Alerting an organization of a planned gift before death has many benefits for donors and organizations alike.
According to Joel Fox, chief development officer at the Menorah Park Foundation in Beachwood; Charles Miller, senior director of gift giving at Case Western Reserve University in Cleveland; Kayla Naticchioni, external relations manager at Providence House in Cleveland; and Amanda Pinney, executive director of development and engagement at the Tri-C Foundation in Cleveland, it’s not uncommon for gifts to pop up after death.
“In my experience, it’s much more common than you’d think to receive a gift we didn’t previously know about,” Naticchioni said. “The more established relationship we have with the donor, the more they tell us. However, there are still many donors that do not disclose that. In that case, we always love a happy surprise.”
Fox added, “It depends on the definition of ‘common,’ but we do get a few gifts every year that we didn’t know about. We have many donors that alert us that we’re in their estate plan but choose not to share the details.”
Miller said these surprise gifts used to be more common than they are now. Under the old planned-giving model, many organizations avoided conversations about legacy giving.
“Fundraisers feared estate planning was too delicate and personal to discuss with donors,” he said. “As a result, it seemed like legacy gifts fell from the sky. ... Today, talking to donors about ways to support a favorite charity is both common and essential for organizations of all sizes. This conversation about an estate gift helps donors become philanthropists.”
Not disclosing a gift before death can affect the way the gift is used.
“Both the intent and purpose behind a gift are incredibly important to the receiving institution,” Pinney said. “Surprise or unknown gifts that contain difficult restrictions may affect the institutions’ ability to maximize the use of the intended gift.”
Miller added, “While a charitable organization wants to achieve or exceed expectations, the ability to comply with a donor’s estate plan may be limited by the federal or state law, as well as by the charity’s internal governing documents. Ideally, a donor and charity should fully discuss objectives (and) priorities, and confirm mutual understanding.”
Naticchioni agreed, adding disclosure also allows organizations to honor donors for their gifts.
“It’s important for donors to disclose intended gifts before death because it allows us to recognize their support and understand how they want the gift to be utilized,” she said. “It also encourages others to give to leave a longstanding legacy.”
Disclosing gifts also allow organizations to plan for the future.
“Just as you, the donor, feel the need to create a plan for the future, our organizations need to be planning for the future,” Fox said. “So, if we know that a certain service will someday be permanently endowed, then we know better how to structure our services today.”
That said, receiving surprise gifts is not all bad for an organization.
“The Tri-C Foundation often receives gifts from previously unknown donors,” Pinney said. “Frequently, we can create a new endowed scholarship fund in the donor’s name or support an existing endowed fund that will benefit students directly. This allows us to simultaneously honor a donor’s legacy and also help alleviate financial hardship on our students.
“Having the flexibility to use a surprise gift to fill this need could make a critical difference.”
Disclosing a gift is as easy as talking with an organization’s development team.
“Donors should be strategic regardless of the gift amount,” Miller said. “Ask your favorite charities for ideas. Visit them. ... Partner with the charity’s professional development staff to design a gift agreement to memorialize a mutual understanding of your gift plan.”
Naticchioni added, “Individuals should start the planned giving process by speaking to nonprofits that they want to support and building their relationship. Nonprofits are happy to sit down and discuss to ensure maximum benefits and legacy in his/her name.”