Looking to boost your incoming donations? Not sure how to do that given our uncertain economic climate? Then check out today’s episode on legacy giving. Join Lori Kranczer, lawyer and legacy giving expert, to hear her tips for creating and marketing an effective legacy giving campaign.
Listen to the Episode Here!
(3:47) Common legacy gifts for small and medium-sized nonprofits
(7:06) Develop a gift acceptance policy
(8:38) Market your legacy giving opportunities
(11:40) Consider donors’ motivations
(13:03) Having the first conversation with potential legacy donors
(16:19) Next steps given the current economy
Dolph Goldenburg (00:00):
Welcome to the Successful Nonprofits® Podcast. I’m your host, Dolph Goldenburg. Would you, Dear Listener, like more planned gifts for your organization? Could your nonprofit use some five figure, six figure, and maybe even multimillion dollar estate gifts? If so, this is the perfect episode for you. We’ll be having a conversation with Lori Kranczer. Lori is an attorney with two decades of experience in soliciting and structuring planned gifts and she is also the founder of Everyday Planned Giving. She helps nonprofits develop and launch planned giving programs; everything from structuring them to putting your materials together to training your staff and your volunteers in what they’re supposed to be doing. So, in preparation for this interview, I spent some time at her blog, and she is clearly an expert in this field. Of course, at the end of the episode we will share all of the URLs and ways that you can be in touch with Lori. Meanwhile, please join me in welcoming Lori to the podcast. Hey Lori, welcome.
Lori Kranczer (01:09):
Thank you. It’s great to be here.
Dolph Goldenburg (01:11):
So, share with me how you first got involved in legacy giving.
Lori Kranczer (01:17):
Well, it’s an interesting story. I practiced law for several years and really didn’t feel connection to what I was doing. I was working litigation, I did estate litigation, commercial litigation, and I wanted to do something more that gave me value and helped other people. So I did a lot of soul searching, a lot of networking, and I found this area where I can combine my legal skills plus marketing and relationship building. And that was legacy giving.
Dolph Goldenburg (01:46):
And so before you transitioned over to legacy giving, what kind of law were you practicing?
Lori Kranczer (01:51):
I did commercial litigation. I did estate litigation, which is basically people fighting over wills and estates. So I had that experience of working the other side of planned gifts and legacy gifts. So I was on the side of representing my client, usually a sibling or a child, in their fight over wills.
Dolph Goldenburg (02:15):
Interesting. So it sounds like maybe there were times that you were representing heirs who were upset that an organization was getting a piece of the estate?
Lori Kranczer (02:25):
They weren’t usually organizations. They were usually fights between siblings. It was truly very upsetting to watch. And I just decided that I wanted to do something more valuable with my life.
Dolph Goldenburg (02:38):
Yeah. That sounds like really messy work to be involved in.
Lori Kranczer (02:42):
It was, I almost felt like a therapist many times.
Dolph Goldenburg (02:46):
A therapist, but where your client really wants you to win. That’s an unusual therapist position to be in. And so what were your first few engagements? Or what was your initial work in doing legacy giving with nonprofits?
Lori Kranczer (03:03):
I worked for a national organization that had a very mature program and it was my responsibility to think of different ways that we can scale the program and reach more donors while also processing and closing multimillion dollar gifts.
Dolph Goldenburg (03:19):
Got it. And so I assume if they had a mature program, they probably had all of the different types of legacy gifts that donors and prospects could make.
Lori Kranczer (03:28):
Yes. I handled gifts that ranged from bequests to endowment gifts, gift annuities to trusts. I handled every type of gift that came in because it was a very mature program. They’re not the most common gifts, though. Most organizations don’t see some of the gifts that I’ve handled in my career.
Dolph Goldenburg (03:47):
Out of all of the different types of legacy gifts, what is the most common type of gift most smaller and medium sized organizations might receive?
Lori Kranczer (03:57):
There’s two. The most common type would be a bequest, which is a gift in someone’s will. That’s the most common type of planned gift in the country; I think about 80% of gifts are in the form of bequests. They are fairly simple to make and most people have a will, or they should have a will. So it’s easy to do that. I’d say the second most common gift would be an endowment. Even though some people don’t consider that to be a planned gift, it’s a type of legacy gift that a donor is making to impact the future. So they can do that as a current endowment or it could be an endowment in someone’s will.
Dolph Goldenburg (04:34):
Jumping off of that, I think the simplest one, especially for small nonprofits that don’t have very mature programs, really is just the, “Hey, will you put us in your will?” and following up to ask about it.
Lori Kranczer (04:47):
Absolutely. They’re pretty easy to close. There is not that much work to do on the organization’s side except provide some information like the legal name and the tax ID number and perhaps some sample bequest language. As the program gets more mature, an organization can do more for their program with marketing and advising donors on how they can make different types of gifts to the organization (note, NOT give tax advice). But a simple bequest is pretty easy to do
Dolph Goldenburg (05:18):
I also think it’s such an easy pitch for your low and moderate asset donors who’ve been giving consistently. They might not be able to make a $100,00 gift, but in their will they might be able to do a $5,000 or $10,000 bequest.
Lori Kranczer (05:33):
Yes, that’s exactly the point, Dolph, because many of our donors cannot give a large impactful gift from their income, but they can from their assets. And there’s two different ways of looking at it from a donor’s perspective: if the donor wants to make an impactful gift but can’t write out a check from their checking account now, they can make an impactful gift in the future through their estate planning.
Dolph Goldenburg (05:58):
Absolutely. And I know as a fundraiser and as an executive director, I’ve seen many, many people do that. Whether it’s a $20,000 gift or a quarter million dollar gift. I’ve actually joked with the charities I care most about: it’s surprising how generous I can be when I’m dead.
Lori Kranczer (06:15):
What’s interesting is that when an organization starts to promote planned giving or legacy giving to their donor base, they actually increase their donor base. Legacy giving allows more donors to make an impactful gift to the organization when they couldn’t have through a different vehicle. I’ve had organizations that opened up planned giving programs for their donors and were able to bring in gifts of jewelry or artwork; the donor didn’t need that asset anymore but wanted to do something big for the organization.
Dolph Goldenburg (06:47):
Right. I’m just going to jump in there. I do think that if, as an organization, you’re looking at taking a gift of jewelry or artwork, you probably want to get an attorney involved because there’s some IRS regs that govern how your donor can deduct that and you want to make sure your donor ends up happy about their deduction.
Lori Kranczer (07:06):
Absolutely. That goes back to what I always recommend to every organization I work with: have gift acceptance policies. So when a gift such as real estate or jewelry or artwork or anything that’s a little more complex comes in, you have some sort of procedure that’s in place for the donor to know what their responsibilities are in order to transfer the asset and get their deduction and what the organization’s responsibilities are.
Dolph Goldenburg (07:33):
And also, especially around things like real estate, to sometimes look that gift horse in the mouth because sometimes real estate is not as much of a gift as you think it’s going to be.
Lori Kranczer (07:44):
It’s not. Many donors do like to give real estate. I’d say an apartment in Manhattan is very different than some unoccupied land somewhere that’s not very marketable. You really have to look closely at what the real estate asset is that the donor wants to donate. But we always recommend that a donor have their own advisor, whether that’s a tax advisor or an attorney, when they’re doing their planning.
Dolph Goldenburg (08:09):
I know in my own nonprofit experience, and I know other colleagues with similar experiences, essentially just repeatedly turn down timeshares. Oftentimes donors, when they can’t sell their timeshare, they think they’ll just donate it to a charity. And that’s a bad deal for the vast majority of charities.
Lori Kranczer (08:28):
Absolutely. So when you have very strong gift acceptance policies, you can, as an organization say to your donor, “I’m so sorry, I can’t do this. It’s not in our policy.”
Dolph Goldenburg (08:38):
One of the things that you really promote, Lori, is making sure that organizations are marketing their legacy giving opportunities as part of all of their fundraising efforts, including their annual campaign and events, et cetera. Can you say a little more about that?
Lori Kranczer (08:56):
Legacy giving is marketing driven fundraising and donors need to be told about it or exposed to it via so many different touch points because you just don’t know when your donor is going to be ready to make that legacy gift. You want to be there when they’re ready to make that decision. And to do that you need to be in everything that’s out there. So in your annual campaign materials and in your events. It’s easy to add a testimonial or a quote from a donor in a journal or your annual report, or have a donor stand up at an event and talk about their impactful giving. That’s how you want to work it into everything that you’re doing. It makes having a legacy conversation, when your donor is ready, so much easier.
Dolph Goldenburg (09:42):
The phrase I’ve always used on that is: the gift of affiliation. So often you’ll have a legacy donor who says, “Oh, I don’t want a big deal made about me.” Whether or not that’s true, go back to that donor and say, “What we really need from you is a second gift. And that second gift is the gift of affiliation. Because if you’re willing to publicly share your story, more people are going to give to us.”
Lori Kranczer (10:04):
Social proof, as I like to call it, for legacy giving is really important because it shows that other donors are doing the same type of giving. And it also shows that other donors are investing in the future of the organization. No donor wants to give money to an organization that they don’t think has a long life span. So by doing these legacy gifts and showing that donors are investing, it raises the confidence for other donors to come in and do the same types of gifts.
Dolph Goldenburg (10:32):
Right. And I’ll share with you that, in my experience, especially with lower level major donors, so those that are giving a thousand dollars or more a year, they often run in similar circles. So after a donor has given us the gift of affiliation and publicized their legacy gift, I’ve had some people who know them who are already major donors reach out and go, “Oh I just saw that so-and-so made a legacy gift. What could I do? How can I do the same thing?” So it is interesting because it is that social proof, but also that peer pressure as well. People acknowledge that people like them are doing legacy giving and they want to be on the bandwagon.
Lori Kranczer (11:06):
Absolutely. I always recommend to clients that, when they’re doing their marketing, they do not put the very large impactful gift that they received on the front page of their brochure. Most donors cannot relate to that. Donors want to see someone that they understand and can relate to, whether that’s a teacher or someone in the community. We all tend to want to talk about our largest gift that came in. It’s so exciting, and it is exciting. But that’s not really what you want to market.
Dolph Goldenburg (11:39):
Absolutely, and that’s a great segue for us to talk about motivations that donors have for actually making that legacy gift. So obviously one of them is that peer pressure or social proof. But what are some of the other motivations that people have for making a legacy gift?
Lori Kranczer (11:53):
Well, it’s interesting. I’m doing a lot of work on changing organizations’ mindset of what they’re looking for and what they think their donors want. Legacy giving is not motivated by tax and income benefits. That’s not the first thing on the donor’s mind. It really is not. It’s value-based giving. It is aligning the donor’s values and why they’re connected to the organization with making an impactful gift. How they make the gift, the gift vehicle, comes later on. That’s not the important part. What is important is getting to why the donor wants to make the gift. And then we talk about the how. So it’s really the value-based messaging that organizations need to work on. I have some exercises that they do and it’s actually very effective for not only legacy giving, but all giving. And I tell organizations, “You already have your legacy donors, they are in your system. You’re not going out there to acquire new donors for legacy gifts. Your donors are there already. You need to figure out, from your existing donors, why they are giving to you. And not every donor is going to be a legacy donor, but you need to speak with the ones you are hoping to get a legacy gift from.”
Dolph Goldenburg (13:01):
That makes a ton of sense. When you’re going out and you’re doing that messaging and you’re having those conversations, what are some of the important things for you to be keeping in mind?
Lori Kranczer (13:12):
Having a conversation with a legacy donor is not about talking about the gift, at first. It’s talking about all the reasons why the donor wants to give, why they started giving to the organization in the first place, and why they continue giving. All those value-based messaging conversations lead to the legacy gift and it makes it easier when fundraisers go in to speak to their donors about legacy giving. I always tell them, “Just take the money off the table. You’re not going to be talking about that. So don’t stress about having to talk about a gift or having to talk about money when you are first having that conversation with your donor. It’s all about the donor. Don’t even talk about the organization. Talk about why the donor has been giving and what they love about the organization.”
Dolph Goldenburg (13:53):
That makes a ton of sense. And I do not know why it reminded me of this, but it did. Gosh, this is about 20 years ago, when I was the development director at a social service organization. We actually got a ton of legacy giving prospects from a program that we called $5 for Food and Fuel. We essentially asked people to give $5 a month and we used it to provide food and utility assistance to low income individuals. I just cannot tell you how many checks we would receive for $5 every month from individuals. And when you looked at the writing, you could tell that these were often people in their seventies or eighties. It’s what, in some fundraising circles, would be called the widow’s mite; these are often older people on very fixed incomes and they found $5 every month. But we also found those people to be very fruitful prospects for leaving us something in their wills, even if it was $1,000 or $5,000.
Lori Kranczer (15:00):
Absolutely. I like to segment our donor bases into different categories of prospects. For example, you have your most engaged, like your board, other leadership positions, and volunteers. There are many different categories, but I want to point out the one you just mentioned because they are very, very important. You have your long-term, frequent donors, regardless of the amount that they give. It could be $5 a month like you mentioned, or it could be $100 a year, once a year. Maybe they’re giving three times a year. Maybe it’s the donor that sends back a crumpled dollar bill every time they get an envelope from you. I’ve had those too. They’re wonderful legacy donors.
Dolph Goldenburg (15:39):
Absolutely. And I’ve found a really powerful pitch, especially for a donor who gives a lower amount, like $100 a year, to be pointing out that it does not take that much of a legacy gift that’s earmarked to go into a donor advised fund or an endowment to generate that $100 every single year, even after that donor is gone. I found that to be a really powerful pitch with some donors.
Lori Kranczer (16:02):
I tell everyone there is a planned gift for everyone, no matter how they want to give, no matter how much they have to give. There is a type of gift vehicle for everybody to make an impactful gift.
Dolph Goldenburg (16:15):
And so Lori, right now, just to bring this home for our Listeners, you and I are recording this on a day when the stock market is falling. It’s about 10:30 in the morning, so I’ve not looked at it. But I do know that European and Asian markets were falling when I got up this morning, so I’m assuming our stock market is, too. So I’m sure a lot of our listeners are thinking, “Well, this sounds great, but all of my donors have lower assets now than they did before.” So for an organization that has not really done much of anything with legacy giving or planned giving at this point, what should their next steps be over the next few months?
Lori Kranczer (16:50):
If they haven’t planned a legacy giving program yet, they need to start on their why; start on their case statement why donors want to give to the organization. It doesn’t have anything to do with the assets the donor has now; it’s their connection with the organization. And if they want to proceed, then programs can start asking or accepting types of gifts. You may not get that bequest you’re requesting for 20, 30, or 40 years now. So if you start to connect your donors with why they want to give, you don’t have to worry or be concerned about the stock market because donors will want to give regardless, they’re not looking for those tax breaks.
Dolph Goldenburg (17:29):
I love your approach on that. What a great way to further cultivate your donors as the market is crashing to say, essentially, “Will you consider us out of your future assets?” So your assets in 10 or 20 or 30 years. Even people in their seventies and eighties are not thinking, “Oh I’m going to die tomorrow.” They’re looking out 5, 10, 15 years. I love that.
Dolph Goldenburg (17:49):
So Lori, I want to make sure that we have time for the off-the-map question because we are very rapidly running out of time in this conversation. This is an opportunity for our listeners to get to know you a little bit as a person. I understand that you live in a 100 year old Victorian home in Brooklyn and I think I even have heard that your home can be seen in some TV shows.
Lori Kranczer (18:17):
Yes. We live in a wonderful neighborhood in Brooklyn that has these old, Victorian houses. Actually, the house is 115 years old and I think we’re the fourth owner of it. I grew up in Brooklyn; I’m actually third generation Brooklyn and my daughter is fourth generation Brooklyn. We just love these old houses with the back staircases and wraparound porches. There is quite a bit of filming that goes on in our neighborhood because it can easily pass for a Virginia suburb. So we’re constantly getting notices under our door to film in our house and we’ve had three film shoots in our house.
Dolph Goldenburg (18:55):
Wow. Can you tell us what shows we could see the inside of your house on or no? Is there a contract that prevents you from doing that?
Lori Kranczer (19:03):
That’s interesting. I’m not sure if there is or not. I can tell you we did have Discovery Channel here recently.
Dolph Goldenburg (19:12):
Very cool. That might be worth getting cable to try to see you on Discovery Channel. That’s awesome. So, Lori, our listeners and I are incredibly grateful to you for sharing your expertise on the podcast and I feel certain that many listeners want to know how they can get in contact with you. So, before I share that, Dear Listeners, I want to make sure that you know that Lori has an incredible legacy giving quiz at her website: everydayplannedgiving.com. I checked the quiz out and I have to tell you, it is asking every single right question that you should be asking as you’re thinking about your legacy giving or planned giving program. So I would strongly suggest that you visit everydayplannedgiving.com and take that quiz. It’s even ideal for you to take it if you reach out to her to have more of a conversation so that way she can see those results and it will help her tailor that conversation with you.
Dolph Goldenburg (20:05):
I also want to make sure you were aware that she has a very active Facebook group. So if you go to that Facebook group, she’s doing live seminars, webinars, there’s discussions, et cetera. So make sure you search on Facebook for Legacy Giving Made Simple. That is the name of her group. We will also link to it in our show notes. Finally, I want to make sure that you know about her upcoming 12 month planned giving program, which is a series of courses and resources to expand your planned giving program. So please make sure you check her out at everydayplannedgiving.com and also visit her Facebook group, Legacy Giving Made Simple. We will post all of those links in the show notes. Lori, thank you so much for coming on the podcast today.
Lori Kranczer (20:56):
Thank you. It’s been great to be here.
Dolph Goldenburg (20:58):
So if you were just Googling Discovery Channel to try to figure out what show you could see Lori’s house on, don’t worry about it. Keep looking for that house. And here’s why: you did not need to write down any of those URLs. We’re going to have them all at our show notes at successfulnonprofits.com. Now, after you have taken Lori’s quiz, please take a few minutes to support this podcast by sharing it with a board member or colleague. Sharing the podcast tells the world that you are constantly seeking professional development opportunities and it also helps your own nonprofit get stronger and, in this case, get more legacy gifts. Now, if sharing the podcast is not genuine for you, then I would appreciate a quick review on your streaming app of choice. It is easy and you can do it literally just by picking up your phone and doing it right now. That, Dear Listeners, is our show for the week. I hope that you have gained some insight to help your nonprofit thrive in a competitive environment.
Dolph Goldenburg (22:02):
I am not an accountant or attorney and neither I nor The Goldenburg Group provide tax, legal, or accounting advice. This material has been provided for informational purposes only, is not intended to provide and should not be relied on for tax, legal, or accounting advice. Always consult a qualified licensed professional about such matters.