Episode 263: Why NOW is the Time for Planned Giving Conversations with Donors
Thanks for taking a few minutes of your day to join me, Randall, on this edition of Around with Randall as we enter the end of this calendar year. But if you're listening to this at another time, I think it's as appropriate based on the circumstances of our financial.
Aspects of our economy. There's never been a better time to introduce planned giving a state, giving options to donors, and prospects. In particular, donors and most likely donors have given gifts before because they align with you. You're having hopefully, the conversations in, People are looking for a sense of certainty. I've come to believe that as we've gone through that, obviously the chaos of Covid coming out of it and now kind of entering back into a sense of regular time, so to speak, but still some memories and connections to those.
And that uncertainty, certainly the economic and political uncertainty, whether it's tariffs or whether it's inflation that is kind of bouncing goes way up. Now it's come back down and now moving back up. It's uncertainty in the markets as they are bouncing all over the place. Depending on unknown factors of what the fed might do. We have a national election coming up which will be very interesting.
In November of 2026. Uncertainty is something that causes people from just a human perspective to pull back, to say, yeah, I'm not quite sure what's going on, so I'm going to retrench a little bit. And that includes that they're giving. I've since this with my wife and I as we talk about our end of the year giving, but do we want to quite do as much in terms of what we normally do based on the sense of volatility, volatility, uncertainty and the people that I have the privilege of speaking with from the clients that I serve, but also number of clients more and more are actually asking me to have planned having conversations with different prospects or donors to give them a sense of what the options are. I'm hearing the same thing for them. And so today we want to talk about why this is so important, what are kind of the factors that we might want to be dealing with. And then lastly the tactical which is the most important is how to introduce these discussions opportunities into plan giving conversations during this kind of different levels or processes of uncertainty.
So we'll start at the top and work our way down into the specifics. I would be remiss if I didn't say there are a number of episodes about plane giving that I've done here on the ground with Randall over the years, probably the one that is. If you're looking for some basic information, episodes 53 through 57 is a four part series on the aspects of what it is, why we do it.
What are some of the details? How do we do with the gifts? How do we build communication things of that nature? I would recommend you go back and look at those. Those could be excellent opportunities for you to get some baseline information about estate and plane giving. So, let's talk about where we're at currently. And I mentioned this at the top.
One thing that we know is that most obviously plane gifts are coming from people that are a little bit older in the world. And having watched my mother and my deceased father go through this conversation. It's interesting to always talk about it, but then to see it happen in real life, where there is some level of uncertainty about things like interest rates.
There is a mentality that happens when people are retired, that they're particularly if they've made some resources or made money in their life, and all of a sudden they're not making that same money anymore. Whether they owned a business, whether it was their they were a high level employee in the market, in the how they choose to invest, they may get more conservative to protect it.
And there's a moment that occurs where people say, oh my gosh, I don't have as much opportunity to earn anymore. The income side of it is, is either gone or disappearing quickly or soon. Interest rates become a real conversation in the markets. So we'll start with interest rates. Interest rates are kind of steady at a low ebb, particularly if you're looking to have a very conservative but consistent income flow from your investments, bonds and or what I would call market securities, the equivalent of a CD in a bank or a savings account, you get one, two, 3% max.
Well, one, two, 3% may seem like, well, that might depend on how much money you have. Might be okay, but that's juxtaposed to inflation, which is also running at about just under 3%. So the reason I bring up interest rates is and the kind of the volatile volatility of the market that's tied to it is that people are looking for consistency, a sure thing.
How do I know I'm going to have the resources to take care of myself or my loved ones? Then you throw in the markets and we've seen wild swings, more so than I think I've ever seen in my lifetime. I'm kind of a nerdy financial person who watches the markets constantly looking for trends, not so much for my own investments, but because I find it fascinating and interesting as to why decisions are reached when people invest, or when they pull their money out.
And this volatility is causing people, particularly with larger asset pools, to see their money depending on invested go up and down. And that's causing a lot of insecurity. People are concerned about where am I going to go to make sure I can keep making money, or at least keep my money. Then on top of it, which we've talked about in a number of podcasts over the transom of this particular podcast, is the immense transfer of wealth that's coming.
We're talking about trillions of dollars. Cirelli, is one. Merrill Lynch has done another study somewhere, depending on the markets, between 85 and $90 trillion in the next 25 years. So people are being forced into these thought processes. And I sense this as I watch my amazing mother as she kind of goes through her discernment. It's about what she wants to do with her assets.
And I'm just listening. She's unbelievably smarter than I am, but she's wondering, what do I do? How do I do this? Well, there's a two part component. Number one is that this transfer is going to occur, this transfer of wealth. People getting older have to make these decisions. And number two is, is that because of the size of the money, these decisions are also pushing them to consider not just leaving it all to their children, which is something I talk about constantly, that some of the wealthiest people I've had the privilege of working with say something very consistent.
I'm not leaving my kids. So you put these things together with markets are uncertain, and we've got interest rates that are lower, and we've got a demographic growth in the people who are going to be transferring trillions and trillions of dollars of their wealth. All this at the same time, they're trying to figure out what to do with it.
And a lot of them are saying, I'm not going to be leaving with my children. I'm going to be doing other things. So what does all this mean? Well, it means that this is why I'm saying there's no better time to talk about the options that plain giving provides people. Number one, to make a difference. Number two, to save on taxes.
And number three, potentially to make charitable gifts. I have a client that I'm working with, and they've had me spending a little bit of time with a really amazing a donor who's trying to figure out what she wants to do. And one of the things and, you know, with the changes in the July 4th, 2025 bill that put the level of which the exemption is for, for states at $15 million, 30 million for a couple, you would think, well, this doesn't mean it doesn't mean everybody.
And what I tend to forget, because I live in Nebraska, where we don't tend to have this as much. So, a lot of states with larger amounts of taxation when it comes to states. And so the first thing she brought up was I don't want I don't want the state of X to get all this money or a percentage of it, and the exemptions a million to a couple million dollars in her case.
So, we have state income taxes. But the reason I bring this up is that they're trying to figure this out, and it matters because they can't be buried with it. They can't burn it. They can't, they nobody really wants to pay taxes for those that maybe it's state level, or if you're above 15 million or 30 million federal that they're trying to figure out what this all means.
And so, these conversations are becoming actually, I'm out of the practitioner side of the business, but are becoming more and more constant with my clients. And what I'm telling them is now is the time to make these decisions. And maybe there are some things the nonprofit can do for you right now to guarantee income. So the we talk about why.
So, the bigger, broader picture. Now let's talk about the how. This is the part that is many times flows mixing nonprofit leaders gift officers, major gift officers, even specialized playing giving officers or bequest leaders. They're trying to figure this out. And what they fail to realize is that really some basic conversations and some simple questions elevate the conversation or discussion into very easy to translate action steps.
And so, let's start kind of from the bigger thing. The first thing is, is that from a and talk about this in episodes 54 to 57, as mentioned, you're trying to solve their problem, not get money for your nonprofit. The mentality with estate giving starts with the premise that if you really are legitimately the right person in the industry, doing the right things, particularly when it comes to estate giving, we're trying to solve their challenges, their problems.
Now, many times that means that a charitable gift might come, but that mentality is important because that's how I start my conversations. Tell me about what you want to accomplish. What's most important to you you've given to this organization? Why is that important? When you look at your estate, what are your goals? Tell me about your kids or if there are no kids, tell me about significant other.
What are your concerns about the rest of your life? Notice I didn't talk about anything about actual what is it they want to do in terms of a plan or an instrument in their estate? I'm asking about them, and what I'm finding I'm hearing most often are. Exactly what we started with is, is that it ties to life events, meaning they're getting older, they're watching their kids, they're thinking about the various aspects of what might be possible.
They're looking at the market conditions and they're concerned. They want to focus on doing whatever it is they want. And they'd like some consistency concreteness in this process or with their money. So what does this language sound like? Because these are all different circumstances that may come up when you ask these questions. What are you concerned about? Tell me about your kids.
What's your plan? What do you want to accomplish? So let's start with the tying it to life events, i.e. maybe grandchildren being born. Because that said, Russell James does a fabulous job in his research down at Texas Tech. And one of the ten things that when people add philanthropy into their estate plans is when they have grandchildren. Or maybe they've retired, maybe they've lost a loved one.
There's some kind of life event.
What I'll try to always do is make them feel less isolated, like they're alone. Many times the conversations I have start with something like, there are a lot of people that I speak with, like yourself, who are trying to figure this out. And right now, let's use life events. This is a time when I see people make decisions, revisit, have thoughts about what they want to do with their estate plans.
If this is appropriate, could we talk about that? How can I help you? And you'd be surprised if you don't do this on a regular basis. How actually, if you have the right relationship, how reassuring that is to a donor if you position it about helping them, not about making money for the nonprofit, bringing in a gift, people that you have relationships appreciate that.
So you can frame it as a lot of people in your position. I've had the privilege of working with ask the exact same questions. I've helped them. Is that something that you want to talk about? So one position or one place is tied to their life events. Number two is they're looking. Maybe it's not life events, but as we mentioned, it's market conditions or the inflationary rate or interest rates or they're concerned about how long it's going to last.
And here's where you get into the consistency. The concreteness that might be available. You know, with the changing interest rates, the markets, the political situation, tariffs, many donors are thinking about long term sustainability rather than short term gains or position, as are thinking about long term giving rather than short term gifts. Is that something that might be worthy of a conversation?
Maybe it's interest rates they have. They're very they've got a certain percentage of their assets that they think of as the kind of their bank of money. They're going to use assets in a savings account, which is earning nothing, even if it's an online quote unquote, high interest savings account or C interest rate, that, you know, interest rates can go up and down and make that uncertainty of life really challenging.
There are lots of things that maybe are other options that can make a charitable gift possible, as well as provide you a concrete income stream. Annuities, charitable remainder trusts I would mentioned really trained charitable trusts up front. But you're mentioning has what their concern is their focus. If you do this in the right way in these kind of conversations, what you end up with is a series hopefully of disclosures on their part as to what the problems are.
And really, this is about normalizing this conversation. It's not about death. We're not talking about, well, when you die, it's what are your plans? Are you concerned about them? And I also would give you this piece of advice. The more you make it less formal, the more you deemphasize the formal nature. Meaning you're not in a suit. It's a it's a button down shirt and a glass of lemonade or your favorite cocktail sitting out on the lanai, the porch, the patio.
It's playing golf. It's taking a walk with the donor. I find these conversations occur better when we are not quite as formal, because that's when we can all relax. And again, if we're not talking about them making a gift to us right now, we're talking about what their concerns are, solving their problems, that actually by bringing down the level of formal attire, nature, conversation actually leads to this idea.
What I mentioned is normalization. People want to have these conversations, but they don't want to be. They don't want to feel like they're being sold something.
They want answers to the questions, but they don't want to be sold answers to the questions. What I've learned is, is that, first of all, we don't sell and number two, when we deemphasize formality, we get to that normalization of just talking.
The last thing I would advocate, as you look at it, as kind of an opportunity to broach this subject and give them options and things to think about is, is that flexibility is key here. One of the things I love about playing giving is, is that no matter the circumstances, you tell me enough. I can find options. I'd call them various solutions.
They're not guaranteed. But the great thing about playing giving is that every person, couple family has different issues, but the instruments of playing giving allow all of them options to consider that make their situation more viable in terms of what they're trying to accomplish. And here's the second part of that, which is even greater for you. No one expects you to know all of these instruments, to know the difference between a Nim cut and a generation skipping tax or instrument.
There are a few crazy people like me who actually went to law school, studied all of this, not knowing they would spend their life doing it, and fell in love with it and then were able to use it. The technical aspects. If you're a gift officer, you're not expected to know all these details. And that's the great thing about the idea of what I was framing is flexibility.
All you have to do is say two things. Number one, plan gifts can be adjusted to your circumstances to meet your objectives. They can provide flexibility in terms of ongoing conversations as things change. So that's the first thing. Options, flexibility. The second thing is I know just enough to have an initial conversation, but we have other people who are experts in this who can help.
Once we figure out what you want, help you with the instruments they don't. Draft documents are not going to replace your lawyers, your financial advisors. That's their job is to protect you. And you should have those. But I can connect us to people that or a person that can help. There's somebody in your organization who can do this, whether it's a board member and a volunteer or it's an actual.
If you have a team member who has a plan giving bequest, charitable intent in a state's expert.
All of those possible. And if nothing else, give me a call. Heck, I'll come and help you do it. The point is, is that you want to present two things in these moments. Number one is giving them a sense of confidence that there are a lot of options to solve their problem that these options are flexible in now and today, but into the future.
And that depending on the, on the on the needs can be framed or built in a way that solves their problem. And number two, you don't have to know all the answers. In fact, unless you're an expert in this, I would advise you don't. All of this is to say is these are deeper level ongoing, I would say long standing relationship conversations.
But now is an amazing time to have a discussion about estate and plan. Giving some of your best donors, bringing it up in conversation. They made some type of capital campaign gift. A lot of people that we work with, with the current environment are looking at estate gifts to increase or to complete their particular campaign pledges or campaign efforts.
So that's something that might be of interest if you're hearing they're concerned about making pledge payments, or they're a long standing donor and kind of watching what I talked about at the front, maybe pull back a little bit. We got a lot of people just like you. We're looking at the kind of the instability of the financial world, political world, the world in general.
They're looking at opportunities around how their estate might help them so they can have flexibility today, but still make the gifts they want to tomorrow. All of these are language connection pieces that I recommend in terms of options. At the end of the day, one of the things that I've taken away from not only kind of coming up amazingly gray here gives me away 30 years of doing this, as well as the studies that have come out of the various associations around planned and estate giving is the number one reason that people don't make estate gifts is one of twofold.
They don't know what's available or what's possible, and they're scared of it. Or number two, we didn't bring it up as a nonprofit gift officer relationship builder. Well, I can't change their perspective without an educational process, which is another option for your nonprofit. Bring in your donors. Say, look at all these options. But number two is easier. Is bringing it up, asking the questions we've talked about today.
Your responsibility. If you're a gift officer, a board member, a leader is to give options and thoughts to the possibilities to make these conversations available to donors. And in doing so, what you get, some of them will say, I'd love to chat. Some I'm going to say I'm not interested in talk about this at all. And that's also okay.
We're in the business of hearing no. If you're not and you're not doing this very well. But if you just did this with 10 to 15 major donors in a year and got 3 or 4 to say, gosh, I kind of would love to talk about this or I need some help, right? My wife and I've been chatting about this.
We know what to do. That's 3 or 4 every year. That's probably going to be more transformational type gifts rather than just transactional ones. That's really what we're after. We need to reinforce that this is an opportunity. Now is the time. Market conditions are kind of chaotic. Interest rates are low. Political situation is such that we have a lot of people asking a lot of questions, and it's our job to enter into those conversations as an offer to allow our donors to think about what might be possible and, most importantly, to solve their problems.
And in doing so, you will find that there will be charity, that comes philanthropy, that comes gifts that come because you were willing to make them the priority. And now is the time to do this because of all the things we've talked about. If you let this one go, that's on you. It's on your metrics, on your organization, on your mission not being fulfilled the way it can be and should be.
And whatever it's worth, my prediction is this is the future. The next 10 to 15 years of major philanthropy is going to be more state conversations than cash conversations. We have to lean in, and now's a great time to do so. Don't forget to check out the blogs at how for you. It's be two per week. 90-second reads things I read, see, feel, think about, experience, things to get you thinking.
And if you'd like to reach out to me, it's podcast@hallettphilanthropy.com. We've talked about these interesting times that we live in that things are kind of little topsy turvy. I don't think chaos or crazy, but they're not steady. And so, this is where philanthropy is at its best. When there is a sense of up and down and craziness, philanthropy fills that hole between free enterprise that doesn't want to do certain things because it's not profitable, and government which isn't that efficient.
And this is where you fit whether you're a board member or the chief philanthropy officer, a gift officer, infrastructure like the database and prospect management, whomever, maybe you're a non-fundraising leader in the organization and you're listening more and more people are listening. I kind of surprising when I see numbers, but what I do know is, is that this is where our nonprofits and the idea of philanthropy is at its best to fill the hole.
For those who are wondering what happened in my all time favorite saying, some people make things happen. That's us. That's people we partner with the donors, philanthropy, the philanthropic community, the philanthropists. Those are people who make things happen along with us and the work that we do. There are people who will stand around and watch what happens. And then there are those who wondered what happened.
We are people making things happen, partnering with others to do the same for the people are wondering what happen for the organizations, the parts of our community that need assistance, particularly during chaotic times. And I'm hoping you sense the value that you bring in doing that work every single day. I'll look forward to seeing you the next time, right back here on the next edition of Around with Randall.
Don't forget. Make it a great day.