Welcome!Planned Giving Group of Connecticut

How to Create High Trust Donor Relationships

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Joe

The Effect

• Church $250,000• School $200,000

• The Charity That Introduced Joe to Planned Giving Received a $963,000 Gift

Non-Profit Challenges

10 significant planned giving challenges!

1. Charitable Giving Down

Non-Profit Challenges

2007-2009 RecessionTotal Giving Down 5.5%

Annual Giving Increases Adjusted for Inflation: Giving USA 2010

Declined: Bequests -23.6%

Foundations -8.6%

Up: Corporations +5.9%

Constant: Individuals -.4%

Giving USA 2010

Individuals Are CriticalIndividuals are 81% of Charitable Contributions

Annual Giving Increases Adjusted for Inflation: Giving USA 2010

Individual Giving Below 2004 Levels

2004 2005 2006 2007 2008 2009

$229.5

$243.4

$239.1

$229.3 $227.4

$244.6

Non-profit Challenge

2. Recession Hit Biggest Donors

Affluent Shrink

Market SizingMarket Sizing

Affluent Market Insights 2010 by Spectrem Group

3. Planned Giving Efforts Neglected

Non-Profit Challenge

Bequests Increases; Adjusted for Inflation: Giving USA 2010

Bequests Down 5 Of Last 7 Years

22.90%

4.70%

14.90%

-1.10%

-10.60%-6.40%

-23.60%

2004

20052007

Giving USA 2009

Charitable Trusts FlatCharitable Trusts Flat

Trust Tax Returns

4. More Charities Stressed And Failing

Non-Profit Challenge

…many charities have turned to the courts for protection…

The New York Times: Friday, February 20, 2009

Charities Now Seek Bankruptcy Protection

Charities StressedCharities Stressed

•58 percent increased need for services

•1 in 12 say they still face closure

Economy Continues to Squeeze Charities

5. Non-Profit Over-Saturation

Non-Profit Challenge

Giving USA 2010

Too Many NonprofitsToo Many Nonprofits

By end of 2009 1,238,201non-profits.

+419,193 since 2000!

6. Competition from Financial Sector

Non-Profit Challenge

Donor Advised LeadersDonor Advised Leaders

Philanthropy.com Status

Fidelity Has Over 4 Times

More Than the Next

Non-Financial Fund

Fidelity Has Over 4 Times

More Than the Next

Non-Financial Fund

7. Increasing Scrutiny and Testing

Non-Profit ChallengeNon-Profit Challenge

College Sustainability Report

Card

Education Non-Profits Get a

Grade

Healthy Non-Profits?

Healthy Non-Profits?

Watchdog ServiceWatchdog Service

8. Donor Confidence Crisis

Non-Profit Challenge

Crisis in Confidence

The 2008 Study of High Net Worth Philanthropy – March, 2009

Donors Seeking Charitable Planning Advice

Donors Seeking Charitable Planning Advice

9. Insufficient Resource Commitment

Non-Profit ChallengeNon-Profit Challenge

Ineffective Tools

Too Little Time

Lack of Board Support

Inadequate Budget

Short-Term Focus

Planned Giving Obstacles

Inadequate Budget

The Chronicle of Philanthropy: Philanthropy.com

The Chronicle of Philanthropy: Philanthropy.com

Lack of Board Support

The Chronicle of Philanthropy: Philanthropy.com

Old Tools Are IneffectiveOld Tools Are Ineffective

Too Little Time

The Chronicle of Philanthropy: Philanthropy.com

Short-Term Focus

UrgentNeeds

Future Security

No Sustainability

Fundraisers Confidence PlungesFundraisers Confidence Plunges

Center on Philanthropy Press Release – August 3, 2009

28% Decline

10. Donor Information Overload

Non-Profit Challenge

Information Overload

Billboards

TV

Radio

NewspapersMagazinesBooks

Mail

Emails

Social Media

Web

Information OverloadInformation Overload

Why You Feel the Way You Do, Inc. Magazine, Jan. 1999 and Chet Holmes

Marketing Messages Per DayMarketing Messages Per Day

Official Google Blog

Google Index

Of Web Pages

Google Index

Of Web Pages

Web OverloadWeb Overload

26 Million26 Million 1 Billion1 Billion

1 Trillion1 Trillion

What Do Donors Worry About?

Donors WorriesIn 2005…

What Percent of Families With a Net Worth of $1 Million to $10 Million Are Very Concerned About Losing Their Wealth?

5 Out of 10 9 Out of 10 7 Out of 10 2 Out of 10

Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press

# 1 Donor Worry# 1 Donor Worry

Percentage of Households with $1 Million to $10 Million in Net Worth Who Are…

“Very Concerned About Losing Their Wealth”

Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press

88.3%

Living Too Long

40 Percent IncreaseIn Just 12 Years!

Running Out of Income

The average 65-year old must now fund an additional 6 years of lifestyle!

Retirees have a much higher inflation rate than the general population, largely due to medical costs.

Rising Medical CostsRising Medical Costs

Increasing TaxesIncreasing Taxes

Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press

Income Taxes Estate Taxes

Wealth Priority LadderWealth Priority Ladder

Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press

Charity Lower Priority

Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press

Today’s DonorToday’s Donor

Stressed About Future

1. Losing Their Wealth

2. Living Too Long

3. Running Out of Income

4. Rising Medical Costs

5. Increasing Taxes

What Do We Do?What Do We Do?

We Ask Donors for aMajor Gift

The only time I hear from you is when you want….

The only time I hear from you is when you want….

What Donors ThinkWhat Donors Think

Their CashTheir Cash Their SecuritiesTheir Securities

A Major GiftA Major Gift

An Ask For …An Ask For …

Is This the Best Single Focus?

Major GivingCharity Creates NeedMore Benefits to CharityCharity-Focused

Our Primary FocusOur Primary Focus

Major Giving Planned GivingCharity Creates Need

Donor Life Stage Creates Need

More Benefits to Charity

More Benefits to Donor

Charity-Focused Donor-Focused

A Balanced Approach

The AnswerThe Answer

Boston College Social Welfare Research Institute based on survey data collected by Opinion Research Corporation for The Non-Profit Times

Planned Giving

•Ties Donor To Non Profit By Creating Ownership

•Donors Who Have A Planned Gift Give A Larger Percent Of Their Income Currently

•Only 1 In 5 Has A Planned Gift

Non-Profit Benefits

Planned GivingPlanned Giving

Create Lifetime Income Reposition Assets Reduce Taxation Create Tax Deductions Leave a Legacy Lifelong Connection to

the Charity

Donor Benefits

A Balanced Approach

Must Be:

• Donor-Centric

• Use Limited Resources

• Cost Effective

• Time Efficient

• Sustainable

Who is the ideal planned giving donor?

Boomers Are DemandingBoomers Are Demanding

•More Control

•More Options

•More Flexibility

Boomers are Influential & Redefine Every Industry

• Coffee

• Cars

• Computers

• Etc.

Who gave Boomers (and others) what they want?

Boomers Redefine Charitable Giving

From nowhere to #1 in just 6 short years.

From nowhere to #1 in just 6 short years.

Meteoric RiseMeteoric Rise

BOSTON--(BUSINESS WIRE)--Nov. 1, 1999 and LA Times

Began

11th

5th

1st

3rd

Look at their lead in number of funds today!

Undisputed LeaderUndisputed Leader

Status of Finances of Donor-Advised Funds in 2009 - Philanthropy .com

Donor Advised Funds

Donor-Centric,

Sustainable

Approach

How Did Fidelity Do It?How Did Fidelity Do It?

1. Integrity

2. Intimacy

3. Interest

3 Components3 Components

Building High TrustBuilding High Trust

Actions

Emotions

Motives

• 2 Out Of 3 Can’t

Trust Most People

• 1 In 5 Don’t Trust

People They Know

Era of DistrustEra of Distrust

Integrity

Words = Actions

• Do what I say?

• Complete what I start?

• Then…

IntegrityIntegrity

Words = ActionsWords = Actions

• Then…

• I Can Trust What You Say

Integrity KillersIntegrity Killers

Words = ActionsWords = Actions//

• ?

• ?

• ?

Integrity Boosters

Words = ActionsWords = Actions

• Return Calls Promptly

• Hand Written Notes

• Admit You Don’t Know

IntimacyIntimacy

= Emotions= Emotions

I Feel Comfortable

Telling You About…

Communication

Comfortable

• Simply

• Appropriately

• Powerfully

• Pictures

• Stories

• Analogies

Communicate simplyCommunicate simply

• Never, Ever, Ever Use Acronyms… CRT, NIMCRUT, CRAT, CLT, CLUT, CGA, ILIT…

• Don’t Use Industry Terminology

Communication Killers

• 6 out of 10 are

Visual

• 3 out of 10 are

Auditory

• 1 out of 10 are

Kinesthetic

Communicate Appropriately

Communicate Appropriately

Use Metaphors

Communicate PowerfullyCommunicate Powerfully

Words Used

Body Language

Tone of Voice

Which Speaks?Which Speaks?

CommunicationCommunication

Which One Do You Focus On?Which One Do You Focus On?

• Interrupt

• Complete Sentences

• One Up Their Stories

• Complain or Criticize

• Look Elsewhere

• ???

Communication KillersCommunication Killers

InterestInterest

MotivesMotives

I Don’t Care How

Much You Know

Until I Know How

Much You Care!

Interest =Interest =UnderstandingUnderstanding

• Their Situation

• How They Feel

UnderstandUnderstand

What Are Your…

What Are Your…

• Fears

• Worries

• Concerns

UnderstandUnderstand

What is Most Important?What is Most Important?

Technical Mastery

OR

Helping Them Define

Their Problems?

UnderstandUnderstand

Know This:Know This:• People Don’t

Know What Their Problems Are

• They Don’t Know How To Think About Them

Listen ActivelyListen Actively

• Really, Then What Happened?

• Restate To Clarify

• Who’s Talking The Most

Don’t Answer, ClarifyDon’t Answer, Clarify

• Tell Me More

• Which Means?

• Maybe It’s Me,

But…

The Answer . . .The Answer . . .

To every question is

a better question!

Powerful QuestionsPowerful Questions

• If you were to wake up at 2:00 in the morning and worry about something, what would it be?

• What is your most meaningful charitable gift, not biggest?

• What would you like the people who know and respect you to say about you?

• Yours?

1. Integrity Actions

2. Intimacy

Emotions

3. Interest Motives

Earn TrustEarn Trust3 Components3 Components

Tip of The Iceberg

Level 1: Unsolicited GiftsRegular Gifts

Source: Surplus Wealth

Motivation: Love of Charity

Level 2: Solicited GiftsRegular, Major Gifts, Planned Gifts

Source: Surplus Wealth

Motivation: Love of Charity, Income Needs

Level 3: Donor-Centric MotivationMajor Gifts, Planned Gifts

Source: Redirected Tax Savings

Motivation: Tax Reduction, Income Needs, Family Values, Charity

Oseola McCartyOseola McCarty

10 Dimes Made a Difference

Thank You

How to Create High Trust Donor Relationships

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