The Legacy Conversation

Ways to receive immediate gifts, after-lifetime gifts, and income-producing gifts
How to have the legacy conversation
Donors’ potential motivations for giving
How to overcome objections and misconceptions
How to formalize a gift

Legacy Giving Options

This section describes different ways in which donors can make a legacy gift. Please note that this is not a complete list of legacy giving vehicles. We recommend consulting with your financial advisor or attorney to determine the best options for your institution.

Immediate Gifts

Cash

How to give:

Write a check or make a credit card payment.

Donor benefits:

Immediate tax deduction for full value of gift; removes taxable assets from the donor’s estate; delivers immediate benefits to the charity and leaves a lasting legacy.

Appreciated, Marketable Securities

How to give:

Donor benefits:

Life Insurance Policy Donation

How to give:

A donor can donate a new policy or transfer an existing policy during their lifetime and name the charity as the policy’s irrevocable owner and beneficiary.
Proceeds will fund the donor’s legacy gift to the charity after their lifetime.

Donor benefits:

May provide an income tax deduction for the value of the policy and any future gifts made to the nonprofit to maintain the policy; leaves a lasting legacy.

IRA Charitable Rollover

How to give:

Donors 70 1/2 years or older can make an IRA charitable rollover (up to $100,000 per year) to a qualified nonprofit.
Contact a plan administrator to make a gift from your IRA to the nonprofit; the IRA funds must be directly transferred to the nonprofit by December 31.
Charitable rollover amounts could count toward the donor’s required minimum distribution, though there is no charitable deduction.
Donors are not permitted to make charitable rollovers to donor advised funds, supporting organizations, nonprofits, and private foundations.

Donor benefits:

Reduces taxes on up to $100,000 from the donor’s IRA to the nonprofit; satisfies their required minimum distribution for the year; leaves a lasting legacy.

Which options are you interested in discussing with your donors?

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After-Lifetime Gifts

Gift in a Will or Trust

How to give:

Donors can make a bequest gift of specific property, a specific dollar amount, or a percentage of their estate and/or designated asset.
Their estate will receive a charitable tax deduction for the amount of the gift, which may reduce their taxable estate.
If the donor already has a will, an attorney can write a codicil to include the bequest.

Donor benefits:

Simple to create; estate receives a charitable tax deduction for the bequest; retain control of assets during their lifetime; leaves a lasting legacy.

Naming Nonprofit as a Life Insurance Beneficiary

How to give:

Name one or more nonprofits as a beneficiary.
Specify a percentage or the entire insurance policy.

Donor benefits:

Easy to set up (donors can ask for a “Change in Beneficiary” form from their plan administrator); retain control of the policy; may receive a charitable tax deduction after their lifetime; make a large gift at little cost; leaves a lasting legacy.

401(k) or IRA Retirement Plan Designation

How to give:

Upon death, retirement plans are subject to both estate and income taxes, which means up to 60% of retirement assets may go to the IRS; distributions to nonprofits incur no taxes.
Name one or more nonprofits as a beneficiary.
Specify percentage or the entire account.

Donor benefits:

Tax-wise option: Gifts of IRAs and other retirement accounts allow donors to make a gift to the nonprofit while saving on estate and income taxes; leaves a lasting legacy.

Which forms of after-lifetime giving listed above did you already know about? Which forms of after-lifetime giving are new to you?

Income-Producing Gifts

Charitable Gift Annuity

How to give:

Provides one or two individuals (55 years and older) with fixed payments for life.
Establish a simple contract between the donor and nonprofit. The donor can transfer assets of cash or marketable securities to the nonprofit; and in exchange, the nonprofit promises to pay one or two people for life.
Payment rate depends upon the age of the beneficiary or beneficiaries at the time of the transfer; the older the beneficiary at time of gift, the greater the fixed payments.
Donor may be subject to income tax on the income stream.
When the last beneficiary dies, the annuity’s balance becomes the donor’s legacy gift to the nonprofit.
A deferred gift annuity works the same way, but starts providing payments at a fixed date in the future (rather than immediately). Until payouts begin, the annuity may grow in value, providing a higher payment rate.

Donor benefits:

Guaranteed annual payments for life regardless of market conditions; a portion of the income may be tax-free; removes taxable assets from estate; partial bypass of capital gains with gifts of appreciated property; income tax deduction in the year the gift is made; leaves a lasting legacy.

Charitable Remainder Trust

How to give:

Transfer assets (e.g., publicly traded securities, real estate, cash) to a trust that pays either a fixed amount (annuity trust) or fixed percentage that reflects the size of the trust (unitrust) to the donor and/or their designated beneficiaries.
Enables donors to make an irrevocable gift that produces payments for life, a set term for themselves and/or their beneficiaries with the remainder of the donated assets going to their favorite nonprofit.
At the end of the term or upon the beneficiary's death, the trust terminates and the assets in it pass to the nonprofit as a legacy.

Donor benefits:

Charitable income tax deduction for a portion of the gift; a payment stream; removal of assets from the donor’s estate, which may reduce estate taxes; leaves a lasting legacy.

Which forms of income-producing gifts listed above did you already know about? Which forms of income-producing giving are new to you?

Having the Legacy Conversation

The legacy conversation allows you to discuss the importance of giving with your donors. This is an opportunity to help them find a motivation for giving as well as encourage them to sign a declaration of intent.

Motivations for Giving

Why do you think some people choose to give?

It’s important to discuss with your donors why they are giving. If they’re unsure of why they would give, here are some common reasons you can suggest.

A commitment to being Jewish

To live up to the values instilled by your parents and grandparents

To give back

To make a difference

To be part of something greater than ourselves

To be recognized

To feel connected to others with similar values

To honor loved ones

To support an organization because they value what the organization does for the community

Drag and drop the lines below to rank the reasons for giving that you feel are most important to your donors:

To live up to the values instilled by their parents and grandparents

To give back

To make a difference

To be part of something greater than ourselves

To be recognized

To feel connected to others with similar values

To honor loved ones

To support an organization because they value what the organization does for the community

A commitment to being Jewish

When asked about their reasons for giving, Jewish legacy givers cited their top two reasons as "A commitment to being Jewish" and "To live up to the values instilled by parents and grandparents.”

5 Pre-Conversation Steps
To Take

Here are the key steps to take during each stage of the process to increase the chances of a successful conversation.

Identify your prospects.

Decide who should make the call and be part of the meeting.

Figure out who should cultivate the relationship (staff and/or lay person).

Set up the appointment:

Call and introduce yourself (hopefully you already have a relationship with the prospective donor).
Explain that you would like to meet to thank them for their commitment to your organization and to share organizational updates.
Set up a time and place to meet – wherever and whenever is best for them.
Find out if anyone else should be part of the meeting (e.g., spouse, partner, family member).
Let them know if someone else from your team will be joining, too.

Research donors before meeting with them:

Learn about their personal and familial connections to your organization (e.g., past or present leadership roles).
Perform an internet search on them using Google, LinkedIn, Facebook, and other social media platforms.
Explore their other interests (e.g., community and philanthropic involvements).

Sample Appointment Language

“[Donor Name]: I’m calling because you have been a critical part of our work. You’ve been a donor for more than [X] years and [e.g., you’ve served on our board]. You understand our value to the community and the impact we have on [organization focus; e.g., Jewish life, serving the needy]. May I come speak with you and get your input? We are working on increasing our annual support and planning for our future. I believe this is an initiative you will want to be a part of.”

How would you start a call with a potential legacy donor?

Having the Conversation

It’s important to prepare for each and every conversation you’re having with a donor. To ensure that the conversation feels natural for both sides, here are some guidelines to keep in mind.

1. Take time to schmooze before moving into a donor-centric legacy conversation.

2. During the conversation:

Offer the donor an opportunity to do something significant during the donor’s lifetime. The conversation is NOT meant to focus on the donor’s death.
Be donor-centric: Your role is to listen to the donor’s story and use that information to encourage a legacy commitment.
Use the conversation to gather information and hear the donor’s story:
- What is going on in their life?
- Are they retiring?
- Are they selling a business?
- Are their children graduating from college?

Discuss their relationship with the organization and stay away from "why" questions. Instead, ask:
- What inspired you to make your first gift to (organization)?
- What has kept you engaged and loyal to our organization for the last number of years?
- What are your favorite things about the organization?
- What are your hopes and dreams for the organization’s future?

Connect donor philanthropic interests with your organization’s work and mission:
- Provide information on the number of people served, the impact your organization has had on the Jewish community, etc. Discuss current initiatives that may interest them.
- Invite them to visit your facilities or attend a non-fundraising initiative.

Be an active listener:
- Canned scripts don’t work; take cues from the donor.
- Look for ways to acknowledge, affirm, and agree with what they are saying.
- Avoid saying “no” or “but.”
- Don’t interrupt.
- Take their lead to move the conversation forward.
- Let them choose the conversation topics.
- If the donor presents you with an unanticipated situation, such as issues with the organization or financial troubles, don’t get upset; work with the information provided and be understanding.

3. Invite the prospective donor to join you in leaving a legacy.

Wait until the time is right.
Focus on their connection to the organization rather than the needs of the organization.
Only ask them about a legacy commitment when the donor seems ready to hear it.
Share your case statement, if appropriate.
- Share with them your reasons for making a legacy commitment.
- Advise them on the impact a legacy gift has on your organization and the Jewish community (focus on the donor’s areas of interests).
- Discuss the organization’s vision for the future.

Invite them to partner with you:
- Will you join me in making a legacy commitment? (Give them time to think and a moment of silence to respond.)
- Listen to their response and move the conversation forward based on what you hear.

4. Respond to the donor’s reaction.

Yes: Say thank you and review the declaration of intent The profit from an investment that is taxed when the investment is sold. with them.
Maybe: Ask them if they have any additional questions or need additional information to help them make a decision.

Need more time: Set up another time to meet with them for a follow-up conversation.
No: Ask them to share their reasoning and, if they are willing to do so and depending on their reasoning, ask if you can follow up with them in six months or next year.

Watch below to see it all come together in this legacy conversation.

No matter their response: Thank them for their time and support.

Overcoming Objections and Misconceptions

During your conversations, you may come across donors who hesitate to give or have preconceived ideas about what giving entails. Try to memorize some of these answers in case these topics come up, so you have responses to help them feel at ease and allow them to understand the importance of their contribution.

Misconception: Only wealthy donors are prospective donors for legacy gifts.

Reality: Often, it is the most loyal donors, rather than the wealthiest, who are the best prospects. Legacy giving enables donors of all levels of wealth to be philanthropists.

Objection: I want to make sure that my family is taken care of when I am gone.

Reality: By contributing to a strong Jewish community, you are providing for your family, whether they live in your area or another community.

Misconception: I am too young to be thinking about a legacy commitment.

Reality: A person of any age can be a prospect for a legacy gift. A 2013 study found that 40- to 49-year-olds make the greatest number of bequests to Jewish causes if they have a will.

Objection: I do not have a will; I do not want to change my will; it is too expensive to change
my will.

Reality: There are a variety of ways to make a legacy gift that do not require changing your will. For example, you can designate an organization to be the beneficiary of your life insurance policy or your retirement plan.

Objection: I am already paying a lot of day school tuition; I have children in college who I am supporting.

Reality: A legacy gift comes from after-lifetime assets, not current cash. Even a small percentage can make a large and lasting impact on an organization and the community.

What are some objections or misconceptions that you anticipate receiving from your donors?

How might you respond to keep the conversation moving forward?

What is the #1 reason people DON’T leave a legacy?

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Post-conversation

Once the conversation is over, be sure to stay connected with your donor. Here are a few ways to maintain strong ties with them.

If the answer to a legacy gift is “yes”:

Show your appreciation:

Send them a handwritten personal note immediately.
Call them about a week after sending your note.
If you have a public listing of legacy donors, the donor’s name should be immediately added to the list (unless they want to remain anonymous); ask permission to list their name as a member of your society or to announce their name at community events.

Keep them connected:

Send out a personal note updating them on services and initiatives.
Invite them to appropriate events.
Share volunteer opportunities with them.
Invite them to serve on a committee to increase their involvement.

Steward the donor forever.

If the answer to a legacy gift is “not right now,” “maybe,” or “no”:

Follow up on your conversation with a thank you card.
If you’re scheduled to meet again, remind them in your thank you note.

Internal reporting:

Write down what you learned from the meeting so you and the legacy committee can continue to cultivate the relationship with the donor or steward them if they did make a gift.
Report the results to your legacy committee.

Please note: We will discuss stewardship in more depth during the Sustaining Your Legacy Initiative lesson.

Formalizing Commitments

After securing a declaration of intent, the next step is to move your donors from intent to a formalized commitment. This involves making the necessary revisions to their estate plan (e.g., will, trust, life insurance, retirement beneficiary forms) so that when they pass, their nonprofit wishes will be honored.

Why should legacy donors formalize their legacy commitment?

To ensure their desire to support your organization is fulfilled.

5 Steps To Formalize a Gift

1. Look at the declaration of intent and see if the donor included a date by which they intend to formalize their gift.

Contact your donors shortly after the date has passed to ask them if they have formalized their commitment, and if not, encourage them to do so. For example, if they wrote three months on the declaration of intent form, then contacting them at three and a half months is appropriate. Don’t contact them earlier than that.

Here’s an example of a declaration of intent form:

2. It’s best to make contact by phone or in person, unless email is what the donor prefers.

It is okay to be direct about why you are reaching out. In most cases, donors realize that they need to take an additional step to follow through on their commitment.

Sample Language

“[Donor Name]: Thank you for your legacy commitment to [name of
organization]. In accordance with best practices, we’re calling all of our donors to find out if they have formalized their legacy gift either in their will, trust, or by making a change to a life insurance or retirement beneficiary form. Your declaration of intent stated you intended to formalize your commitment within [X] months. I am following up to see if you have taken this next step and to offer assistance if you have not.”

How would you begin the formalization conversation with your donors? What would you say to encourage them to legally put their legacy commitment in place if they haven’t done so already?

3. If the donor has legally put their gift in place, let them know that you will be forwarding a legacy gift confirmation form.

Ask them to fill out the form at their earliest convenience and return it to you for your organization’s records. The donor can also send you the relevant portion of their will or the beneficiary designation form if it is a life insurance or retirement gift. Make sure to end the call by thanking the donor for their commitment to your organization.

Here’s an example of a legacy giving confirmation form:

4. If the donor hasn’t taken the steps necessary to formalize their commitment, ask if you can help by putting them in touch with someone at the Jewish Federation or another professional advisor.

If they say “no” and need more time:

Let them know that you will be sending them a legacy gift confirmation form to fill out and return to you once the formalization process has been completed.
Ask them if you can contact them again in three months if the form has not yet been submitted.
Make a note in your calendar so you remember to do so.
Try not to end the conversation without a date to follow up with them.

If they say “no” because there are other issues that need to be addressed before they can formalize their gift:

Ask them when a good time would be to follow up (six months, a year, etc.).

5. No matter what the response, always thank the donor for their legacy gift and their commitment to your organization.

Remember

Even if a donor legally puts their gift in place, they can always change their mind and revoke the gift (unless it is irrevocable). Effective donor stewardship will help ensure legacy commitments remain in place.