Which Comes First? Most Nonprofits Get It Backwards.
Several of our clients tell me they get phone calls from donors about their Form 990 every week. Questions about salaries, program spending, a line item that looked odd.
Those calls are not the problem. The problem is the calls you never get.
For every donor who picks up the phone, many more read your 990, form an opinion, and move on without a word. You never learn what they concluded. You never even know there was a gift to lose.
And one of the things they want to know is simple… is this organization planning to be here in 20, 30, 40, 50 years?
What’s the Difference, Anyway?
“Major” describes a gift’s size relative to your organization. A $10,000 gift is major for a small shelter and routine for a university.
“Planned” describes how a gift is structured: through a will, a trust, a beneficiary designation, a gift annuity, or other assets in the donor’s financial or estate plan.
So a gift can be both. In fact, the largest gift most donors will ever make is a planned gift, and it’s usually a major one.
What “Planned Gifts First” Really Means
It does not mean asking every donor for a bequest before you ask for a current gift.
It means building your planned giving program first, not “someday” after the major gifts program is humming. Most nonprofits do it backwards. They chase this year’s checks and postpone the program that secures the next 50 years.
That’s putting the cart before the horse.
The planned gift opens the door. The major gift walks through it.
Nobody Invests in a Company With No Future
Would you buy stock in a company with no long-term plan? One that lives quarter to quarter and can’t tell you where it will be in ten years?
Of course not.
A nonprofit without a planned giving program is telling donors the same thing: it isn’t planning for its future. Maybe it has a strategic plan in a binder somewhere. But a donor can’t see the binder. What they can see is whether you’ve given them a way to support your mission beyond their lifetime. If you haven’t, they draw their own conclusion.
Wealthy donors didn’t build their wealth by betting on organizations that live hand to mouth.
Funders Think the Same Way
Grant makers, foundations, institutional funders, and government agencies look at you the same way wealthy donors do. Different checkbooks, same instinct. People who control serious money all ask one question: is this organization built to last?
Foundation program officers read 990s for a living. Funders look for sustainability and diversified revenue. Government agencies want to know the programs they fund will survive past the grant period. A working planned giving program is one of the clearest signals you can send.
Foundation program officers read 990s for a living. Funders look for sustainability and diversified revenue. Government agencies want to know the programs they fund will survive past the grant period. A working planned giving program is one of the clearest signals you can send.
It’s also why grant makers are getting tougher with nonprofits.
Want to put that proof in your next proposal? Read Win a Grant With Legacy Giving: Prove You’ll Be Here in 20 Years.
What a Real Program Looks Like
A sentence on your website saying “remember us in your will” is not a planned giving program. Neither is a paragraph on a profile or an online will-making widget.
A real program has:
- Board involvement. Board members make their own legacy commitments and talk about it. (Need help getting there? Convince your board.)
- Consistent marketing. A year-round calendar, not one mailing every few years. That means a planned giving website donors can find, plus direct mail that keeps you in front of them.
- Stewardship. You thank and recognize the donors who tell you they’ve included you.
- A growing pipeline. You track documented intentions, and that number goes up.
That’s what donors, funders and agencies are actually judging. Visibility matters, but only when there’s something real behind it.
Not sure where your program stands? Take the free Planned Giving Readiness Test.
What This Means for Your Career
Major gifts build buildings and endowments, and they deserve the celebration. But the fundraiser who also builds a legacy pipeline leaves behind an asset that keeps paying off for decades. Boards notice that. So do search committees.
Nobody gets promoted for waiting.
Show Them Where They’re Already Looking
Donors and funders are already reading your 990. It tells your story as of the filing date, with your mission and programs, and it can be a year or two old by the time anyone reads it.
Your free 990 Scout profile on Philanthropy.org lets you add current context right next to the filed data, including your planned giving program. It’s clearly marked as provided by your organization. When a donor pulls up your financials, they see your numbers and your commitment to the future.
Claim your profile and get verified here.
New to reading Form 990 the way donors do? Start here:
Donors today have more information at their fingertips about our organizations than ever before and are asking informed and challenging questions as a result. I routinely am asked by donors to justify our investment in fundraising and the return on that investment with the donor citing numbers directly from our 990 or ratings such as Charity Navigator. Their financial and legal advisors are asking even more difficult questions. Their level of confidence in making the ultimate gift commitment to our organizations depends on how we respond to these challenging questions.
