This is the second part of a post by nonprofit researcher Melissa Brown, drawing practical advice from academic research. Click here to see Part 1.
Approximately two-thirds of U.S. households give to charity in a year (Philanthropy Panel Study), yet just over 5 % of decedents age 50 or over transfer assets to charity via a bequest in a will. And those estates are most likely to be from people with no children.
Why the gap? Most potential donors have probably never been asked for a bequest gift. Michael Rosen reports that a third of adults in the U.S. are willing to consider putting a charity in their will, if asked--even people with children. So why aren’t more households asked?
The Lilly Family School of Philanthropy finds that the vast majority of U.S. donor households give, on average, less than $2,500 combined to an average of 3 to 8 interest areas. At those gift amounts, these “middling” donors don’t rise to the level of a potential major donor for most organizations. And, for the vast majority of charities in the U.S., asking for bequest gifts is only cost-effective if it is minimal and impersonal: in brochures; “contact us if you are interested” statements on annual campaign reply cards; etc., but little else.
If these prospects aren’t asked for bequests by fundraisers, where else might they be asked? Research shows that when attorneys and financial advisors ask about charitable causes, and ask in specific ways, the discussion has the potential to increase the percentage of wills that include charity bequests. If widely implemented, estate planning asks could increase charitable giving via bequest in significant amounts.
A study presented at the Science of Philanthropy Initiative’s (SPI) partnership conference last November reveals how people in the U.K. responded when asked about making a charitable bequest during the estate planning process. The Science of Philanthropy Initiative is a long-running research program organized at the University of Chicago. One of its principal goals is to engage nonprofit organizations and charities in research to conduct field tests of ideas to see what works to raise more money for charity.
With support from SPI, the U.K. organization Remember A Charity partnered with Michael Sanders, now at the Behavioral Insights Team and Sara Smith of the University of Bristol. Together, this collaboration worked with The Co-Operative Legal Services to tackle the knotty problem of asking people to leave a charity in an estate plan. Sanders and Smith presented the findings at the SPI conference.
The Co-Operative Legal Services matches solicitors with people interested in making a will. Callers tended to be “middling” net worth for the U.K. and complete the process in a series of telephone calls. In the second call, when callers start distributing assets to heirs or others, the scholars collected data for a time where no callers were asked to consider a charitable bequest. This established a baseline of 5% who did include a gift to charity in their will, even when no one asked.
Sanders, Smith and colleagues developed alternative phone scripts for that second call, and over four months, attorneys were randomly assigned one of two charitable bequest questions.
1) “Now that you’ve looked after your family and friends, I’d like to talk you about charity. Would you like to leave a charitable gift in your will?” or
2) “Now that you’ve looked after your family and friends, I’d like to talk to you about charity. Many of our customers like to leave a gift to charity in their will. Are there any charitable causes that you’re passionate about?”
Compared with the baseline period, those asked about leaving a gift to charity were more likely to leave a bequest (people without children) or more likely to leave a higher amount as a charitable bequest (people with children).
The script that combined the social norm (“many of our clients”) with an inquiry about the caller’s passion for a cause led to the greatest changes. Even before taking into account whether the testator had children, 10.4% of completed wills included a charitable bequest with the “simple” ask (compared with 5% with no ask) with an average amount of $5,291 (conversion at 1.7 dollars per British pound).
Among testators hearing the question with the ‘social norm’ component, 15.4% made a charitable bequest, and the average amount equates to $11,133.
Based on this single study (so far), it seems a useful strategy is to offer information that “many people make charitable bequests” and then to ask if there is a cause the individual cares about. This is likely to increase the number of bequests from people with no children and the amount of bequests from people with children. You might even consider adding the language from Russell James’s research to ask, “Is there someone you’d like to honor by making a gift to a charity?”
For gift planners working for a specific charity, a (not-yet-tested) idea might be to combine planning options. For example, you might say, “I know you are interested in making a gift through your will. Many of our donors are also interested in other ways to get a tax deduction now and make a gift to charity. Would you like to explore other ways of making a gift?” Or, “Now that you’ve made plans for [client’s first priority], are there any other programs/activities/visions at our organization that you are passionate about?” Or even, “Thank you for this gift. Is there anyone in your family you would like to honor with another gift in your will?”
For the full paper prepared by Drs. Sanders and Smith, see http://www.bristol.ac.uk/media-library/sites/cmpo/migrated/documents/wp326.pdf
Author: Melissa S. Brown
Get this Resource: The Bequest Pipeline: How Wide? How Long? How Strong?