How To Attract Major Gifts

An IRA is one of the worst assets to leave to your heirs. Here’s an alternative that can save tax on your IRA and benefit your church.

Meet Bill and Ann. Bill is retired and has an IRA worth $1,000,000–not unusual in today’s mega-IRA world. They both have other assets: Ann’s 401(k) from her career, their home, other investments and the proceeds from the sale of Bill’s business.

Bill has named Ann the beneficiary of his IRA. When he dies, Ann will re-name the IRA in her name, continue to draw income for the balance of her life and then leave it to their three children.

A “typical” plan. Exactly what most people do.

But it’s a tax disaster.

Take a look at the “before and after” results (just with respect to Bill’s $1,000,000 IRA) in the chart below. Plan A is Bill and Ann’s current plan. Plan B shows the results of a technique I teach in The Smart Giver.

Which looks like a better plan to you?

Most people are what I call “flying blind.” They don’t even know there is a Plan B.

Your church probably has a number of “Bill and Anns.” Knowing about Plan B can endow your church in just a couple of transactions.

The Treasury Department estimates there are currently 3 trillion dollars in IRAs. Right behind this are 60+ million Baby Boomers (the oldest turning 63 this year) who hold 12 trillion dollars in qualified plans such as 401(k) plans.

Will your church get its fair share? Could you help people within your congregation divert money that otherwise would go to the government to their heirs and your church?

For more information about this plan, see the video entitled, “How To Leave 100% Of Your Estate To Your Children Tax Free” on my video podcast site.

This concept is also the subject of one of the 24 lessons in The Smart Giver, an educational series designed to help people increase their income, reduce taxes and help their church all at the same time.

Critical Statistics For Church Fundraising

One of the first tenets of selling is to define your market. Once you’ve done that, the next step is to research the demographics of that group of people. Then you need to determine how you can best reach them. Where do they hang out? Finally, you have to choose the medium(s) by which to communicate your message.

If you are involved in fundraising for your church, let’s call a spade a spade: you are selling. If you want to be as successful as possible in your endeavor, you really need to walk through each of the above steps.

I subscribe to Contributions, a publication for nonprofit professionals. Recently there was an article by James P. Gellat, PhD (I have put his bio below) about trends in a number of areas. I have extracted a few that have a bearing on churches. They are all great food for thought and, in my view, should be addressed when putting together any fundraising campaign.

• Nine countries account for half of the world’s population. In 2050, the four largest countries will be India, China, US and Pakistan. Globally, there are more people over 60 than under 15.
• In 2007, the number of people in the United States turning 60 increased by 600,000. By 2050, the elderly population will double.
• The Baby Boom Generation (those born between 1945 and 1964) account for 40% of US households and half the consumer spending. Boomers are twice as likely to own a second home. Even by 2010, spending by Americans 40 or older will be one trillion dollars more than the 18 to 34 age bracket.
• In addition, it is predicted that 80% of the US population increase in the next 30 years will be immigrants and their children/grandchildren.  By 2016, one in four Americans will be Hispanic.
• More than one quarter of all US households are singles.
• About 28 million Americans are classified as “contingent workers”, that is, they work part time, do outsourcing work or work by contract. That is 400% greater than in 1980. While Americans traditionally have commuted to work, today 60% do jobs where the physical location is not a factor.
• Thanks to technology, all of the routine transactions that a business or consumer does each day are being replaced by some kind of digital technology. For example, there is now one cell phone for every two humans on earth. It is predicted that eventually there will be more cell phones users than people who can read or write.
• 120,000 blogs are created every day. People are uploading 15 hours of video per minute to YouTube. Facebook has 175 million users, uploads 415,000 videos per day and now is the world’s largest online photo site. Go do your own research on Myspace, LinkedIn and Twitter. The reach these social networks have will blow your mind.
• Donors who are used to direct mail are “aging out” (what a great term!). Wealthy people are increasingly likely to use the Internet to make their donations.

I hope that these statistics cause you to stop and do the preliminary research about the people you are trying to reach, how they access information today and all the options you have to communicate your message that you never have used before.

James P. Gelatt, PhD, is the author of “Managing Nonprofits in the 21st Century” and general editor of Aspen’s Fund Raising Series for the 21st Century. He is the president of Prentice Associates, a management consulting company specializing in national associations and nonprofits, and a past-president of the Greater Washington, D.C. chapter of the National Society of Association Executives.