catch up and prepare for year-end activity.  Not this summer.  The two plan to ease the backlog by obtaining temporary help.

What about your organization?  If you have not yet engaged in a long-term, consistent combination of multifaceted and targeted promotions of planned gifts, and you feel that your constituent base is ripe for it, you need to start.  But, in the case of the rate drop in April, a massive promotion over three months would have produced little results if there were no individuals yet on the fence. 

Hadassah, as well as Harvard, still sees a significant majority of planned giving dollars from bequests, even though they both have some of the most successful and productive “deferred gift” programs in the country.  I believe that the promotion of all types of planned gifts fuels the bequest program, too.

I was surprised that a few people took me to task after my last article for possibly misleading people into thinking that they should only market bequests.  They said I was playing right into the hands of those in the development world who hate “complicated” planned gifts.  And I can hear the naysayers now: “What do we need these CRTs and CGAs for if bequest dollars will always outperform them?”  “Why bother with all of the effort and expense of life income vehicles?”

Well, take a good look at the numbers from this perspective.  The best life income vehicle programs in the country also have the best bequest programs.  Stanford, which had double the bequest revenue at $160 million in 2007 than Harvard’s $80 million, still reported 160 deferred gifts.

My theory, and this still needs to be proven, is that the healthiest bequest programs go hand in hand with healthy life income programs. 

You will always find some anomalies here and there.  Out of the top 25 university planned giving programs in 2007 based on total bequest and deferred gift revenue reported, only one reported no deferred gifts (Hillsdale College reported 114 bequests and 0 deferred gifts).  Fifteen out of the top 25 reported 35 deferred gifts or more, which I would consider a very active life income program.  Only four of the top 25 programs reported less than 20 life income gifts.

So, there is a need for planned giving officers after all!

This is a significant point when starting a new planned giving program.  Do we launch a life income vehicle program along with a bequest/planned giving society?  While this is not a question that I can answer here because so much depends on the infrastructure and financial expertise of the organization itself, it gives us “techies” hope for a future planned giving world full of complicated gift arrangements. 

A note of sadness.  As I was writing this piece, the staff at Hadassah informed me of the passing of Susan Lamb, Hadassah’s former counsel and director of planned giving.  Much of the credit for building Hadassah’s formidable planned giving program lies with Ms. Lamb.

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