[ASK AN EXPERT] How To Document Legacy Gift Intent

Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity.

Today’s question comes from a nonprofit employee who wants advice on how to talk to legacy givers as you document their legacy gift intent.  

Dear Charity Clairity,

I was talking with a donor the other day and he mentioned our organization was in his will. How do you go about asking for amounts and documenting it? For example, we want to document that he is a legacy giver, and we’d love to enter the amount as a pledge. How do you ask questions like that? Is this something nonprofits do? Any other thoughts? 

— Seeking a Record

Dear Seeking a Record,

As fundraising departments everywhere become more data driven, it’s not unreasonable to want to document the amount or estimated value of donor bequest provisions, including whether they are specific, contingent, or residuary and the date of the will or trust. 

Today, the portion of organizations showing the estimated dollar value of bequest intentions on internal management reports may be approaching 50%. For those intentions whose values are undisclosed by the donor, the best practice is to apply a five-year or ten-year rolling average, based on the pool of known amounts.

That being said, it’s important to frame requests for this information in donor-centered terms. 

When asking for this information, let donors know that you’re asking: 

• For future planning purposes
• To assure that their desires are fulfilled 

I don’t recommend requiring donors to report to you the amount of their legacy gift expectancy. What I recommend instead is asking donors if they would feel comfortable completing a non-binding Letter of Intent (see my response to Needing Proof below.) Let donors know this will help you ensure that their wishes are fulfilled “to the letter” when their gift matures. You can ask the donor to let you know the expected amount, but make it clear that this is optional.  

Some donors love to share, while others prefer to keep this private. If you have a Legacy Society and list donors by level of giving, some donors will be proud to disclose the amount of their intended bequest. Even if donors choose to keep the amount private, you can certainly ask them to inform you if they’ve left a specific, contingent, or residual bequest.  

As you know, all of this is important for internal planning purposes and can be helpful not just with financial forecasting but also with plans for future stewardship. Since residual bequests tend to be the largest in size (most people underestimate the value of their estates at death), knowing this can help you prioritize certain programs, campaigns, or cultivation efforts. 

I particularly like to give donors the opportunity to write a bit about themselves and why they left the gift, telling them you’d like to be able to share this with future generations as a way of:

• Making sure that their memory lives on 
• Inspiring others to follow in their footsteps  

Finally, keep in mind that you shouldn’t enter a bequest as a “pledge” on your financial ledger; bequests are always revocable and are not true “receivables” in accounting terms. You can keep a separate record for internal management and forecasting purposes. 

In your donor database, you can enter an expected amount in your notes for your own tracking purposes. The only reason you’d ever have a binding bequest pledge is if your nonprofit intended to sue the estate for the money after the donor died. This is seldom a good look. As one of my mentors once told me, “If you wouldn’t want to see it on the front page of the local newspaper, don’t do it!”

It’s fine to seek a record; just know why you’re doing so and how you’ll use the information you receive.

— Charity Clairity

Dear Charity Clairity,

I have a question for you regarding “proof” that a donor has included our organization in their will. Every organization I’ve been part of has had a Legacy Society of some sort. These Legacy Societies have included some pretty great benefits (invitations to exclusive events, discounts, etc.). When inviting donors to the society, we’ve always asked them to provide us with a photocopy of the part of their will that names our organization as a beneficiary. 

I recently started at a new nonprofit and was met with a lot of pushback at this idea. I asked one board member to send us the photocopy so we could add it to their file, and they told the board’s president they were offended we would even ask. 

I’ve always thought this to be a best practice in the legacy planning world, but maybe that has changed?

— Needing Proof

Dear Needing Proof,

I’ve never heard of this as a best practice and have never used it anywhere I’ve worked or consulted. But maybe I’m the one out of the loop!

But here’s what I know: People can get squeamish when it comes to sharing their personal financial and legal information. Generally, I’ve taken notification that someone has included us in their estate planning as an object of faith. After all, they could remove you from their will the very next day should they so desire. So the photo only “proves” something at a distinct point in time.

That said, I do recommend asking legacy donors to complete a non-binding Letter of Intent. You can find some examples here and here. If your donor wants to share specifics regarding the amount and giving vehicle, they can do so, but the basic function of the Letter of Intent is simply to formalize their commitment in some fashion. 

The point of this is that once they commit to leaving the gift in writing, they’re more likely to stick with the commitment—especially if you steward them over time. The written Letter of Intent serves as a record so that future staff will also be alerted to the need to continue the ongoing cultivation and recognition of these loyal supporters.

One of the things I myself like to include in this Letter of Intent is a space where donors can write a personal statement about why they’re leaving this legacy. Let them know you hope to share parts of this statement with future generations who wonder, “Who were Jane and John Doe, and why did they decide to leave a bequest?” 

Many donors enjoy this exercise, and some will even leave notes to their heirs explaining why they did this. 

I encourage you to think about legacy giving, as with any giving, from a donor-centered perspective. This means focusing on their values and the outcomes their gift will make possible instead of the money they’re leaving you. 

One is transformational; the other is merely transactional. Thinking about values and outcomes brings people joy. Thinking about money can sometimes inspire those squeamish feelings I mentioned above. 

Don’t think about a donor joining your Legacy Society as a transaction. Think of their joining as something that transforms their life and your cause. 

When a donor commits in this way, they self-identify as someone who considers themselves a part of your family. They’re taking care of you, just as they would a family member. They’re invested in your success. 

If you trust them, value them, and nurture them, the relationship will continue to grow. In fact, research shows that when people commit to a legacy gift, their joy spills over to their annual giving as well, often resulting in increased lifetime support. 

If you take away from that joy by requiring them to show you their bank statement or will, they may feel you don’t trust them; this could potentially weaken or break the end. 

Err on the side of generosity and gratitude. If you treat people as members of your nonprofit’s family, they’re more likely to treat you the same way.

— Charity Clairity

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