Legacy Gifts: Taking Your Org’s Strategy to New Heights

Your nonprofit can empower your most loyal donors to leave a mark on the world through legacy gifts. Legacy giving allows donors to make lasting impacts on your mission by setting up major gifts that will be bestowed upon your organization after their passing.

These gifts not only represent a major source of funding for your nonprofit but can also be a great source of personal fulfillment for the donors who arrange to give them. Plus, legacy gifts can also provide donors’ family members and other beneficiaries with significant estate tax benefits.

Despite all of the good that legacy giving can do, many nonprofits overlook opportunities to discuss legacy gifts with their donors or put off creating a legacy giving program. This may be due in part to the fact that legacy gifts are donations that your nonprofit has to wait for, meaning it can be difficult to justify spending time seeking them out. Often nonprofits may shy away from having conversations about legacies with their donors, dismissing it as an uncomfortable topic.

The truth is that legacy gifts are well worth pursuing and discussing with your donors! But to be successful and maintain strong donor relationships, you need a robust strategy. That’s where this guide comes in. We’ll walk through all that you need to know about legacy gifts and how to pursue them, including:

• What is a legacy gift?
• Setting Up a Sustainable Legacy Giving Program
• 4 Tips for Effectively Communicating with Donors About Legacy Gifts

A legacy gift represents the culmination of a donor’s passion for and support of your cause. Your organization doesn’t want to miss out on the chance to invite your donors to make such a significant contribution to its work.

What is a legacy gift?

A legacy gift, also referred to as a planned gift or a deferred gift, is a donation that your nonprofit and a major donor arrange in the present but which is allocated to your nonprofit after the donor passes away.

Many nonprofits view these gifts as great surprises they receive only occasionally. But your nonprofit can deliberately pursue legacy gifts through the creation of a legacy giving program. These programs help you cultivate stronger relationships with potential legacy givers and guide donors through the sometimes complicated process of arranging a legacy gift.

Common Types of Legacy Gifts

There are many different forms that a legacy gift can take. Here are a few common options that your donors may consider as they set up their own legacy giving:

• Bequests: A bequest is something that your donor gives your nonprofit through their will, whether that be cash, property, stocks, or a portion of their estate. This is the most common and often simplest type of legacy gift for donors to set up.
• Life Insurance: Donors can designate your organization as one of the beneficiaries of their life insurance policy. Or, if your donor no longer needs the policy, they can donate the accumulated value to your nonprofit.
• Retirement Fund: Donors can also designate your organization as one of the beneficiaries of their retirement assets, like their IRA, 401(k), or pension.
• Charitable Gift Annuities: The donor gives a large amount of money to the nonprofit. The nonprofit then pays the donor a set annual income from that donation until the pay period ends (usually when the donor passes). After that, the nonprofit gets the remaining funds.
• Retained Life Estates: A donor gives your nonprofit a piece of property that they own, but can still use during their lifetime. Once the donor passes, your organization can choose to sell or keep that piece of property.
• Charitable Remainder Trust: This legacy gift is a type of trust gifted to a nonprofit that pays an annual amount to the trustee. After the trust is completed, the nonprofit receives the remaining funds.

When it comes to choosing what their legacy will look like, donors have a variety of options. And while it will be helpful for your nonprofit to understand the basics of the different types of legacy gifts, don’t be intimidated by their intricacies. Your donors can handle the details of choosing what type of legacy gift would be best for them and their families by working with a financial advisor.

The Benefits of Legacy Giving

Clearly, legacy gifts are major contributions to your nonprofit’s work, meaning they can be a great boon to your organization’s ability to deliver for its beneficiaries. But there are more benefits to legacy giving than this—for both you and your donors.

The donors who give these gifts can receive sizeable tax breaks for doing so (though the specifics will vary, and should be a point of discussion between the donor and their financial advisor). These tax breaks can also help the beneficiaries of the donor’s estate after their passing. Additionally, with legacy giving, donors have the chance to specify exactly how they want their donations to be used, meaning they can ensure that their money goes toward an aspect of your mission that they’re especially inspired by.

As for your nonprofit, legacy giving gives your organization the chance to tap into some of its largest gifts and to capitalize on your most dedicated donors’ loyalty. And with these gifts, you can pave the way for more sustainable organizational growth and success.

Setting Up a Sustainable Legacy Giving Program

To create a streamlined process for seeking legacy gifts, you should set up a dedicated legacy giving program. Let’s walk through some steps you can follow to create a program that will help you connect with legacy givers and simplify the process of creating a legacy gift for your nonprofit.

Create an advisory committee.

Your advisory committee should be made up of individuals who are familiar with legacy giving. Ideally, your team will include staff members experienced in major giving and also outside experts like:

• Estate lawyers
• Realtors
• Financial advisors

However, your organization may not currently have the resources or connections to bring in these individuals. If that is the case, you can have your major gifts or annual gifts team support your legacy giving program.

Whatever your advisory committee looks like, it should be headed by a legacy giving officer who understands the ins and outs of these types of gifts. Similar to your major gifts officer, they’ll lead the program, guiding its branding and marketing. They’ll also manage the prospecting, cultivation, and stewardship processes for legacy donors. Over time, your organization may hire additional legacy gift officers depending on its needs.

As your committee builds out the structure for the legacy giving program, they should draw clear boundaries between what your organization can and can’t advise your donors about. For example, your donors shouldn’t be turning to your nonprofit for assistance with financial planning decisions. Instead, they should work with a financial planner to iron out the specifics of what they want to give and what form their gift will take. Your legacy giving program and the team that runs it will be there as a resource to guide donors through the process of making their gift to your specific organization and will ensure that they feel seen and valued for their contributions.

Brand the legacy giving program.

The way you talk about legacy giving will influence your donors’ perceptions of your organization and legacy giving as a whole. Here are some tips for positioning your program in a way that will get your donors excited about joining it:

• Use words such as “legacy” or “endowment.”
• Share the benefits that your donors can experience when they join your program.
• Closely tie your program to your cause and the impact that planned gifts have.
• Frame the program as a natural extension of what your donor already does (donating, volunteering, etc.) to support your organization.
• Ensure that the visual branding on any marketing assets matches the rest of your organization’s visual branding.

The goal of your legacy giving program’s branding should be to normalize legacy gifts and encourage people to consider how they can leave a lasting impact on your cause. Approach your branding with care, stepping into your donors’ shoes and thinking through how your program will come across to them. You may even want to ask some major donors that you have solid relationships with to give you feedback on the branding of the program.

Conduct thorough prospect research.

To discover both current and future donors that have legacy giving potential, you’ll need to conduct prospect research. For donors that you already know well, such as your board members and other major donors, you’ll likely be looking for additional information to add to their profiles about how loyal they are to your cause, what their financial position is, their age, and their family situation.

For new prospects that have not yet been approached by your organization, you obviously shouldn’t pitch them on making a legacy gift to your organization just as they’re beginning to get involved with your cause. Instead, just be sure their legacy giving potential is on your radar as you begin cultivating a relationship with them.

The key to a successful prospecting process will be leveraging the right prospect research tools. Choose your tools carefully so that you can have the best information possible available to your team. Today, some solutions even offer AI features that can help you automate and streamline the donor qualification process to ensure you’re always working with fresh, accurate, and prioritized lists.

Create a legacy giving society.

Similar to a major giving society, a legacy giving society is an exclusive group made up of the donors who commit to participating in your legacy giving program. You can make this community an attractive selling point of your program by:

• Setting up fun society-specific events
• Honoring society members in your annual report or at board meetings
• Facilitating opportunities for members to get to know each other
• Offering additional perks, like branded merchandise, early event registration, special newsletters, or one-on-one time with your executive director

Donors give legacy gifts because they believe in contributing to something larger than themselves. With a legacy giving society, you can ensure that your donors feel appreciated and seen long before their gift is given to your nonprofit.

Hone your follow-up approach.

Joining your legacy giving program is a big commitment. Ensure that your follow-up approach communicates to your legacy donors that you truly appreciate their contribution, even if your nonprofit doesn’t yet have access to it. Use what you know about your donors to genuinely thank them. Some donors, for example, may appreciate a handwritten thank-you note, while others will be excited to see their names added to a donor recognition wall.

You should also have a plan for reaching out to your donors’ families after their passing. Your communications during this sensitive time should include genuine condolences and a thorough detailing of how the donor made a difference to your organization and its beneficiaries. Take your efforts to the next level by sending flowers or another token of remembrance.

4 Tips for Effectively Communicating with Donors About Legacy Gifts

One of the biggest hurdles nonprofits face when strengthening their legacy giving strategies is knowing how to communicate with their donors about legacy gifts. After all, no one likes to contemplate their own mortality. So, how can you talk about creating a legacy in a way that makes your donors feel comfortable and excited to commit to your program?

Here are four tips:

1. Keep the language positive. Discussions about legacy giving opportunities don’t need to spiral into talks about death. Instead, when talking about planned giving, use positive language (such as “legacy” or “endowment”) to emphasize the importance of creating lasting impact and continuing to make a difference to an important cause. Active, positive words will help you keep the conversation about the donor and the current moment.
2. Don’t try to be their financial advisor. As mentioned above, your nonprofit shouldn’t be giving donors advice about what to do with their estates. If they seek your advice or ask you questions about legacy giving, talk about how your specific program works, and then direct them to a financial advisor to work out the details.
3. Share testimonials. Social proof can be a powerful tool for encouraging legacy giving. Gather testimonials from legacy donors and their families to share real-life stories of how legacy giving has benefited them. Having examples of what legacy giving looks like will allow your potential legacy donors to picture themselves participating in your program.
4. Demonstrate the impact of legacy gifts. Similarly, potential legacy donors should know how much of an impact their gifts can have on your nonprofit. Track and share specific metrics that detail how your nonprofit has used legacy gifts in the past and what needs future gifts can fill. Not only will this give donors a sense of what their legacy could look like, but it can also help them determine exactly what aspect of your mission they want their gift to go toward.

Talking about legacy giving with your donors doesn’t need to be awkward or uncomfortable. As you grow your legacy giving program and establish legacy giving as a standard and effective way of contributing to your cause, more and more donors will be eager to discuss their options with you!

Final Thoughts

Legacy gifts can make a big difference to your nonprofit’s ability to serve its beneficiaries, and they give donors the chance to have an outsized impact on a cause that they love. And, when you take a deliberate approach to seeking legacy gifts, your organization can secure more of them. Use the tips in this guide to begin strengthening your legacy giving strategy today!

Looking for more information about fundraising? Here are some recommended resources:

• Building a Gift Range Chart: A Quick Guide & Template. A gift range chart can guide your fundraising efforts for large-scale projects like capital campaigns. Use this guide to learn how to build your own and use DonorSearch’s gift range chart template!
• Fundraising Software: 25+ Best Solutions to Drive Donations. When it comes to fundraising software, there are hundreds of options to choose from. Check out our recommendations
• Starting a Capital Campaign: 13 Steps Your Org Should Take. Starting a capital campaign is no easy feat. Use this guide to build a strong foundation and get on track to meeting your fundraising goals.