The Pentera Blog
Does Making a Planned Gift Hurt Annual Fund Gifts? No. And There's New Research to Help Prove It
By Claudine A. Donikian
President & CEO, Pentera, Inc.
New research shows that making a planned gift does not cannibalize annual giving. Two recent studies add to a growing body of evidence that annual giving actually increases after donors make an estate gift. Gift planners will want to cite these studies when discussing their budgets with supervisors and CFOs—especially during these uncertain times.
Giving USA's study
A report from Giving USA™, Leaving a Legacy: A New Look at Today's Planned Giving Donors, presented national survey data from a pool of more than 8,500 planned giving donors and prospects. It found that 45% of those surveyed said they increased their annual giving to the organization after establishing a legacy gift, while 47% kept their annual donation the same.
The study added that it is important to recognize donors' planned gifts when soliciting annual or campaign support:
“Interviewees spoke highly of annual-level solicitations that asked how they would like to help or be involved in the organization (rather than simply for a donation) and said this approach made them "feel useful.' However, they spoke negatively of solicitations ... that did not acknowledge their existing legacy commitment."
Russell James's new study
An analysis by planned giving researcher Russell James, “The Emerging Potential of Longitudinal Empirical Research in Estate Planning: Examples from Charitable Bequests," was just published in the June 2020 edition of the UC-Davis Law Review. It is based on data from the Health and Retirement Study, a massive government research project conducted by the University of Michigan that has been interviewing thousands of Americans every two years since 1992.
James found that annual gifts go up 77% after an estate gift. The average annual gift in the eight years after making an estate gift was $7,699 when adjusted for inflation, while the average annual gift was $4,355 in the eight years before the estate gift.
The study clearly shows that giving increases significantly following the planned gift—negating the cannibalization argument.
