Click Here for a Business Case for Support Example
Have you ever found yourself passionately promoting your Planned Giving & Trust Services program, and asking for more support from your own organizational leadership? I’m not talking about asking for a bequest in a will or trust to your organization, but rather asking leadership to give you more operating budget, more personnel, and dare I say more time by taking away the ten other departments you are responsible for and allowing you to focus solely on PGTS. Many of us have had to make the case for our own PGTS programs, and thankfully this ministry is a value added to the entire organization and can be demonstrated as such through a Business Case for Support.
What is a Business Case for Support?
What is a Business Case for Support, you ask? It is a document you can share within your organization that reports all the dollars brought in by PGTS. Dollars that represent the very lifeblood of the organization, funding the many ministries, programs, and endowments that are the beating heart of your mission. We all know that if you cut off the blood, the heart will eventually stop beating. This report demonstrates that PGTS is just as vital to the organization, as blood is to each and every one of us, and therefore should be supported by your organization.
A Business Case for Support uses data to capture the reasons why a PGTS program is vital to having a thriving ministry. It sets goals for PGTS, creates a standard to measure the goals, and establishes metrics for tracking whether the goals have been met. It shows key decision makers the value of PGTS by measuring past performance, tracking current trends, and projecting potential planned gift maturities. The Business Case for Support can build consensus among your Executive Committee, your Trust Management Committee, and the rest of your fundraising team by sending a clear picture to all involved what the PGTS program is striving for. The report will also articulate the risk of not having a PGTS program, or underfunding the program, and sound a warning when you are not reaching your full potential.
Data to Track
To effectively use a Business Case for Support you must accurately track your data. For the PGTS department, it all starts with knowing the number of individual living donors who have made a deferred gift to your organization. The best way of doing this is by having a Legacy Society, or a program where your organization recognizes donors who have set up gifts through a will, trust, beneficiary designation, or split interest gift such as a charitable gift annuity or charitable trust. If possible, it is helpful to also get an idea of what the size of the gift will be. You can do this by estimating the remainder amount depending on the type of gift it is. With charitable gift annuities, or charitable remainder trusts the estimated remainder amount shown on a gift illustration can be used when the gift was established. And charitable remainder bequests in a will or trust can be estimated if you have gathered information on their assets and determined an approximate net worth.
It is also vitally important that information is tracked on matured gifts from estates received over the last ten years. This ought not to be too difficult because this information should already be tracked for the annual NAD PGTS Report. Keep track of who the gift came from, how the gift was given, and the size of the gift. This will allow you to mine the data to spot trends and help project future expectations. Often this information is consolidated into giving units, so if both a husband and wife give a gift through their estate you can track them as one giving unit. The same is true if no gift is given from the estate of the first to die, but a gift is realized from the second to die, and the gift is credited to both husband and wife as one giving unit.
Another key piece of information that you should have, and is not tracked by PGTS, is the number of current donors your organization has overall. You should have this information so you can see what percentage of your current donors have committed to giving a deferred gift and are members of your Legacy Society. Generally speaking, you should strive for 5 – 10 percent of your total donors to be part of your legacy society.
Elements of the Case
Below is an example of elements you can incorporate into your Business Case for Support. This information should be considered suggested guidelines. You will have to work out for yourself what your organization is able to track. You should also work out your own set of rules for tracking information. For example, you will need to determine when to include information for a couple when the first spouse dies. Typically you would not include the information until the surviving spouse is deceased, but you may decide to track this information differently. As long as you are consistent then you should find this report useful to your own organization.
Click this link Business Case for PGTS Example, to help you visualize what is described below.
#1 Living individual donors who have made a deferred gift to your organization.
- List the number of members in legacy society.
- May include anonymous donors as a separate category.
#2 Percentage of active, living, individual donors who have made a deferred gift to your organization.
- List the total number of donors tracked by your organization.
- Divide that number by those who have given at least one gift in the last three years.
- Divide that number by the individual donors in your legacy society.
#3 Total number and dollar amount of matured gifts from estates received over the last ten years.
- Make sure to count number of donors rather than number of distributions. There could be multiple distributions from an estate, but these should all count as one gift from the donor.
- Total the dollar amount of gifts
#4 Average matured deferred gift size over the last ten years.
- Divide the total dollar amount of gifts by the number of gifts
#5 The number of Legacy Society members of the total number of matured gifts over the last ten years.
- Compare the names of the donors for the matured gifts to your Legacy Society Members and list the number of expected realized gifts.
#6 The number of donors who died and left an estate gift but were not known prior to death over the last ten years.
- After comparing the names of the donors for the matured gifts to your Legacy Society members list the remaining number of donors who were unknown.
#7 Percentage of known donor among the total number of realized gifts over the last ten years.
- Give the percentages of known and unknown donors.
- For many nonprofit organizations, the number of unknown donors is typically higher than the known donors.
#8 Unknown gift commitments based on known/unknown ratio
- Multiply the number of people in your Legacy Society by the percentage unknown donors in #7.
- This will give you an estimate of how many possible gift commitments have been made that your organization is not aware of.
- The longer you track this information, and can track trends, the more accurate your projection will be.
#9 How many members of the Legacy Society died over the last ten years?
- Keep track of all Legacy Society members who you are notified of their death.
#10 How many of the Legacy Society members who died over the last ten years left a gift as they indicated?
- List the number of Legacy Society members who died in comparison to the number of those who left a gift to your organization
- You may end up tracking someone who has died and not received their gift for multiple years. This is okay. Because you are tracking this information over a ten year period it should eventually even itself out and become fairly accurate.
- If the person is the first spouse to die you do not need to track their information here, only track after the surviving spouse has died.
#11 What is the Stick Ratio?
- Divide the number of realized known gifts by the total number of Legacy Society deaths.
- If the stick ratio is quite low you should then look at your donor stewardship activities and work to improve retaining your planned giving donors.
#12 What percentage of the organization’s revenue was provided by estate gift maturities last year?
- Take the total revenue for the organization and divide it by the total maturities from estate gifts received in the year.
#13 How many individual donors gave what you consider to be a major current gift to your organization last year?
- Determine what amount equals a major gift for your organization. Many will say $5,000, some will say more, and some will say less. Make it an amount that is reasonable for your organization.
- Track the donors who give gifts to your organization. This is important to do, and may require several conversations with a variety of stakeholders if you are not already tracking this information.
#14 How many of those major gifts were funded by publicly traded stocks or non-cash gifts?
- Again, you will need to track this information
#15 Number of donors who made blended gifts (partially current and partially deferred) to your organization last year.
#16 Number of donors who have made a gift in 10 of the last 10 years to your organization.
- This is an important stat to track because it measures affinity and loyalty to your organization. You can often track your constituents’ overall mood toward your organization by measuring this statistic.
#17 The amount of revenue generated if 10 percent of your loyal donors (those measured in #16) made an average-size estate gift (that figure measured in #4) to your organization.
- Multiply #16 by 10 percent = Potential Estate Gift Donors (PEGD)
- Multiply PEGD by Average-size estate gift (#4) = PEGD Gift Size
#18 Do the same calculation, but use 15 percent of the long-term donors.
#19 What is the value/potential of revenue from undiscovered estate gifts?
- Take #8 and multiply it by #4.
- This will tell you the potential room for growth if PGTS is invested with resources such as time and budget.