Implementing a Basic Planned Giving Program
Once you’ve decided to implement a planned giving program for your library, here are eight ways to promote it:
- Clearly articulate your mission, main functions of your organization, and identify ways large and small gifts could impact your work.
- Educate your board and staff about planned giving opportunities and the importance to the Library.
- Develop or purchase informational materials for mailings to prospective donors.
- Let supporters know about planned giving opportunities through your newsletter.
- Create a web page for planned giving opportunities.
- Promote the concept of planned giving by using brochures, bookmarks, advertisements, articles and programs.
- Prepare a response card.
- Attend seminars, workshops or classes sponsored by other institutions to learn more about planned giving.
Types of Planned Gifts
Planned gifts can come in many forms. Some require little work on the part of the Library other than letting the donor of the options of planned gifts and how to phrase the bequest in their will or to designate the Library as the beneficiary.
1. Outright Gifts
Charitable bequests are gifts of any property (real or cash) made by naming our library as a beneficiary in a person’s will. This is a simple method and the number one way of making a planned gift by donors. The donor can also bequeath a particular asset or a percentage of their estate rather than a dollar amount. This is the easiest way for libraries to work with planned gifts.
Each year thousands of individuals exercise the privilege of determining the final distribution of their estates. Bequests can take various forms: a general bequest, a residuary bequest, a percentage bequest, or a restricted bequest.
- A general bequest is one of the most popular ways to make a charitable gift by will. The donor simply leaves a specific dollar amount to the library.
- A residuary bequest is given to the library after all (or a portion) of an estate owner’s property after all debts, taxes, expenses and other bequests have been paid.
- A percentage bequest is expressed as a percentage of the estate or of the residuary estate.
- A restricted bequest restricts the bequest for a specific purpose. This can include setting up an endowment. This type of bequest should be made in the broadest terms possible consistent with the donors wishes.This guards against the possibility of the purpose of the gift becoming obsolete (such as the elimination of a specific collection, program, department, etc.).
Donors will work with their attorney and/or financial advisor to determine the amount to leave your library in their will. Your job is to work with the donor to explain your areas of need so the donor’s desires are met. It is helpful to advise the donor to be as broad as possible in making his or her bequest.
Be honest and let your donor know that the library’s world is one of changing technology, emerging customer needs, and ever-expanding formats. It’s hard to predict what your library will be like years from now when you receive the bequest. For example, if you have a donor that is interested in supporting your music collection, advise the donor to word the bequest “for the purchase of music materials and resources,” versus a specific format.
In many cases, we don’t know that someone has left a bequest to the library in their will. We find out after they have passed away. Libraries need to identify donors, customers, and patrons who have the capacity and inclination to leave a bequest - and to work with them while they are alive.
You will need to provide the correct wording to your donor or their attorney as to where to leave the gift; name of a specific program, etc. For example, do your receive gifts in the name of your library? Its board? Your library Foundation? Your Friends group? Or do you have another charitable organization? You will also need to provide your federal tax I.D. number.
2. Life Insurance
Life insurance gifts can include whole life, universal, and other forms of life insurance policies. Donors can contribute all or part of a policy to your library when you are named as a beneficiary. The donor retains ownership of the policy and has access to the policy’s cash value. Since the donor retains ownership, no charitable income tax deduction is allowed upon making the library the beneficiary. Once the donor passes away and the proceeds are paid to the library, the donor’s estate will be allowed a charitable estate-tax deduction. Donors need to work with their insurance provider to designate your library as the beneficiary.
3. Retirement Plans
Retirement plans are another easy way for the donor to make a gift to your library. Retirement plan benefits represent a major portion of the average person’s estate. Through the retirement plan provider, a donor can designate your library as a full or partial beneficiary. Again, the donor can name a specific amount or percentage. This gift can be designated when the fund is first established or changed at a later date. The plan administrator will provide a change of beneficiary form upon request. Giving in this way can help maximize tax savings.
Next: Making the Ask