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Simple Plan to Start Planned Giving Program

Nonprofit organizations that have been around for a bit (number out of a hat: five years) should consider implementing a planned giving program.  Revenue from wills, trusts, insurance policies from your donors can be a good boost to income for the mission.  From the start, I recommend that your finance committee prepare a policy on how planned gifts will be used by your public benefit organization.  Bequests and trusts of $1,000 and more can go to a board designated fund for your nonprofit’s long-term purposes.  This money can build a reserve for you that can earn interest income as well as growth of principle value.  Over time, this fund can generate revenue that can be used to help underwrite operations.  Some nonprofits set a policy allocating 5% of principle value each year for these operations costs.  Discuss your plan with the experienced accounting firm that conducts your annual audit and prepares your audited financial statements under AICPA standards.  You want to be sure you’re in compliance with local, State, federal law.

If you’re going down this path, I also recommend that your development committee recruit an experienced Estate Planner: an attorney who writes wills and trusts for clients, has significant experience in this area, and who has a passion for your mission.  And will join you as a volunteer with the clear understanding that s/he will not earn income from your nonprofit.

At the same time, creating a Gift Acceptance Policy that indicates how donated income comes in to your organization and gets properly allocated will be very helpful to you down the road.  Over time, you might receive real estate or common stock and there should be predetermined procedures on how these gifts will be handled.  Also, some donors may want the executive director or development director to serve as a trustee or executor of their estate.  This is a conflict of interest and should be avoided.  A competent attorney in these matters will advise you properly and help keep you out of wickets that can become rather sticky.

Once the development committee and Board of Directors are in agreement on how to proceed, you want to let your donors know of this new program.  Writing appropriate announcements for your newsletter, noting your program in your annual fund appeal can help get the ball rolling. And working with local funeral homes to have memorial envelopes available so families looking to direct memorial gifts to a “charity” that they know was important to the deceased person can consider you.

These simple steps can lead to a well thought out plan that can bring great benefit to your nonprofit.  Starting in a thoughtful, conservative way can get you on the right track.

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Tribute & Memorial Gifts to Nonprofit Organizations

When Margie’s Mom passed away recently, she had an obituary in mind. And that obituary included a request: in lieu of flowers, please make donations to the Alzheimer’s Association. Margie has many friends, and I’m sure the Association will receive many contributions in memory of Lillian, Margie’s Mom.
This is a very common practice. As people deal with the death of a parent and have to make the necessary arrangements, there is a certain feeling among many people to have something good come from a personally sad situation. Maybe these hundreds or thousands of dollars will help a researcher find an answer that will help further forestall the ravages of Alzheimer’s.
Nonprofit organizations, particularly those with a mission related to health and fighting disease, should all have a program in place that makes it easy for the bereaved to honor the deceased’s memory with a tribute.
In addition to memorial gifts, many nonprofit organizations have a tribute or honor program so friends, users of the service, people who subscribe to your environmental newsletter, subscribers who buy tickets to your theater’s or performing art troupe’s events would like to use the celebration of a birthday or anniversary or graduation to pay tribute to a person you feel close to, don’t know what to buy as a gift, but know they are members of the Sierra Club, the Somerville Homeless Coalition, the American Repertory Theater, the Blue Ocean Society and would like to receive such a tribute.
These are good fundraising opportunities that can be used in a thoughtful, tasteful way that engender good feeling and bring in dollars to help you advance your mission.
If It’s The Results can be of help in initiating such a program, please be in touch.

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