A new study released by BNY Mellon Wealth Management’s Planned Giving Practice reveals that, despite concerns the 2017 Tax Cuts and Jobs Act would have a negative impact on the future of giving, philanthropists increased their support of the non-profit sector during 2019.
Non-profit organizations represented in BNY Mellon Wealth Management’s 2020 Annual Charitable Gift Report saw an increase in planned gifts in 2019, with charitable gift annuities performing particularly well.
The number of charitable gift annuities rose 21% over the prior year and the average gift amount was up by 56%, suggesting non-profits should consider an increased focus on marketing gift annuities.
“Charitable gift annuities have remained a consistently popular way to give. For many non-profits, it is a great way to create lifetime engagement with donors at all levels of support and can open the door for deeper conversations about other ways to make an impact with their giving,” says Crystal Thompkins, National Director of Gift Planning Services at BNY Mellon Wealth Management.
The study revealed that three quarters (74%) of donors made gifts to organizations that were outside of the state of their primary location (up from 66% in 2018), highlighting the importance of maintaining visibility and registering to issue gift annuities in states where gifting is the most prevalent.Of further note, over half of gifts (58%) came from repeat donors, which underscores that maintaining stewardship efforts is also critical, particularly given the increased competition for philanthropic dollars.
COVID-19 raises family estate planning and values awareness
The study also assessed the impact of the global pandemic on planned giving. While just over half (51%) of non-profits surveyed indicated that COVID-19 had negatively impacted their planned giving efforts, many have turned the challenges of social distancing and remote work into opportunities to strengthen donor relationships and mission-focused messaging.
Key shifts that non-profit organizations are making in response to COVID-19 include changing the tone of marketing messages and focusing on specific giving strategies. COVID-19 has also negatively impacted the level of donor-initiated contact, with 40% of organizations indicating a decrease. Primary reasons for donor-initiated contact include notifications of bequests and changes to estate plans or personal conversations.
BNY Mellon Wealth Management’s Planned Giving Practice recommends considering the following operational initiatives for non-profits:
- Effective digital communications and social media strategy paired with personal, safely distanced outreach and connection
- Deep expertise in how all legislative changes create opportunities for donors to serve their families and their values well
- Leadership development, taking advantage of how COVID-19 has shifted many professionals’ focus to find more fulfilling work
The results of the study were highlighted at BNY Mellon Wealth Management’s Planned Giving Conference, which took place virtually from September 16 through 18, 2020. The event is in its 16th year and included an audience of nearly 250 charitable gift planning professionals, individuals on boards of non-profit organizations and advisors working with non-profit organizations.
Hosted by Crystal Thompkins, National Director of Gift Planning Services, the theme of the event focused on “elevating planned giving,” and featured live keynote presentations, panel discussions and insights from industry experts on the current landscape and the future of planned giving. Topics included new and meaningful ways for non-profits to connect with supporters, implications for charitable planning under the SECURE and CARE Acts, key fiduciary duties for non-profit trustees and managing the pressures on planned giving due to the global pandemic.
Thompkins reflected on the event and commented, “There is an increased focus on legacy and intergenerational giving through estate plans. The increased deduction for cash gifts in 2020 and the impact of low interest rates are also leading many non-profits to focus on split-interest life income gifts that provide current benefits to donors who want to both make an impact and be assured of financial security. Despite these incentives, however, non-profits are concerned about the impact of the economy and election on support for their organizations.”
A replay of the conference is available at BNY Mellon Wealth Management’s BrightTALK channel or the Planned Giving Conference website.
About the 2020 Annual Charitable Gift Report
BNY Mellon Wealth Management Planned Giving’s 2020 Annual Charitable Gift Report assesses the planned giving landscape, levels of giving and donor behavior to provide insights, context and benchmarks. The report provides analytics and observations on charitable gift annuity and charitable remainder trust activity for over 100 non-profit organizations, as well as insights gained from BNY Mellon’s Planned Giving clients on gift acceptance policies and donor behavior. A client survey exploring the impact of COVID-19 on gift planning took place in April 2020 and included feedback from 35 non-profit organizations including education, faith-based, social services/other, cultural and healthcare organizations.
About BNY Mellon Wealth Management
For more than two centuries, BNY Mellon Wealth Management has provided services to financially successful individuals and families, their family offices and business enterprises, planned giving programs, and endowments and foundations. It has $254 billion in total client assets, as of June 30, 2020, and an extensive network of offices in the U.S. and internationally. BNY Mellon Wealth Management, which delivers leading wealth advice across investments, banking, custody and wealth and estate planning, conducts business through various operating subsidiaries of The Bank of New York Mellon Corporation. For more information, go to bnymellonwealth.com or follow us on Twitter @BNYMellonWealth.
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