Prince was a prince to those in need.
Somewhat (more on that later).
He kept it quiet, usually anonymous, his charitable giving to others that is. In humility, he didn’t want his philanthropy to be known! Instead, he preferred to keep the focus on the person or group doing good and in need.
He funded Black Lives Matter, Harlem Children’s Zone, and National Public Radio. He supported Trevon Martin’s family in their time of need. He conceived of #YesWeCode, an initiative to train black kids for work in tech. He gave Love 4 One Another more than $1.5 million from 2005 to 2007 and he supported Green For All, a group working to fight climate change and bring green jobs to underprivileged populations.
The list of his charitable work and the grants he made to nonprofits is long and impressive. I personally was inspired to learn this and want to spread the news.
But (yes, there’s a “but”) his giving had a significant glitch—a potentially devastating, unintentional missed opportunity.
You see, while extraordinarily generous, Prince did not leave a Last Will and Testament, therefore, his legacy philanthropy is precarious at best, left to the discretion of his friends and loved ones AFTER the government’s review.
The fact is that when you die without a will, it means you have died “intestate.” When this happens, the intestacy and inheritance laws of the state where you reside determine how your property is distributed upon your death. This includes your bank accounts, securities, real estate, and any other assets you own at the time of death. The laws of intestate succession vary greatly depending on whether you were single or married, or had children. In most cases, your property is distributed in split shares to your heirs, which could include your surviving spouse, siblings, aunts and uncles, nieces, nephews, and distant relatives. Generally, when no relatives can be found, the entire estate goes to the state.
Prince’s estate is valued at around $150 to $300 million depending on which source you consult, and this excludes the revenue from future sales of his music, plus the vast trove of his unpublished songs.
That Prince did not have a will (and therefore did not leave legacy directives for his philanthropy) is sadly consistent with most of the rest of us, the general population, where fewer than 10% leave a bequest to charity. This low percentage is in direct contrast to the fact that upwards of 70% of us give to charity in our lifetime.
It’s widely known that the vast majority of philanthropic gifts come from individuals, not foundations or businesses, so rightly charities are increasingly focused on cultivating and stewarding relationships with individual supporters. Yet most charities have not yet embraced legacy giving. Why the oversight?
The Excuses We Use
Some say planned giving is too complicated. But the fact is that most legacy-giving revenue is generated by bequests. And asking someone to include your agency in their will is not complex! You can raise more money by encouraging gifts by will and emphasizing the ease of naming your charity as a beneficiary of a checking, savings, or pension account.
We must aim to close the gap between those individuals who give to charity in their lifetime, but not in their estate. Further, there’s a chasm in the lack of charities that proactively market themselves to donors to ask them for a planned gift. Why these huge gaps and what can we do to close them?
Legacy Giving: An Underutilized Opportunity
Why are people generous in supporting nonprofits during life but make no provision for them after death? One stunning reason: most have never been asked to do so!
Though we are in the midst of a significant generational transfer of wealth, nonprofits are not seizing the opportunity to talk with their supporters about the impact legacy giving can have.
Legacy gifts can help you achieve long-term financial sustainability. Studies show that legacy giving offers a powerful means to enhance and diversify a charity’s fundraising efforts.
It’s clear to me after 25 years of fundraising that those who do not ask, do not receive. As a sector, we do not solicit planned gifts sufficiently. “We’re not ready,” is what I hear on a daily basis from those nonprofits with whom I work. “Let’s get ready then,” is my usual retort.
Ready, Set, Go!
What would “getting ready” look like? Here are three steps to take:
1. Find out how many of your donors are age 55+. This is not as easy as it sounds. Your donor base must be organized and your donor prospect-research tools must be in place. I often use surveys to learn donors’ birthdates. All of that must be well organized, and it takes time.
2. Once you know how many donors you have, a decision must be made about how active or passive your planned giving program should be. Active programs are more expensive than passive ones because they require meeting donors in person, and to do that you will need a trained fundraiser (staff or consultant) on your team. Passive programs consist of a lighter touch: a notice in your newsletter and the local bulletins, and the occasional marketing of a planned giving brochure perhaps. A general rule of thumb is that having 500 donors over age 55 justifies the expense of having a more active planned giving program.
3. At the very least, write those donors a planned giving request letter twice a year. In your letter ask them to consider your nonprofit in their estate planning. I usually send my letters out in May and October. You can find many sample letters and templates online. Feel free to email me for one.
So what’s stopping you from embracing planned giving? Once you realize its true potential, you’ll be partying like it’s 1999.