Russell James, Texas Tech professor who has been conducting an in-depth analysis of charitable bequests, found that donors who added a charitable beneficiary to an estate plan increased their average annual giving by more than $3,000 after making the planned gift. The research supports a 2007 study by Indiana University which found that donors who had included a charity in their wills gave more than twice as much to charity in annual gifts as donors who did not have a charity in their wills.
“This is great fodder for your annual fund department, VPs, and CFOs,” said Pentera President and CEO Claudine A. Donikian of the research. “Starting or nurturing a planned giving program will have a positive impact on annual fund giving and current giving.”
The James Research
James, an attorney, Ph.D., and CFP®, has been analyzing the charitable findings of a huge ongoing research study by the National Institute on Aging that is following more than 20,000 Americans, asking them the same questions every two years and even collecting data after they die. He looked at more than 9,000 answers in regards to annual and planned gifts to reach his conclusion:
Average Annual Giving Before and After Making a Planned Gift
| Prior to Making Planned Gift Average Annual $4,210 |
After Making Planned Gift Average Annual $7,381 |
James found that after arranging the planned gift, the donors’ annual gifts increased by an average of $3,171. He also found that donors made larger annual gifts in the study years immediately before and immediately after adding the charitable beneficiary. Donors revealed their largest annual gift to date when answering questions two years before making the planned gift, and two years after the planned gift they made their largest annual contribution ever recorded in the study years.
James presented the research results as part of a “myth-busting” session at the National Conference on Philanthropic Planning in October. His entire slide presentation, officially titled "Golden Nuggets from Ivory Towers: Recent Powerful Research Impacting Gift Planning,” is available here:
www.slideshare.net/generosity/planned-giving-myths
The results directly contradict the belief of some annual fund fundraisers who think that planned gifts result in a decrease in annual giving. But this is not the first study to show that planned gifts help annual giving.
The IU Study
In 2007 a study by what is now the Indiana University Lilly Family School of Philanthropy also found that planned gifts increase annual giving. While James compared giving by the same donors before and after making a planned gift, the IU study compared the annual giving of donors who had made a planned gift in their wills with the annual giving of donors who had not made a planned gift by will.
Average Annual Giving by Charitable Bequest Status
| Charity in Will Average Annual $4,490 |
No Charity in Will Average Annual $2,043 |
The study, “Bequest Donors: Demographics and Motivations of Potential and Actual Donors,” conducted a random sample of more than 2,000 people in four states for the above question. Sixty percent of the respondents were female. A total of 150 people (7.5%) reported having named a charity in their wills.
“Individuals with a charity in their will donated more than twice as much money in any given year than those who do not have a charity in their will,” the authors stated. “This difference was highly statistically significant.”
The executive summary of the study is available here: community.mtcf.org/document.doc?id=28
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