Benefits to the Charity

(Added 1/12/2011)

Q

My boss reports our planned giving numbers on the basis of realized bequests, and not on the gifts that have been established during the year. Last year was particularly good from that perspective - seven people died and left us more than $1 million but it doesn't represent the work that I did. But if I reported out the numbers based on what gifts were established, I wouldn't look very good. I feel like I should keep my mouth shut, and let the trustees think I'm doing great, but something tells me that they should know the truth.

A

Truth, when it doesn't put anyone's life in danger, is a good thing. In this case, however, as with so much about planned giving - and, let's face it, life itself - truth can be complex. The trustees are getting the wrong impression about your abilities if they think that you brought in - that you "raised"- over $1 million last year. You didn't. Unless you were responsible for the demise of any of your donors, all you did was take phone calls and open letters that informed you that the money was coming your way. Quite frankly, you're being rewarded for the wrong things. Anyone can open a letter. If anyone should be congratulated for a realized planned gift, it's the person who was in your office 20 years ago, the guy or gal who was responsible for securing the commitment. Or the person who stewarded the donor after. Or the person who stewarded the donor after that . . .

It's not all that complicated, but far too many executives and trustees don't understand the difference between what comes in to a charity as a result of someone's death and what is established by the work planned giving officers do each year. Just because we probably won't be around when the fruits of our labors are eventually evident doesn't mean that planting the seed should play second fiddle to a check coming through the door.

Your daily toils should be rewarded. In today's metrics-crazed nonprofit management environment, you should be able to report out the number of visits and proposals you create each year, as well as the number of gifts both irrevocable and revocable you are responsible for securing. That information, along with the amount that was actually realized, should be part of the reported planned giving progress at your charity. And don't let anyone tell you that getting a bequest commitment is unimportant. That it is revocable should be irrelevant:

  • you're doing your job,
  • almost all bequest commitments are realized as intended, and;/li>
  • the vast majority of realized planned gifts are bequests - and not trusts or gift annuities. There's money in bequests, and it is the foolish charity that doesn't reward efforts to secure them.

Many deferred gift commitments also have a dollar value attached to them. And again, more than meets the eye ought to be reported: the current value of the amount that funds the commitment as well as its present value will provide the best picture; that is, to say only that you raised a million dollars when a donor funded a unitrust for $1 million is disingenuous. What you actually raised in gift commitments is a matter of some opinion, but the results of a legitimate growth and discounting process - such as the methodology the IRS uses to determine a remainder value - are certainly not beyond the comprehension of anyone who really cares. Trustees and senior vice presidents of development are in that group, and they need to engage in understanding the realities and results of fundraising.

The ethics of the actual process are not the concern here (next time). What is important is that organizations are truthful about reporting what they raise. You are right to be concerned . . . and you are not right to keep your mouth shut.

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