The Role of the Board Member in Planned Giving

So you’re managing a nonprofit and overseeing the day-to-day operations. You have an active board of trustees that meets quarterly to ensure things are running smoothly. The question is: Could your Board be doing more to ensure the success and longevity of your organization? And often, the answer is YES.

We all know an active board of trustees is critical to the fiscal well-being and subsequent programmatic success of any organization. Effective boards function to not only support and advocate the organization’s mission but also to oversee policy-making, ensure fiscal responsibility, and hire and evaluate executive leadership to run the organization. But engaging your board on another level, such as  involving board members in strategic planning, keeping them informed of program and financial successes, and engaging them in donor cultivation and solicitation, will also work to your advantage by preparing your organization to begin a planned giving program.
A robust planned giving program is essential because it helps ensure financial sustainability and provide perpetual funds to support an organization’s mission.
Once in place, the first step is to help your board understand the role that a planned giving program plays in the long-term effectiveness and sustainability of the organization. We recommend your organization carefully consider the following factors that are integral to the success of a planned giving program and begin conversations with your board around the following topics:
Mission and Strategic Planning
First and foremost, your board must believe in and be able to communicate the organization’s mission and long-range goals. A mission briefly tells the purpose of the organization and how the organization makes a difference to the constituency it serves. The mission drives all facets of the organization and serves as the foundation upon which the strategic plan is developed.

In addition to a clear and compelling mission, it is necessary to have a board-approved strategic plan in place. A thoughtful plan lends credibility to an organization and conveys to the donor that the organization is being proactive about its future.
A well-crafted strategic plan will suggest future goals, a timeline, as well as the resources needed to accomplish those goals. For example, a not-for-profit social service agency with a plan to increase its annual fund and add client services over the next three years will appeal to potential donors more than a similar organization without a long-term growth strategy to add new programs and sustain them.
A plan that describes new programs or services also gives potential donors an opportunity for gift designation. When considering a deferred gift to an organization, the donor will want to know that the organization is true to its mission, what the long-range plans and sustainability practices are for the organization, and how future gifts will be used.
Gift Acceptance Policies
Organizations only involved in annual fundraising activities rarely have gift acceptance policies as most of their giving is in the form of cash or marketable securities. Therefore, these policies are often overlooked when an organization begins a planned giving program. The drafting of a gift acceptance policy should involve the organization’s leadership. The process of drafting a gift acceptance policy is an opportunity to educate the board about the variety of gift instruments available, the resources required to accept them, and alternative ways they can contribute to the organization.
A functional policy should address: (1) gift restrictions; (2) naming opportunities; (3) minimum gift requirements; (4) pledge restrictions; and (5) types of gifts that are acceptable to the organization. While it may be difficult to determine the types of gifts an organization will accept, this may be the most critical component. The board needs to make sure that the organization has the resources necessary to manage and be responsible for the different types of gifts, particularly as they relate to deferred gifts. The types of gifts that should be considered include cash, securities, real estate, life insurance, personal property, charitable gift annuities, pooled income funds, charitable lead trusts, charitable remainder trusts and bequests.
The board should: (1) be aware of and consider any reporting requirements associated with the various types of gifts; (2) have a policy for acknowledging these gifts; and (3) review the policy annually. Undesignated planned gifts are most desirable because an organization will have different programmatic and operational needs at different times, and this policy should state how undesignated gifts will be used. An organization will often receive unanticipated, undesignated bequests and an established, clear-cut policy will eliminate any and all confusion or debate on how to best make use of the donation.
Funding Your Planned Giving Campaign
A planned giving campaign can be a long and complex process that requires funding for training, marketing, staff time, donor cultivation and donor recognition. Planned giving brochures, newsletters, gift or recognition societies and prospect presentations will all contribute to a more successful campaign. The board should approve and allocate the funding needed to implement a planned giving program.
Moreover, each board member should be willing to make a planned gift according to their personal financial ability, identify potential donors and introduce them to your executive leadership. Financial support from the board conveys to the donor that the board supports the vision of the organization and is committed to its long-term success, thus instilling confidence. Not all board members will be able to give at the same level but many may be willing to include the organization in a bequest or name the charity in a life insurance policy. Many board members will be reluctant to ask a friend or colleague for a gift but can be very helpful in making the introduction and accompanying staff on a fund raising call. At minimum, board members can help by bringing guests to cultivation events, sending thank you notes to new donors, or attending recognition events.
It is most important for the CEO and the board to understand that a planned giving campaign is a process. A successful program will take time. It’s not uncommon for years to pass before the organization benefits from a donor’s generosity through a planned gift. However, we recommend taking these suggestions into consideration as the first step in developing a planned giving program. Keeping these success factors in mind throughout the development process will ultimately help you achieve long-term financial security and stability for your organization.