What are charitable bequests for nonprofits?

Did you know that bequests make up 10% of all charitable giving in the US?  And contributions from realized bequests to nonprofits totaled $43 billion in 2019.

Charitable bequests are gifts left to a nonprofit in a donor’s last will and testament. They are one of the simplest, most impactful, and popular ways to make a planned gift. Plus, they're almost always the largest gifts your donors will make in their lifetimes.

These gifts aren’t just nice to have — they’re transformational for your nonprofit. Let’s talk numbers: the average bequest left by a will-maker on FreeWill is over $60,000. And in 2020, even amidst a global pandemic, the amount of all bequests made to nonprofits on our site totaled over $1 billion. These are major gifts from high-impact donors that will support your organization for years to come.

And once a donor includes a nonprofit in their will, they are much more likely to give to that organization again in the future. Research shows that bequest donors increase their average annual giving by more than 75%.

What are 3 types of bequests a donor can make to your nonprofit?

When a donor leaves a bequest, they give a part of their estate to a person or organization in their will. It can consist of cash or a different type of asset, like shares of stock. When a donor gives a bequest, it’s typically in one of three ways:

1. A specific amount of cash to your organization (i.e. $10,000);
2. A percentage of their total estate (i.e. 10% of an estate of $1 million would be $100,000 to charity); or
3. The remaining value of the estate after all other bequests or debts have been paid

In some cases, a donor may name a nonprofit as a secondary or tertiary beneficiary of a bequest. Those words may sound complex, but a primary beneficiary is simply the individual or organization who is first in line to receive a bequest. If the primary beneficiary passes away before the estate holder, the gift then goes to the person or organization who is second in line (secondary beneficiary) and so on.

Who is most likely to make a bequest?

Bequests are a great option for any of your donors, young or old, as they don't cost anything during their lifetime. That leaves a wide range of potential givers. However, in our 2020 Planned Giving Report, we found that these donors do tend to have a few things in common:

• Age: Those over 44 give more than 80% of total bequest dollars on our platform. We've also found adults aged 45-64 represent 50% of the total value of all charitable bequests made using our tool.
  
  
• Value of assets: The higher the value of an individual’s assets, the more likely they are to give a bequest. However, 12% of will-makers with less than $200,000 in assets still choose to make bequest commitments in their wills. This suggests that, when presented with an accessible way to make planned gifts, many nonprofit supporters are eager to give.
  
  
• Marital status: People who are single, widowed, or divorced are the most likely to leave a bequest, and for that gift to be of a significant size.
  
  
• People without children: Over 20% of adults without children choose to give to charity — this is double that of donors with children. Their bequests are also much larger, representing around 63% of the total value of charitable gifts made on the FreeWill platform.
  
  
• Pet ownership: Pet owners are 55% more likely to give to charity in their wills than people without pets. If you work for an animal or wildlife-focused nonprofit, you should target animal owners to secure more bequests.
  

How can you start securing bequests at your nonprofit?

To bring in bequests, you’ll need to start a planned giving program if you don’t have one already. There are a few steps you should follow to do so effectively. We go over these in detail in this article on jump-starting your planned giving program, but here is the high level overview:

Step 1: Decide who will be in charge of planned giving.

Once you've decided to start a planned giving program, you need to choose who will be responsible for it. Even if your organization can’t hire a dedicated gift officer, someone should be the contact person for donor questions and follow-up. This will streamline communication and ensure that everyone stays on the same page.

Step 2: Outline your marketing plan.

Just like communicating to your supporters about any other campaigns, repetition and multiple touchpoints are key for securing these gifts.

Before sending outreach, you should make it incredibly easy for supporters to find out and learn more about bequests. Add planned giving as a donation option on your website, or create a dedicated landing page to explain the different types of planned gifts and how to make one. Give your donors resources that make it easy to leave a bequest, such as sample will language, or an easy way to make a will and leave a bequest. And provide the contact information of the person in charge of planned giving in case the donor has any questions.

Step 3: Track gifts and thank your donors.

Bequests can be difficult to track as some donors don’t notify the organization after they've named them in their will. However, we were surprised to find that 67% of donors on our platform opted in to share their contact information with their nonprofit beneficiaries. This is much higher than the general planned giving landscape. When Giving USA conducted interviews with donors in early 2019, they found that only 4% of donors always tell the organization about their planned gifts, and 38.7% of donors sometimes inform the organization.

This means that across the industry, nonprofits are unable to thank or steward the majority of their planned giving donors. To solve this problem, you can survey your supporters to see if there are any who have left bequests and forgotten to notify you. Or, you can use a tool that tracks donor information.

When you do learn about a bequest, make sure you thank the donor immediately. Acknowledge the impact their gift will have on your mission and the future of your organization. If you’re setting up a legacy society, make sure you invite them to take part. This will make donors feel like a part of the community and strengthen their relationship with your organization.

Ready to begin securing more bequests at your nonprofit? FreeWill can help.