There is a charity fundraising truism that says “you don’t get money unless you ask for it”. But estate planning professionals know that’s not true.
Thirty years ago, I was working in gift planning at a major Toronto hospital foundation. My professional education consistently reinforced the above truism, but my experience didn’t align with what I was taught. My job focused on exceptional donations from wealth and estate donations. To help me with this dissonance, I invented two new terms. The classic peer-to-peer fundraising model became “social giving” and the gift planning process “personal giving”.
Donations that are part of the estate plan are typically a form of personal giving. By contrast, most traditional fundraising uses a social giving model. Both are equally important, but I have found it helpful to make the conceptual distinction when working with donors and clients.
Social Giving
To understand the social giving model, think about a charity fundraising campaign. The campaign – a model originally borrowed from the military – has a timeline, a monetary goal, and clear priorities. The charity uses the campaign period to articulate its “case for support” and identify prospective supporters. It’s a proactive management tool to focus energy and raise money.
Traditionally, volunteers have been recruited to solicit donations from friends and acquaintances, and often the volunteer has as much to do with a positive response to an “ask” as the cause itself. To encourage donations, charities typically use public recognition to provide social reinforcement. The down-side of this model: donors can feel like their giving is reactive or a response to social pressure.
Fundraising assumptions
Social giving depends on a complex mix of societal expectations, community bonds, pride, guilt and altruism. Although fundraising is now more dependent on professional staff, a lot of fundraising is still reliant on volunteers asking their peers to give, participate, show up, and be counted. There is reliance on community good will, mutual obligations, social standing (donor recognition anyone?) and, at times, good old-fashion peer pressure.
While generosity and commitment to the cause play a role, at heart, “people give to people” – which is another old fundraising truism. It’s the classic sales model adapted to the world of charity.
Personal Giving
Personal giving is the inverse of social giving. The classic personal donor gives without being asked. It is a process that starts with the individual or family deciding to give, rather than responding to a fundraising request. It’s proactive, not reactive; intrinsic, not extrinsic. The gift is from assets and is enabled by financial and estate planning executed in private.
Personal donors give as an expression of deeply-held values and beliefs – often in response to profound life experiences. That’s partly why, for example, only 10 per cent of bequest donors inform the charity of their gift in advance. This dynamic has significantly increased due to the rise of donor advised funds and private foundation.
Estate donations and personal giving structures typically are formulated through planning, not fundraising. It’s not about what others expect of you, but rather what you want to do. Tax issues play a bigger role with asset gifts than with gifts from income. Goals are identified through discovery with a professional, who may be fundraiser, but is likely to include a team of trusted advisors. Estate and DAF donors support charities they believe in, and rarely because they are asked to do so by the charity itself.
The Motivational Divide
Being aware of this motivational divide is helpful to planners, fundraisers, and donors. It’s essential to understand that some individuals — particularly the affluent who get solicited often — give differently. This difference is especially true today with wealth concentration, increased professional support for planning, and charitable structures like private foundations and donor advised fund.
Estate donations are rarely triggered by one-off solicitations by a charity. They are the result of lifetime relationships and experience of the donor. Estate donors need the space to make important personal decisions. Intrinsically-motivated, personal giving is a freeing experience that leads to more meaningful philanthropy — grounded in the donor’s own values and beliefs.
