The Pentera Blog
COVID-19 - Claudine and Pamela Davidson Discuss Why This Is a Great Time for Gift Planners to Strategize
4th in a series
By Claudine A. Donikian, President & CEO, Pentera, Inc.
Pentera CEO Claudine Donikian recently spoke with Pamela Jones Davidson, president of consulting firm Davidson Gift Design and former executive director of planned giving and associate counsel at the Indiana University Foundation, about how organizations are handling these uncertain times due to the coronavirus. Here are excerpts from their conversation.
Claudine: Hi, Pamela. As you know, I have written some recommendations on how to work with donors in these unprecedented times. I also always like to check in with other experts in the field in order to get into the nitty gritty of what's going on in organizations. You've worked in planned giving, and you now have been a consultant for a long time; you've also been through a couple of economic downturns, though this is so different. What kind of outreach are you advising clients to do with their donors?
Pamela: First of all, I want to say that it is a marvelous idea to do these conversations. My main response to your question is: We have always known in planned giving that it is all about relationships. So this situation is still about that. Organizations that are unable to meet with people and hold events need to come up with unique ways to maintain those relationships.
If I worked in an organization right now, I would get 3 x 5 index cards or create a spreadsheet and write on it the names of key donors to be called. And I would ask them, "How are you doing? What are your thoughts right now?"
Claudine: Yes, relationships are really the key to success in planned giving. In addition to focusing on donor relationships, are there other things that gift planners could be doing? Maybe this is an opportunity to reset, to rethink, to be more strategic.
Pamela: This could be the best time ever for a fundraiser to think, "What can I do in the next year that is concrete and pragmatic and will move gift planning along?" Go back to your strategic plan and say to yourself, "What are 10 action items I can do to move that strategic plan along?" Maybe you say, "I am going to talk to five new people a month and have a substantive conversation." Or "What are we doing about professional development, and how can it be better? It could also be things like, "I am going to invite more of my colleagues to the next Pentera Webinar!"
We also need to take a look at how important our internal colleagues are. What can I do to make my internal team believe we are in this together, that we really are a team? When I was at the IU Foundation, the controller stopped in one day and said, "Accounting is only here to support development." That's the kind of attitude you want to foster.
Here's another story: One of my colleagues spent a lot of time trying to convince our dean to put money in the budget for planned giving. And finally the dean said, "I get what you're saying: You want me to invest money now for gifts that will come in when I am no longer dean." And then he added, "And I'm willing to do it!"
You can build your team. This is a big chance to turn over a new leaf because now all things are possible.
Claudine: Those are great stories to illustrate the importance of getting internal buy-in for planned giving and also of goal setting.
You've probably heard that some organizations don't want to send out direct solicitations right now. Of course, the marketing materials that Pentera creates for clients aren't really solicitations; they're educational pieces, and our clients are providing their donors a service by sending them out. They have a call-to-action offering to send a more in-depth follow-up booklet that will further educate the donor about a topic that interests them—as opposed to direct solicitations for gifts. While those who do request a booklet can become leads for an organization, it's very rare that a planned gift is made as a direct result of a planned giving marketing piece.
We have recommended that clients avoid topics on estate planning this spring to avoid any perceived insensitivity with everything that is going on. We recommended they pivot and use a topic on the new CARES Act instead and include empathetic messaging, such as letting donors know they are there for them.
Pamela: That's stellar advice. That's saying something helpful and encouraging. I'm from Indiana, so I would call that more "Hoosier-like" (more friendly). My former boss would say our goal with marketing is education and awareness—and that is exactly the way Pentera sees it. These marketing materials are definitely for education, not solicitation. There's a two-step gift process: Cultivation, which leads to solicitation. And education comes even before cultivation. It is not at all the same stage of the gift-planning process as solicitation.
Claudine: Yes, exactly. The vast majority of clients have decided to do the topic on the charitable implications of the CARES Act. Just a few clients have chosen to send out materials on estate planning and gift annuities (mainly healthcare organizations and social service organizations), and only a very few who have decided to do those topics but delay sending the materials for a month or so. I do understand all of the approaches. This is why I've never been a fan of giving one-size-fits-all advice. Advice never applies to all organizations.
Pamela: I understand that some organizations are holding off, maybe not sending out a bequest topic. I think that once we get into June-ish, the sentiment will go back toward normal.
Claudine: I agree. There is a fine balancing act between not wanting to be insensitive but having this mission to educate people about these opportunities. There is no better time to do a charitable gift annuity, for instance, than in a down economy because of the financial security they bring. And people should always be sure to have an up-to-date estate plan. I've heard from several friends that they have updated their estate plans as a result of what's going on, and estate planning attorneys are saying they are getting a lot of calls from clients to do the same. What are your thoughts?
Pamela: Yes, everybody should be thinking about estate planning right now. When the economy went down, people started quaking in their boots. But they also are saying, "I am going to make sure where all my documents are." And many have found they need to do some estate planning. My husband said to me, "My documents are locked in a safe deposit box." Where they are totally inaccessible! So there is a lot that can be done in a time like this.
This is a good time for donors to simplify. No one wants to manage assets later in life. So take care of things by turning appreciation into income. I have a friend who bought a row house in Washington, D.C., a few years ago, and it is now worth $2 million. Two million! But she can‘t get a plumber out there to fix a leak! So simplify: Use it to make a gift that is going to pay you income, and with income-tax breaks and non-recognition of appreciation (you can even sell a portion, too), it's a very smart gift plan."
With the stock market rocking and rolling, there's never been a better time for a gift annuity, as you mentioned. When the market rolls back up, take money out and do a deferred charitable gift annuity. That's a diversification strategy that's perfect for this market.
I do have a feeling that giving will be slow going until people feel more rock steady, and it's hard to predict when that will be. I suspect that many donors will wait and see. But the gift counts the same in December as it does now.
Claudine: Meanwhile, we are telling our clients, "The people who receive your materials already love you. They believe in your mission; so educate them about ways that will allow them to have an impact."
Pamela: Exactly! Offering some education and awareness versus none is always an advantage. Consistency carries the day. If an organization does a standard marketing piece, then why not continue that? To disrupt normality? No! Sticking to the routine makes sense; it's not insensitive; it's routine. And it's a service that donors appreciate. You never know when a donor or prospect is ready to hear your message; that's the danger of interruption. It's like raising teenagers: you have to repeat and repeat before they hear it. Having a steady message will carry the day all day long.
Claudine: Thanks so much for sharing your thoughts, Pamela. You're always so insightful.
Pamela: It's always so good to talk to you and hear what you're thinking about things!
Recommendations to clients from Pentera CEO Claudine Donikian, JD, MBA
These are unprecedented times because of the rapidly changing landscape due to the coronavirus. We have the following recommendations for our valued clients:
- Steward donors. Personal updates about happenings at your organization and letting them know that you will be rescheduling any canceled events will be reassuring.
- Schedule phone or virtual meeting with planned gift donors. Scheduling calls and using other technology such as Facetime with donors would be the preferred alternative, even with local donors.
- Serve as a resource to donors. While only the occasional gift can be traced directly to the marketing resources we provide, it's important to remember that those resources lay the fundamental groundwork for planned gifts by educating your constituents about estate and financial planning and prompting them to take action. You can and should provide this valuable educational resource to your constituents, and your office should remember its main purpose is to serve as a resource as well.
- Make sure that your messaging is timely. Uncertain economic times are usually ideal for featuring gift annuities and charitable remainder annuity trusts that provide fixed income. Or donors may want to make a revocable gift such as a bequest provision or a beneficiary designation. However, given the current environment, a more timely approach would be to inform donors about the charitable implications of the CARES Act.
- Help donors take the long view regarding life-income gifts, and provide reassurance to your donors about them.
Read the details of these recommendations here.
Biography of Pamela Jones Davidson, J.D.
Pamela Jones Davidson, J.D., is president of Davidson Gift Design in Bloomington, Indiana, a consulting firm specializing in all aspects of gift planning and training. She is also a senior vice president for Thompson & Associates, offering estate-planning services to nonprofits. She was with Indiana University Foundation for 11½ years, leaving as its executive director of planned giving and associate counsel.
Ms. Davidson has a B.A. from Indiana University and graduated magna cum laude from the Indiana University School of Law at Indianapolis in 1979. She has been an examiner in the Estate and Gift Tax Division of the Internal Revenue Service and practiced law in Indianapolis.
Ms. Davidson was the 1999 president of the National Committee on Planned Giving (now the National Association of Charitable Gift Planners, NACGP) and served on its board for six years. She serves on the boards of several charities in her community.
