October 2004
Why Do U.S. Donors Leave Bequests? (Part 1) by Adrian Sargeant and Elaine Jay
Eliminate the clutter by Susie Fought
What's up online by Dan Weeks
A Special Report
"Bequest giving," write Adrian Sargeant and Elaine Jay, "has historically been an important income source for American nonprofits, representing 9% of all contributions from individuals in 2003. Since 1971, bequest giving has increased steadily at an average of 6.8% annually. In 2003, bequest giving reached an estimated $21.6 billion.
"Despite the significance of bequest income for the sector, we presently understand very little about why individuals might choose to leave bequests, how they select the organizations they wish to support, and what triggers their decisions to include charity beneficiaries in their wills.
"Nonprofits remain unsure whether bequest marketing activities actually trigger pledges — and, of these, how many individuals actually make changes to their wills. Charities also remain unclear on the best form of approach, whether to segment their donor files in some way, and which marketing channels to use."
The principal author of this Special Report on these issues, Adrian Sargeant, is Professor of Nonprofit Marketing at Bristol Business School, University of the West of England. This report is adapted from a research paper sponsored jointly by the Association of Fundraising Professionals (AFP) and Mal Warwick & Associates, Inc.
–M.W.
Why Do U.S. Donors Leave Bequests? (Part 1)
By Adrian Sargeant and Elaine Jay
LEGACY PLEDGERS were significantly more likely to be female than supporters (who hadn't yet made legacy pledges). Sixty-eight percent of legacy pledgers were female, compared with only 43.5% of supporters. (There was a slight bias in favor of female respondents overall, 55.4% vs. 44.6%, but this merely reflects the gender balance on many charity donor databases and thus the population surveyed.)
Other significant differences emerged in the demographic data.
(See Table 1.)
Table 1: Profile of Respondents
Variable Supporter Mean Pledger Mean
Age 65.7 68.7*
Level of education Degree Degree
Number of children 2.21 1.29**
Number of grandchildren 2.85 1.52**
Mean amount donated to nonprofits each year $6,961 $4,865*
Importance of religion in your life Important No Opinion**
* = Significant at the 0.05 level of significance
**= Significant at the 0.01 level of significance
A typical supporter is aged 66 and educated to degree level. She or he has two children and three grandchildren and donates in excess of $6,900 to nonprofits each year. (However, the median, or middle, gift was just $3,500 per annum, since a small number of big gifts distorted the average.)
By contrast, the typical legacy pledger was on average three years older than the average supporter. Pledgers are typically college graduates and donate roughly $5,000 to nonprofits each year. (Again, the median figure is lower — $2,500 in this case.) They have smaller numbers of children and grandchildren.
There were also meaningful differences in attitudes about charitable giving. We asked respondents to indicate the extent to which they agreed or disagreed with a series of attitudinal statements, where 1 = strongly disagree and 5 = strongly agree. The first group of statements was designed to measure altruism, empathy, and negative state relief, as reflected in Table 2.
Table 2: Attitude of Respondents to Giving
Statement Supporter Mean Pledger Mean
I often give to nonprofits because I would feel guilty if I didn't 2.16 2.18
If I never gave to nonprofits I would feel bad about myself 2.91 3.10*
I feel it is my duty to make the world a better place 4.01 4.13
It is right to use any resource you have to advance society 3.41 3.47
It is important to give money to nonprofits to help others 4.09 4.20
When I give I expect nothing in return 4.49 4.28**
People in need should receive support from others 4.12 4.03
I feel I understand the needs of others 3.37 3.39
I find it easy to imagine how others might be feeling 3.29 3.45**
I can empathize with those in need 3.76 3.86
* = Significant at the 0.05 level of significance
**= Significant at the 0.01 level of significance
The differences emerging between pledgers and supporters were as follows:
Pledgers were significantly more likely to agree that if they never gave to nonprofits, they would feel bad about themselves;
They were significantly less likely to agree that they expected nothing in return for their giving; and
They were more likely to agree that they found it easy to imagine how others might be feeling.
Respondents were then asked to indicate how they selected particular nonprofits for support. The results of this analysis are supplied in Table 3.
Table 3: How Organizations Are Selected For Support
Statement Supporter Mean Pledger Mean
I compare between organizations to find the one most likely to have an impact on the cause 3.68 3.94**
I only support the best performing nonprofits 3.33 3.45
I look for nonprofits that spend a high proportion of their income on the cause 4.36 4.49*
I give to organizations that have been helpful to me or to someone I know 3.06 2.67**
When I support a nonprofit I look to receive some form of benefit in return for my gift 1.64 1.82**
When I support nonprofits the recognition they offer is important to me 1.76 1.92*
I only support nonprofits that are managed professionally 3.14 3.21
I support nonprofits that have assisted me in the past 2.14 1.79**
I give to nonprofits that have good professional reputations 4.04 4.21**
I support nonprofits that approach me in a professional manner. 3.66 3.82*
* = Significant at the 0.05 level of significance
**= Significant at the 0.01 level of significance
Both supporters and pledgers placed a high degree of importance on performance and professional reputation. They tended to look for organizations that spend a high proportion of their income on the cause.
The significant differences between the two groups here were:
Pledgers were significantly more likely to agree that they compared organizations to find the one most likely to have an impact on the cause when selecting a nonprofit for support;
They were more likely to agree that they looked for nonprofits that spend a high proportion of their income on the cause; and
Pledgers were significantly less likely to look for organizations that had helped them or someone they know.
Neither group thought that benefits and recognition were important factors in their choices of a nonprofit, with pledgers feeling more strongly than supporters on this issue. Both groups felt that professionalism was important in the nonprofits they supported, with pledgers feeling significantly more strongly than supporters.
We next asked respondents which aspects of a relationship with the nonprofits they support were most important to them. The results of this analysis are reported in Table 4.
Table 4: Importance of Components of Relationship
Statement Supporter Mean Pledger Mean
I expect to be kept informed about how my money is being used 3.73 3.97**
I expect any nonprofit I support to respond promptly to requests I might make for information 3.58 3.85**
I expect nonprofits I support to respond to my needs and preferences as a donor 2.52 2.78**
I expect my gifts to be appropriately acknowledged 3.35 3.65**
I expect nonprofit employees to be courteous in their dealings with supporters
4.25 4.46**
I expect some choice over the communications I receive 3.51 3.71**
It is important that nonprofit communications are timely 3.61 3.79**
It is important that nonprofit communications are courteous 4.17 4.37**
**= Significant at the 0.01 level of significance
The most important aspect for both groups would appear to be courtesy in communications. Both groups are also keen to receive feedback on how their money is being used. While the differences in mean scores between the two groups are not large, pledgers are significantly more demanding than supporters in every area. These findings suggest that pledgers should be developed with an especially differentiated standard of care, as they appear to be more demanding in respect of the quality of service received. Indeed, this is an intuitive finding, given the significance of the gifts they have planned to leave to the nonprofit.
To summarize the attitudinal data, we calculated a mean score for altruism, empathy, performance, etc., for each respondent. We then compared the scores obtained for pledgers and supporters. The results of this analysis are reported in Table 5.
Table 5: Construct Scores
Construct Supporter Pledger
Negative State Relief 2.54 2.62
Altruism 4.01 4.01
Empathy 3.46 3.56*
Performance 3.78 3.96**
Reciprocation
2.14 2.06
Professionalism 3.61 3.75**
Responsiveness 3.30 3.57**
Communication 3.89 4.09**
* = Significant at the 0.05 level of significance
**= Significant at the 0.01 level of significance
As Table 5 shows, pledgers are significantly more concerned than supporters about responsiveness, professionalism, performance, and communication. This simply reinforces the earlier observation that they're significantly more demanding of the organizations they support than typical donors.
Legacy solicitation
We then gathered data about whether each respondent had made a will and elected to leave a gift to a nonprofit in that will. The results of this analysis are reported in Table 6.
Table 6: Percentage of Individuals
Making a Will / Leaving a Gift
Action Supporter (%) Pledger (%)
Made a will 85.3 96.6**
Left a gift to a nonprofit 35.9 90.2
**= Significant at the 0.01 level of significance
As you can see, a very high proportion of supporters have created wills, but fewer than 40% of these individuals have elected to offer gifts to nonprofits. While almost all legacy pledgers claim to have made wills, not all of these appear to have left gifts to nonprofits despite having pledged to do so.
Eighty-eight and 7/10ths percent of supporters indicated they believe it's appropriate for nonprofits to ask for legacy gifts. The figure for legacy pledgers was even higher (91.9%).
The survey also asked supporters whether, if they were to offer legacy gifts to nonprofits, they would notify the organizations that they had done so. Only 67% of supporters overall said they would notify the nonprofits of their intentions.
Both groups were asked to name the nonprofits they were currently planning to support with legacy gifts. In every case, a wide range of organizations was named, suggesting that the nonprofits in our study compete with causes in both similar and different fields for bequest income. In many cases, local causes were named alongside large national charities.
The sample was evenly split on the notion of whether it was appropriate for them to be offered recognition in return for legacy pledges. Fifty-two and 6/10ths percent of supporters felt this was appropriate and 57.7% of pledgers (a significant difference in opinion between these two groups). When asked to tell us what form of recognition would be most appropriate, they typically responded that a simple letter of thanks would be sufficient.
Respondents were then asked which channels of communication they felt most appropriate in promoting legacy giving. The results of this analysis are reported in Table 7.
Table 7: Communication Preference
Media Supporter Pledger
Mail 4.04 4.13
Telephone 1.71 1.61
E-mail 2.33 2.29
Web site 3.13 3.47**
Personal visit 2.34 2.41
Presentation to a group of supporters 3.50 3.80**
Newspaper/press advertising 3.03 3.34**
Advertisement in organization's literature 3.95 4.28**
TV advertising 2.63 2.91**
Promotion via lawyers 2.05 1.97
Promotion via accountants or other financial advisors 2.21 2.19
* = Significant at the 0.05 level of significance
**= Significant at the 0.01 level of significance
Mailed communications, advertisements in the organization's literature, and presentations to supporters scored most highly as appropriate routes for the promotion of legacy giving. Pledgers were significantly more likely to favor a number of routes, perhaps because they have personal experience of these solicitation processes.
The following comments are examples of the feedback we received when we asked respondents to suggest ways in which the promotion of legacy giving could be improved:
"Make it clearer that smaller amounts are useful, too."
"Make it one communication each couple of years."
"Be specific as to the goals of the bequest. What gains are expected? How will the community gain?"
"I think the nonprofit community can together inform people about bequest giving in general — and then solicit commitments from their own donors. I don't want an attorney or financial advisor suggesting which nonprofit I should bequest to."
"It must be continuous — done in all the ways you have listed."
"By publishing actual cases of how they have helped."
"When you check that you have already made a bequest — don't keep sending promotions for it."
"Explain what the organization does with its gifts."
"Storytelling — reflecting future work, past work, spiritual legacy of work well done."
"I think about changing my plans whenever I get appeals every month. Just too much is sent to those who already give support."
"Make a named person available — it is hard to know who you should contact about a bequest."
ABOUT THIS REPORT:
Methodology
We recruited five U.S. non-profits currently soliciting legacy gifts. Working with them, we designed a quantitative research study to:
a) Identify the factors that prompt an individual to offer a bequest
b) Identify the environmental triggers that might prompt an individual to offer a bequest (e.g. prompting by a professional, prompting by a charity, loss of a loved one, etc.)
c) Identify the best prospects for legacy/bequest "Asks"
d) Identify how various categories of bequest Ask communications are perceived by donors
e) Identify the relationship between stated intentions to pledge and actual bequests made.
We compared the attitudes of those who had been motivated in the past to pledge legacy gifts ("pledgers") with those who had been asked but so far hadn't made such commitments ("supporters"). Each partner to the research was therefore asked to supply a sample of each. The non-profits themselves decided which supporters to select to receive legacy communications.
We mailed an appropriately tailored postal survey to each sample. The overall response rate among legacy pledgers was 26.4 %; among supporters, 25.2 %. These results are based on the responses of 1,290 individuals in total.
–A.S. & E.J.
Who
The income profile of the respondents is depicted in the table below. No clear pattern emerges from the data, and we found no significant differences between pledgers and supporters.
Income Category (%)
Up to $20,000 5.9
$20,000 – $39,999 15.3
$40,000 – $59,999 22.9
$60,000 – $79,999 18.2
$80,000 – $99,999 11.2
$100,000 and over 26.5
The majority of supporters surveyed were married. As one might expect, legacy pledgers were found to be significantly more likely to be widowed than supporters.
Marital Status (%)
Single 15.3
Married 59.5
Separated 4.5
Divorced 3.2
Living with partner 2.9
Widowed 14.6
–A.S. & E.J.
What
Sargeant and Jay asked respondents to indicate whether they would consider leaving pecuniary, residuary, or contingent gifts in their wills. Supporters were asked to speculate on this question. The difference is significant:
A pecuniary gift consists of a fixed amount, or a percentage of the total amount of the estate, stipulated in a will.
A residuary gift is one that's made after other obligations — spelled out in the will or estate plan — are satisfied.
A contingent gift requires that one or more other beneficiaries named in the will or estate plan must first pass away before the gift may be given.
Residuary gifts are typically far larger than the other types. Pecuniary gifts are most appealing to supporters — but individuals who had actually included nonprofits in their wills were significantly more likely to have stipulated residuary gifts.
–M.W.
Category of Gift Supporter (%) Pledger (%)
Pecuniary 57.97 28.07
Residuary 29.71 60.52
Contingent 12.31 11.41
Adrian Sargeant is Professor of Nonprofit Marketing, Bristol Business School, University of the West of England, and Adjunct Professor of Philanthropy, Center on Philanthropy, Indiana University. He may be reached at adrian.sargeant1@btinternet.com. Part 2 of this Special Report will appear in our November issue.
Eliminate the clutter
By Susie Fought
NORA CODY, Director of Development at DES Action (Oakland CA), faces a unique challenge. DES (diethylstilbestrol) is a synthetic estrogen drug given to millions of pregnant women, primarily from 1938-1971. Use of DES during pregnancy was thought to prevent miscarriages. However, women who took DES and the children they carried are at risk for certain health problems. DES Action provides information and support to DES-exposed people and educates health professionals.
Here's the group's dilemma: As a national, single-issue consumer advocacy organization, almost all contributing members and donors are (or were at some point) "clients." Unfortunately, very few DES mothers, daughters, and sons convert to contributing members. So what can Cody do to increase this conversion rate?
Currently, when a person contacts DES Action for information, Cody sends out a large packet of materials, including a recent newsletter, two brochures, a very extensive publication order form, a reply device, a letter, and, if requested, a list of DES-knowledgeable doctors, as well as instructions for checking medical records. Each piece in the package looks as if it comes from a different organization. There are several different fonts, styles, colors, and logos used.
The letter urges the recipient to join DES Action with a gift of $40 or more. The reply device offers eight different membership levels, ranging from $35 Member to $1,000 Benefactor. The newsletter, publications order form, and the DES Action brochure each includes a pitch to join, with different variations of the member level offers.
Six ways to increase membership
My recommendations included the following changes to DES Action's member acquisition (client conversion) strategy:
1. Separate the client services from the membership pitch. When we receive a package in the mail — whether from a nonprofit, credit card company, or cable TV provider — there are three questions we absolutely want answered: Who is it from? What do they want me to do? What do I get in return? The current DES Action information/membership package is confusing and creates more questions than answers: Are all of these different pieces from one organization? Why are they asking me to join when I simply asked for information? There are so many choices . . . membership levels, publications, back issues of newsletters. Where do I begin?
2. Design one logo and overall "look" and stick with it. Consistency in the look of an organization's materials can be just as effective as its message.
3. In the membership appeal, simplify the offer and save the named giving levels for a high-dollar giving club appeal. Joining DES Action should be as easy as possible.
4. Redesign the DES Action brochure and remove the pitch to join.
5. Eliminate the publications order/member-ship reply form. The Web site is a user-friendly venue for purchasing publications and back issues of newsletters. Remember, the membership offer will be far more effective within a specific membership appeal. (See #6.)
6. Design a three-effort membership appeal. Mail to recent inquiries three to six weeks after the initial information packet. Keep past inquiries on file. Follow up with two "reminders" (three, then two weeks later). Preprint the forms for use year-round and personalize the letters and "offers" for each mailing, adjusting the message to fit each recipient.
What's up online
By Dan Weeks
Senator Paul Wellstone was described by Pulitzer Prize-winning columnist and author Anna Quindlen as one of only two politicians she knew who were "purely ethical."
Oct. 25 is the 2-year anniversary of the plane crash that took the lives of Senator Wellstone, his wife Sheila, their daughter Marcia, three political aides and the plane's two pilots. We honor Senator Wellstone's memory by featuring Wellstone Action! — formed last year by Mark and David Wellstone to carry on their parents' legacy — as our featured client of the month in our e-newsletter, and by showcasing their Web site in What's Up Online.
Visit www.wellstone.org and learn about the three main thrusts of this new nonprofit:
Camp Wellstone, which trains community activists from all over the country in effective grassroots political and electoral campaigns;
The Sheila Wellstone Institute, which works to focus public attention on violence against women and children; and
The Wellstone Action Network, which uses the Web, email action alerts, grassroots organizing and partnerships with like-minded organizations to win one campaign at a time. Their current campaign is to pass the Paul Wellstone Mental Health Equitable Treatment Act, which would end discrimination by the insurance industry against people suffering from mental illness. This was an issue of great importance for Senator Wellstone.
Want more? Sign up to receiveSuccessful Fundraising Online every month via e-mail.
