Blackbaud APRA Webinar Lasting Legacies
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Lifetime Loyalty and Lasting LegaciesPresented by Lawrence C. Henze, J.D. & Katherine Swank, J.D.
Presentation SpeakerLawrence C. Henze, J.D.• Principal Consultant, Target Analytics• Founder, Blackbaud Analytics, Core
Data• Co-founder, Econometrics• 33+ years in nonprofit market as
fundraiser and consultant• Author, To Screen or Not to Screen
https://www.blackbaud.com/files/resources/downloads/WhitePaper_ToScreenOrNotToScreen.pdf
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Presentation SpeakerKatherine Swank, J.D.• Senior Fundraising Consultant, Target
Analytics• Past president, Colorado Planned
Giving Roundtable• Member, State Bar of Arizona• Affiliate faculty, Regis University’s
Masters in Global Nonprofit Leadership program
• Blogger @ npENGAGE• 25+ years in nonprofit market as
fundraiser and management
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Our Agenda
The Importance of Planned Gifts
Loyalty & Prospect Identification
Effective Use of Data
Getting Started
Q&A
The Importance of Planned Gifts in the Development Office
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Making the CaseWhat is Planned Giving?A giving process that honors the donor’s desire to do something special and
to give back• Emotional, moving, not technical
A giving process that correlates with donor and prospect loyalty
A giving process that reflects the donor’s financial behavior
Why is it important?Donor cultivation is similar to major gift cycle Research cycle is similar as wellYour organization may have more ultimate dollar potential
in planned giving than in major giving
Three Most Popular Planned Gifts• Charitable Bequests (Bequests)
• 90 to 95 of every 100 Planned Gifts will be Bequests
• Including Beneficiary Designation Form Gifts (BDFG)
• Life Insurance, Retirement Funds, Bank and Savings Accounts, Mutual Funds
• Charitable Gift Annuities (CGA)• Another 3 to 5 of the remaining will be CGAs
• Charitable Remainder Trusts (CRT)• 1 or 2 in every 100 planned gifts will be a CRT
Type of Planned Gift Average Gift Amount
Bequest $35,000 - $70,000
Charitable Gift Annuity $60,000
Charitable Remainder Trust $250,000
Role of Prospect Research
Why use research to identify planned gift prospects?
• Research leads the effort ….• Identify the organization’s pool of
qualified prospects• Categorize the prospects by gift type• Prioritize prospects capable of making
the largest gifts• Segment top prospects who should be
approached on a personal level
Primer on Planned GiftsBEQUEST
• Provision in a will or trust to pass money to a charitable organization upon one’s death • Wills are often the first estate planning tool
• Two primary age groups: Late 40s to late 50s; Mid 60s to late 70s
CHARITABLE GIFT ANNUITY• A contract between 1-2 donors and your organization. In exchange for making a gift,
you promise to pay the donor(s) a fixed amount regularly for life• Primary age group is mid 70s and older
CHARITABLE REMAINDER TRUST
• The trust that pays a specified annual amount to one or more people for a fixed number of years, or for the life of the individual(s) who benefit from the trust’s distributions; at the end of the term, the remaining trust property is distributed to your organization and any other specified charities
• Primary age group is mid 50s through early 70s
Loyalty & Prospect Identification
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Primary Attributes of Planned Gift Prospects
360 Donor View
•Giving history is trending positively/consistently•Volunteerism
•Generational correlations to planned giving
•Conservative use of credit•Preservation of assets
•Political contributions•Giving to other nonprofits
Loyalty to You
FiscallyConservative
Age/Cohort
Engagement with Others
Traditional focus is on consecutive years of giving or membership
• Loyalty may be shown through giving/membership that happens less frequently, but more often than not (for example 3 of 5 or 6 of 10 years)
Loyalty may also be known as affinity or engagement and demonstrated through other activities
Different Types of Loyalty
• Loyalty best described as a step in the engagement process
An expanded concept of loyalty may open doors to increased engagement by constituents
Nonprofits feel the compelling force of tradition every day
Looking outside tradition will allow you to identify the truly meaningful relationships that define loyalty and engagement
Use data to determine trends
• Metrics
• Analytics
Fit “best practices” to match what the analytics and metrics reveal for your organization
• Data driven success
Expanded View of Loyalty
Higher Education, K-12
Care (patient)
Cause
Arts & Cultural
Public Broadcasting (Radio and TV)
Faith-Based
Family & Human Services
Environmental
Loyalty by Nonprofit ‘Type’
Volunteer/DocentMemberTicket purchaserSubscriber# of VisitsOutreach to organization
• Donor or prospect initiated contacts • Positive or negative
Loyalty by Nonprofit ‘Type’ Arts and Cultural Example Faith-based Example
May vary significantly by the beliefs and traditions Volunteer
TeacherDelivery of meals
Regular attendanceOutreach (mission growth)Interesting outcome: engagement within the Jewish community drives giving to Jewish and non-Jewish organizations
Trajectory and BequestsThree donors (giving behavior for ages 50-70)
Donor 1• Consistent giving of $25 annually (bequest)
Donor 2• Consistent giving of $100 annually declining to $10
annually at age 65 (annuity)
Donor 3• Frequent but not consistent giving of amounts
$1,000+ escalating over time (CRT)
Grouping individuals of similar characteristics into respective categories
Way of taking a lot of data and grouping people into subsets in a meaningful way
Mosaic, Prizm, PersonicX, Niches are all pre-made cluster data overlays you can purchase
Cluster Analysis
Mosaic Clusters• http://www.experian.com/marketing-services/consumer-segmentation.html
Example:
Cluster Analysis
Autumn Years Established, ethnically-diverse and mature couples living gratified lifestyles in older homes
Aging in Place Middle-class seniors living solid, suburban lifestylesRural Escape Older, middle-class couples and singles living comfortable
lives in rural townsSettled and
SensibleOlder, middle-class and empty-nesting couples and singles in city neighborhoods
Clusters and Bequest Intentions• Segment by known bequest
intentions• For example, 76% of bequest
donors are described by 7 of the 26 clusters
• 29% of the non-bequest donors were also described by the same 7 clusters
• Concentrate on these prospects who are included in 1 of the 7 clusters for bequest cultivation and solicitation
APPLICATIONS OF CLUSTER DATA
Niche E8%
Niche I9%
Niche M14%
Niche N12%
Niche S8%
Niche Y9%
Niche X16%
All Other 'Mosaics'24%
% of Bequest Donors in XYZ Organization’s Database
Inferring Potential Loyalty from Philanthropic BehaviorAn individual’s history of past giving and overall philanthropic experience are key indicators for future philanthropic behavior and engagement.
NOZA - With more than 90 million records it provides the most comprehensive and up-to-date source of charitable giving data available anywhere.
Database Cooperative - A file of 80 million US households with over $2 billion in donations provided by over 900 of the largest non-profits in the US
Donor Loyalty
Donor/Prospect ActivityGiving to Other Organizations
Database CooperativeConstituent Analysis
Effective Use of Data
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Health Giving
Political Contributions
Credit Balances
Household Size
Credit History
Mosaics
Giving History
Planned Giver Profile
Donor Profile
Unknown < than $500,000 $500,000-
$999,999 $1,000,000-$2,000,000 $2,000,000-
$3,000,000 $3,000,000-$5,000,000 $5,000,000+
0%5%
10%15%20%25%30%
9% 8% 12%
27%23%
11%10%
% of CRT Donors
Real Estate Values and CRT Giving
• Wealth and asset data, such as real estate, can be used to better understand specific groups of donors
Data Mining for Planned Gifts
BEQUEST PROFILE
Recent and frequent donors with few people living in the home
Are either retirees, living quiet, comfortable lives, to very prosperous powerful middle-aged and older executives who enjoy more affluent lifestyles with prestigious careers and educations
Purchase a large amount of consumer products via postal mail and catalogs and give to religious organizations
RESEARCH POINTS
Look for loyalty in giving, membership or affiliation, volunteerismAge 40+, absence of children at homeHousehold Income at $70,000+Corporate titles or business ownershipEvidence of gifts to other organizations, especially religion
Data Mining for Planned Gifts
ANNUITANT PROFILE
Recent donors with few people living in the home, which they own outright or have no mortgage
Are retirees, living comfortable lives or are prosperous executives with prestigious careers and educations
Interested in business and finance, make political gifts and contribute to humanitarian organizations
RESEARCH POINTS
Look for consistent giving that may have waned recentlyAge 70+ with household close to pre-retirement levelsRetired status and possibly single, divorced or widowedEvidence of political gifts and giving to other organizations, especially
human services
CRT PROFILE
Committed donors to your organization, approaching or just passed retirement age and living alone or with one other person
May have been employed in science-related professions or business owners
Conservative financial habits with low or no mortgages; involved in the community through political giving
RESEARCH POINTS
Look for loyalty in giving, not necessarily high amountsAge 50+ with household incomes at $100,000+Corporate titles or business ownership, possibly in technology or
teaching in higher educationPolitically active donors
Data Mining for Planned Gifts
Getting Started
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Effective Donor Relationship Cycle
What’s happening now? Are you…
• Identifying planned gift prospects?
• Assigning planned gift prospects?
Are you moving donors seamlessly through the relationship management cycle?
• Avoiding “dormant” donors and prospects?
• Using Annual Fund to continually generate planned gift prospects and retain these prospects as active donors?
Gift DonorsPlanned
Gift Prospects
Annual Donors
Determine personal capacity of your development team’s planned gift prospect pool
Review your time allocation for other responsibilities to create more pro-active research time
The following slide shows maximum gift potential to your organization based on prospect portfolio size and national averages
Your chance to shine by uncovering a large amount of high-gift potential donors
Putting It All Together
Pro-active Research PlanWork with your Planned Gift team to create a multi-year research and solicitation plan
5-Year Research – Outreach – Solicitation Plan
# Prospect
s
Prospect-to- Gift
Conversion Rate
Average Planned Gift
Future Revenue Potential
Board Members 25 50% $50,000 $625,000
Past Board 100 30% $25,000 $750,000
Professional Staff 10 50% $20,000 $100,000
Long-term Employees 10 25% $10,000 $25,000
$10,000+ Single Gift 50 30% $50,000 $750,000
Stocks/Mutual Fund Donors 25 30% $50,000 $375,000
25 Gifts or more 500 20% $10,000 $1,000,000
10-Yr Donors 300 20% $10,000 $600,000
Other Top Prospects 750 <1% $10,000 $75,000
ProspectClassification
Summary and Q & A
Lawrence Henze, J.D., Principal ConsultantTarget Analytics, a division of Blackbaud, Inc. Based in Walnut Creek, CABlackbaud cell: 843-991-9921 Lawrence.Henze@blackbaud.com
_______________________________________________________
Katherine Swank, J.D., Senior ConsultantTarget Analytics, a division of Blackbaud, Inc. Based in Denver, COBlackbaud cell: 843-670-7278 Katherine.Swank@blackbaud.com
White Papers: http://www.blackbaud.com/company/resources/whitepapers/whitepapers.aspx
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