My Top 10 Takeaways from the New PG Research

Kudos to the Stelter Company for continuing to invest in donor research that assists each and every one of us in our effort to raise funds for good works. The research, conducted in June of this year, expands on and validates some of their earlier (2008) breakthrough research. The full report of the new research as well as the older research can be downloaded here after you register.

Here are my top 10 takeaways from the research which was conducted with 400 current and prospective planned givers age 40+. Prospective planned givers, the group that the research refers to as “best prospects,” are those who said they will definitely or probably make a planned gift to a nonprofit organization within the next five years.

1. The best prospects for a planned gift (60%) are donors age 40-54. This finding validates the Stelter research from 2008 and presents a stark contrast to the long-held belief that older people who have been loyal over decades are our best prospects. Indeed, 40% of the current planned givers who took part in the research are also in the 40-54% age group. It makes sense that 40-54 year-olds would be some of our best prospects, since those 55+ are more likely to be set in their planning with little chance that their plans will change. Of course, we can all cite an exception but anecdotal evidence is just that—anecdotal. And even if those in the older cohort have been our best prospects in the past, the times they are a changing. The WWII-era donors are largely gone and the Silent Generation, while still with us for now, represents a small fraction of our audience relative to the big bulge—the Baby Boomers. Maybe we need to change, too.

2. Affinity for the nonprofit’s mission trumps everything. This helps explain why younger donors can be good prospects. It’s not about longevity, it’s about passion for the cause.

3. Loyalty does not necessarily correlate with planned gift likelihood. The research revealed that 20% of the planned givers in the group had been donating for fewer than 5 years and another 21% had never donated prior to making their planned gift. The fewer years of giving might correlate with the younger age cohort since younger donors almost by definition have fewer years of giving than older donors. And the 21% who never donated doesn’t surprise me. Every organization I’ve ever worked with has gotten bequests, sometimes very large ones, from people who had never made a gift before. Big brand names like the American Cancer Society and St. Jude Children’s Research Hospital probably get a disproportionate share of those gifts because their PR is so effective at keeping their name in the public consciousness but it’s common across the board. While 41% of our audience may have fewer years of giving, the stats still mean that loyalty is a factor for 60% of our audience. And, more importantly, as noted in #2, above, affinity trumps everything.

4. Wealth and large annual gifts do not correlate with planned giving likelihood. This shouldn’t be a surprise to anyone. We’ve known for a very long time that most planned gifts (revocable ones) come from people of modest means and that very, very few estates are subject to the estate tax. Even if the estate tax threshold is lowered on January 1, the percentage of estates subject to tax will still be small.

5. Membership in a Legacy Society does not motivate donors to make a legacy gift. The report says unequivocally, “The idea of joining an organization for major donors and/or people who have made a planned gift to a charity was rejected by virtually every best prospect and current planned giver who was not already a member. Only 3% of nonmembers say they would welcome an invitation.” Again, this doesn’t surprise me at all. You can read my blog post from a few weeks ago on this topic by clicking here.

6. 53% of current planned givers said that less than a year elapsed between the decision to make a planned gift and executing their gift documents. The research also revealed that life events are not necessarily the trigger that prompts a planned gift. This latter point seems to tie neatly to the finding that older donors are not our best prospects. The conventional wisdom used to be that life events—births, deaths, divorce—are what trigger planned gifts. But as the research indicates, affinity trumps everything.

7. Family and friends, rather than tax or legal advisors, are the go-to resources for planned gift decision-making. This is in line with the skyrocketing importance of peer recommendations in our culture. Just think of Yelp, Trip Advisor and sites where reviews, even from complete strangers, inform decision-making. Good news for us, though, is that information from the charity and/or staff relationships rated highly on the influence scale.

8. Only 40% of planned givers notify charities of their intention. This is not a new finding but it’s good to have it validated.

9. There is room for improvement in our stewardship of planned givers. Of the fraction of planned givers who have notified the charity of their gift, 62% rate the stewardship they receive as excellent and 31% say it is good. In my opinion, we should be at 100% excellent with this audience. No excuses.

10. Written communication is more appealing than in-person communication, especially with older audiences and most donors do not wish to receive more communication of any kind. I think we need to take this finding with a grain of salt. Another way of saying this is that donors are mostly satisfied with the type and frequency of communication they are receiving from us. And, I’ve always believed that relevant communication is always welcome.

Over the couple of weeks I’ll propose action steps you can take in response to these findings.

Phyllis

Tagged as: Bequests, Boomers, Demographics, Fundraising, Marketing, Planned Giving, Stewardship, The Stelter Company