1. Identifying Your Best Planned Giving Prospects: It Helps To Know Where to Look Lawrence C. Henze, J.D. Managing Director Target Analytics

2. Page #2 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Your Presenter  Managing Director, Target Analytics  Law degree, University of Wisconsin-Madison  13 years as a development officer –Chief Development Officer, Dir. of Planned Giving  15 years as a nonprofit marketing/predictive modeling consultant –Econometrics (co-founder) –Noel Levitz –Core Data (founder) –Target Analytics (formerly Blackbaud Analytics)

3. Page #3 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Our Agenda  Planned Giving as part of the giving process  Donor Development and Planned Giving Myths  Planned Giving profiles  A brief look at planned giving marketing

4. Page #4 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving as Part of the Development Process Eliminating the Silo Approach

5. Page #5 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving as Part of the Development Process  Life on the farm –Think “free range”, not pens or silos  Ultimate giving is both a journey and a destination  Making the journey borderless encourages donor development

6. Page #6 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Eliminating the Silo Approach  Do you have an integrated plan?  Have you investigated opportunities for using communication and donor relations efforts for multiple purposes?  Do you reward team efforts?  Do you encourage “out-of-the-box” thinking?

7. Page #7 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Success: The Peaceful, Integrated Fundraising Farm

8. Page #8 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Remember…  Perception is reality –Planned giving is a major gift  Donor-centered is not a staff interpretation –Get acquainted with your donors  “We have always done it this way” is not necessarily a statement of strength

9. A Little Bit of Knowledge What you know about planned giving prospects will increase your marketing effectiveness

10. Page #10 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. The Donor Pyramid Loyal Donors and Ultimate Giving

11. Page #11 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Donor Profiling  High likelihood and high- level gift potential  Major and capital giving prospects  Planned giving potential is secondary but viable  Lower likelihood but high- level gift potential  Need to be sold on your mission  Longer term cultivation  Second-tier solicitation strategy  High likelihood and low to mid-level giving potential  Annual giving upgrade  Consistent annual giving  Planned giving as a primary strategy  Low likelihood and low- level gift potential  Minimize investment  Consider reduced resource application

12. Page #12 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Ultimate Giving  Every individual has an “ultimate gift”  Ultimate gifts may be any level, any type (including $0)  Find ultimate giving profiles, develop appropriate marketing strategies, close more gifts!  Ultimate gift a better term than planned or major gift?  Still true after all these years: most bequest and annuity prospects will never consider a major outright gift

13. Page #13 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. The Relationships Between Donor Types  Is annual giving the basis of: –Major giving success? –Capital campaign success? –Planned giving success?  Therefore, do we underestimate the value of the $20 annual donor? –Do we over-solicit these individuals? –Do we recognize their loyalty?

14. Page #14 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. What We Know About Donor Types  Within an organization: –Annual and major profiles differ –Major and planned giving profiles differ  Among all nonprofits –Annual and major giving profiles vary Type, location, solicitation style –However, planned giving profiles are very consistent Lifestyle behavior Use this consistency to your advantage

15. Planned Giving Profiles Do-it-yourself Options

16. Page #16 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. What Are My Options?  Do It Yourself –Data mining –In-house modeling  Prospect Screening/Vendor Options –Generic Modeling –Wealth Identification –Custom Modeling

17. Page #17 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Types of Data  Types of Institutional Data –Demographic –Giving History –Activities/Relationships –Transactional –Attitudinal –Interests

18. Page #18 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Whetting Your Appetite  Study the relationship between giving longevity and ultimate giving  Alternatively, the relationship between giving levels and ultimate major giving behavior

19. Page #19 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Satisfy the Craving for Knowledge  Create a file of major donors using number of years giving (prior to first major gift) –20 donors, range from 2 to 18 years  Plot data using Excel  Study AND interpret the trends

20. Page #20 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Major Giving Analysis

21. Page #21 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. What Did We Learn?  Findings –For example, major donors make an average of 9 annual gifts prior to reaching major donor status (also check mode or median) –Establish a threshold, such as 6 annual gifts, to identify potential MG prospects –Also study planned giving behavior and its correlation with loyal annual giving

22. Page #22 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. What Did We Learn?  Conclusion: A significant number of major donors exhibit “trigger point” behavior  You are “growing your own” major donors  When donors activate these trigger points, they appear on your major donor radar screen  This is proactive data mining

23. Page #23 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. What Did We Learn?  And what do we do with this information?  Assume the following: –A major gift equals $5,000+ –For 60% of the file of major donors, their last gift before $5,000+ was $2,000 –For 70% of those individuals, their last gift before $2,000 was $500

24. Page #24 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Beginning Level  Time-of-Year Giving –Create a pool of all donors over the past 10 years –Create a subset of donors giving in at least 6 of the 10 years –Plot the months/quarters of their gifts –Identify the habitual donors  Why is This Important? –Ultimate giving –Cost savings

25. Page #25 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Beginning Level – Age Analysis

26. Page #26 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Age and Planned Giving

27. Planned Giving Profiles Using History to Ensure Your Future

28. Page #28 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving Facts  Bequests constitute almost 90% of all planned gifts made –More than 80% of these are unknown at present  Annuities constitute another 5-6% of all planned gifts  You can have a successful planned giving program without focusing on trusts (the complicated stuff!)

29. Page #29 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving Facts  You may have more dollar potential in planned giving than major giving  Why people give (NCPG survey) –97% say they care about the charity –87% desire to do something special –35% tax planning –22% know charity’s representative

30. Page #30 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving Facts  We often consider planned giving to be a second- tier strategy  Extremely passive solicitation methods  Appeals are broad based and require request for more information  Expectations are unreasonably low –1% response rate to planned giving mailings

31. Page #31 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving Propensity

32. Page #32 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving by Gift Type  Each “type” has different traits –Annuities –Charitable remainder trusts –Bequests  The two faces of bequests

33. Page #33 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Variables and Planned Gift Types?  Age?  Wealth?  Credit Usage?  Past Giving Behavior?  Type of Organization?  Relationship to Organization?  Marital Status?  Volunteering and other loyalty measures?

34. Page #34 © 2008 Blackbaud This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Summary and Questions  Contact me: Lawrence Henze Lawrence.Henze@Blackbaud.com 843-991-9921  White Papers: http://www.blackbaud.com/resources/white- papers.aspx