Discussion Post #11 – Types of Gifts – MPA 671
From SP2022 MPA 671-QL Marketing and Fundraising
Some organizations really promote and rely on planned/legacy gifts. What are some pros and cons of this type of gift? Explain your reasoning.
Discussion Post # 11
Organizations use planned gifts to secure their future. Planned legacy gifts allow donors in non-for-profit organizations to choose bequest as a way to leave their legacy. These donors set a percentage of their assets for distribution in the organization. Thus, bequests could come in for life insurance policies, retirement plans, or just a portion of the organization’s assets. Besides, donors who need to leave should clarify their intent to realize their gifts appropriately. When an organization steward planned legacy gifts to remain in their will over time, they benefit by investing the gifts.
Planned gifts give non-for-profit organizations future funding. Several ways exist that enable an organization to provide the planned gift (The University of Alabama, 2022). Occasionally, these organizations can invest the planned legacy gifts for a long time. For instance, if an organization receives 25 percent of its annual revenue from planned gifts, it secures its future and promotes its financial performance. Also, planned gifts give the heights return on investment of all types of fundraising. The benefits that accrue with this are reduced costs of managing the gifts.
However, it can take an organization several years before accessing the planned gift money. The organization will need to establish mechanisms that will safeguard such investment. As a result, there would be considerable efforts to set up a planned program with foresight and planning. The bureaucracy to manage planned gifts can be detrimental to its success. In most cases, the board members may delay the investment decision because they are unwilling to manage the donations.
The organization’s contribution to legacy gifts annuities is irrevocable under the organizations’ control to maintain the annuity. Income rates of those gifts are lower than the standard annuities. Thus, donors may not show interest in the legacy gifts, making the bequest less profitable.
References
The University of Alabama (2022). Types of Gifts: Week 11: Lecture Notes
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