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Planned giving strategies: The conversation that makes the difference

MUSE  | 

How do successful nonprofits connect with potential donors? What are the conversations that make the philanthropic difference?

A 2016 U.S. Trust study of high net worth philanthropy–which examined who is giving to what causes, and why–found that 78 percent of wealthy donors are motivated by their personal values. Yet nearly as many (67 percent) are challenged by where to give. These issues have long-term implications, as nearly 80 percent of wealthy donors give over the course of generations.

Another study by the U.S. Trust1 found that not enough advisors are talking to their clients about the benefits of philanthropy. When they do talk about it, advisors tend to spend too much time on the technical aspects of giving. Notably, only about 10 percent of donors are motivated by the tax implications of their donations.

How can nonprofits leverage this information and stand out in a competitive landscape? With more than 1.5 million registered charities in the United States alone, that landscape is far and wide. Yet while organizations compete for donor funds, they do not want to be seen as a commodity. Nonprofits need to be viewed consistently and by design in a different light to connect with donors. They need to be seen as a bridge to donor values.

Start by opening a relationship

The traditional donor approach focuses conversations on the different ways to give, the various assets that can be received or the different campaigns being run by the organization. Instead of this “gift first” approach, nonprofits should begin by moving the donor closer to the charity. It’s an approach that leaves defenses behind and creates an open channel between the donor’s passion for the charity, and the charity’s needs for donations.

This means leading with what matters to the key donor relationships before talking about the needs of the organization. Often, nonprofits talk to donors about what is important to them and why for about 20 percent of their conversations; the remaining 80 percent is dedicated to how to give. These solution-based conversations can end up being highly technical and will frequently end any further conversation with the donor. The key is to help the donor see the connection between their passion and their donation.

This is not to say that 80 percent of the time spent with the donor is talking about what matters to them, or that only 20 percent should be spent on the solution. But organizations need to reset the balance, spending enough time to understand the donor’s connection points, and being able to articulate how the charity is honoring the donor’s values and philanthropic strategy.

The impact of communication and trust

In The Trusted Advisor (2001, Touchstone), authors David H. Maister, Charles H. Green and Robert M. Galford developed a formula for defining trust: credibility plus reliability plus intimacy equals trust. The level of each element determines the ultimate level of trust. When these elements are diluted by self-interest or self-orientation, trust can be compromised. If nonprofits have a high scale of self-orientation, the conversation leans more towards the organization, and this can compromise trust in the donor relationship.

When fundraising teams are meeting with key donors, they need to think about their approach. The elements of the formula are important to developing donor trust:

  • Credibility can speak to how the organization is applying its funds, not just your resources or technology.
  • Reliability says you make promises and show up to meetings on time.
  • Intimacy means allowing the donor to open up about their needs first.
  • Self-orientation, where the charity is more focused on its needs than what really matters to its donors, is the greatest challenge charities have in creating meaningful donor relationships.

While people may mean well, they don’t always create trust well. Organizations need to empower their teams in a way that allows them to engage in donor relationships and create that environment of trust.

The conversation that makes the philanthropic difference

So how do nonprofits get the conversation started?  

Nonprofits need to ask themselves which best describes their communication strategy with key donors today: Do they demonstrate the organization’s technical expertise and competence, lead with the needs of the organization or uncover what matters most to donors? Or some combination of all three?

While fact-finding and data gathering by the fundraising team are important for donors, it is discovering what drives donors that really engages them. An authentic discovery conversation is all about their values; in many ways, it’s a gift that fundraising teams can give to donors and their families. This can lead to donors opening up about their finances and meaningful discussions about planned giving.

There are three basic components to uncovering and understanding a donor’s story:

  • Vision: A desired future state. What role do they want philanthropy to play in their lives, their planning and their family?
  • Values: The core rules and standards to be honored. What are they for the donor?
  • Goals: The steps that will take them closer to their ideal vision.

There are many ways to uncover these elements. Some organizations use value cards to talk with donors about what is important to them. But it is important to separate conversations on strategies, tactics and tools from those on vision, values and goals. Both are important, but what matters to the donors—and why—is how it starts. This type of conversation leads to goal clarity and can alter the relationship.

It takes a team

Planned giving takes time and consideration—and it takes a team. What role do you want to play at your donor’s planning table? What role will the donor actually let you play? Nonprofits need to know who is sitting around that table because these are people who can make a difference between making the donation to your organization and shifting the donation to another charity.

But it all begins with what matters to the key donor relationships. It might take a bit longer, but ultimately it will save time in the decision-making process for the donor.

To learn more about planned giving strategies and communications with potential donors, listen to the webcast.

Note: Todd Fithian, managing partner of The Legacy Companies, LLC, contributed to this article.

1“The U.S. Trust Study of the Philanthropic Conversation: Understanding Advisor Approaches and Client Conversations” (Oct. 2013)