Legacy giving: How to build thriving programs & connections
Legacy giving represents an incredible opportunity for nonprofit organizations to deepen relationships with supporters and sustain their work for decades to come. It’s a uniquely meaningful and impactful way for donors to give to your cause.
Of course, launching any type of giving program brings complexities, especially if you’ve never ventured into that form of fundraising before.
If your organization is new to legacy giving, you almost certainly have a few questions. What background knowledge, tools, stewardship strategies, and logistics need to come together to create a successful legacy giving program? What challenges should you anticipate?
In this guide, we’ll take a closer look at legacy giving, how it works, and why now is the time to get started.
Understanding legacy giving & legacy gifts
Let’s start with the basics. Here are some of the most common questions that newcomers have about legacy giving:
What is legacy giving?
Legacy giving is a type of fundraising in which donors create gifts for nonprofits as part of their estate plans. This means that legacy gifts are typically deferred and won’t be disbursed to the nonprofits until after the donor passes away and their estate plans are executed.
Legacy giving is also referred to as planned giving. This category broadly encompasses both deferred estate gifts and gifts made through financial plans (that might be given during the donor’s lifetime).
What are common types of legacy gifts?
Bequests are by far the most common type of legacy gift. They’re also simple to create—a donor simply makes an addition to their will naming a nonprofit as the recipient of a flat amount, a percentage of their estate, or the remainder of their estate.
The average value of a bequest made through FreeWill is $46,594, but bequests are accessible and popular among donors at all giving levels.
Other types of legacy gifts include:
- Donations of unused retirement assets
- Beneficiary designations on life insurance policies
- Various types of annuities and trusts with terms set for the donor’s lifetime
Gifts made through financial plans (as opposed to estate plans) can include similar annuities, trusts, and other arrangements, as well as non-cash gifts like stock and qualified charitable distributions from IRAs. Although these aren’t technically legacy gifts, many nonprofits pursue them as part of an overarching legacy giving or planned giving program.
To learn more, explore our longer guide to the most common types of planned gifts.
Why do nonprofits pursue legacy gifts?
Legacy giving brings significant benefits to nonprofits when consistently pursued:
- Legacy gifts are often unrestricted and can serve as predictable sources of operating revenue, fueling growth and sustaining a nonprofit’s work for years to come.
- Gifts like bequests are accessible to large segments of donors, not just what we might think of as the top of the donor pyramid—anyone can create a bequest and donate portions of their saved assets.
- Legacy giving generates high returns on investment (an estimated $56.83 for each dollar spent on pursuing bequest gifts), making it an extremely efficient form of fundraising.
- The deepened relationships that nonprofits forge with their legacy donors often lead to increased annual giving in their lifetimes, roughly $3,000 more per year.
- Legacy giving is also on the upswing—we saw a 7% increase in the number of bequests created in 2022. Demographic shifts are also spurring a historic transfer of wealth (roughly $84 trillion) between generations and to charitable causes, leading many to anticipate dramatic growth in planned giving in the coming years.
Building a legacy giving program also opens up a range of new fundraising opportunities over time. Using legacy gifts as a springboard, many nonprofits grow their broader non-cash giving efforts by educating donors about their options and encouraging them to think beyond cash.
How do donors benefit from legacy giving?
Donors also see unique benefits from legacy gifts:
- These gifts allow donors to leave meaningful, lasting legacies for themselves or loved ones with the organizations they love and that have played meaningful roles in their lives, like charities, churches, and schools.
- Legacy gifts can be restricted and customized by donors, allowing them to focus their legacies on the specific programs and initiatives that are most important to them.
- Legacy gifts also bring a wide array of tax benefits. Most gifts reduce a donor’s federal estate taxes, and others can bring immediate deductions on property and capital gains taxes. It’s important to keep in mind, however, that IRS regulations change frequently and that your nonprofit should not offer direct financial advice.
Understanding the benefits and motivations behind legacy gifts will allow your nonprofit to speak about them much more effectively. Center these benefits and the positive impacts that legacy gifts have on your mission in all your conversations with donors.
What is a legacy giving program?
A legacy giving program is the distinct set of processes, tools, and strategies that a nonprofit uses to manage and grow its legacy giving efforts over time.
Like any other type of giving program, legacy giving requires organization and dedicated strategies—prospects must be identified and contacted, gift officers need plans for growing their relationships with donors, donations need to be recorded, and the program needs to be promoted. We’ll explore all the steps for developing a legacy giving program below.
Quick look: Legacy giving by the numbers
If you want to make legacy giving a priority for your organization, you’ll likely need to lay out a strong case to your leadership and board. Data and trends can be invaluable for this task—let’s take a look at some key findings from the 2023 FreeWill Planned Giving Report:
- 264,252 individuals created estate plans through FreeWill, and 15% of them chose to leave a bequest. These 40,123 bequests total $2.36 billion.
- The average value of a bequest was $46,594.
- 20% of will-makers aged 18 to 24 chose to create a bequest, and their average gift size increased by over $9,000. Will-makers aged 25 to 44 also saw increased gift values.
- Will-makers aged 45 to 65 saw no year-over-year growth in gift value but still contributed 38% of all charitable bequest dollars, making them the highest-impact demographic.
- The single largest bequest gift was $25 million, a full $10 million more than the largest gift created in the previous year.
What do these statistics tell us? Legacy giving is poised for continued growth. As younger donors proactively consider their estate plans and choose to give more, older donors are maintaining their giving habits.
By building connections with all of these groups now, nonprofits can tap into powerful demographic trends and build solid foundations for growth in the coming years. And to do that, they’ll need to devote time and resources to legacy giving through a dedicated program.
How to build a legacy giving program: 10 steps
So how do you build the practices and processes for a thriving legacy giving program? We break it down into ten key steps:
1. Outline the program’s essential guidelines.
Begin by laying out the guidelines for your program and outlining a rough strategy. Early in the process, you should establish:
- Roles and responsibilities. For larger nonprofits, this typically falls to an existing development department. Smaller teams should assign a fundraiser, organizational leader, or even a volunteer—it can be anyone as long as they have time to take the lead.
- A budget and resources for your legacy giving efforts. Although legacy giving is a highly efficient form of fundraising, it still requires dedicated tools and time.
- Your current state. Have you already secured bequest gifts? Review your database for any past gifts. Remember that donors don’t necessarily need to notify you about bequests, so sending a brief survey to check for existing commitments and gauge general interest can be invaluable.
- An initial goal. If you’ve secured legacy gifts in the past, by how much would you like to grow your commitments? If you’re starting from scratch, how many bequests do you think you can secure within the next year? These goals can be revised as your program comes into focus, but starting with an idea of what you want to accomplish will be helpful.
2. Educate your team on legacy giving.
Legacy giving is more complex than straightforward gifts of cash or pledges, and it’s much more personal. Your team will need to know how legacy giving works and how to effectively talk about it with donors to support your program.
Start by sharing resources like this article with your team and discussing them together. To learn how to talk about legacy giving, explore our longer list of tips. Although it can be a difficult topic to broach, there are tried-and-true ways to make these conversations feel unforced and productive. Emphasize the benefits of this form of giving and tailor your discussion to each prospect’s unique relationship with your mission.
Gather your resources, definitions, preferred phrases, and key talking points into a centralized playbook for your fundraisers to reference going forward.
3. Gather the tools and materials you’ll need.
To facilitate your legacy giving program, you’ll need more than just knowledge of best practices. You’ll need tools and resources to keep your efforts organized. To get started, you’ll need:
A centralized way to record legacy gifts and donor touchpoints
- Consider investing in a database or CRM if you haven’t yet. If you already use a CRM, configure new data tags to use for incoming legacy giving records.
- Even if you opt for a simpler spreadsheet route, the key is to stay organized—determine data entry protocols and guidelines, and stick to them.
An online bequest creation tool like FreeWill
- Bequests are the most common and easiest type of legacy gift, so directly providing donors with a tool to create them is an easy way to boost results and streamline the donor experience.
- Email and phone scripts, pamphlets, personalized donor meeting materials, and more all have important roles to play in the success of your program. More on legacy giving marketing in the next step!
This list should cover your bases as you first launch your legacy giving efforts, but you’ll need additional support over time.
For example, prospect research tools are immensely helpful for sustainably growing your program. And to take your program to the next level, consider investing in more comprehensive software designed specifically for planned giving programs. FreeWill’s legacy giving suite offers innovative tools that help you run your program in smarter ways—explore our platform to learn more.
4. Develop a legacy giving marketing plan.
Create a plan for how you’ll promote legacy giving to your target audience. Laying this out in advance will greatly simplify the task as an ongoing activity, and it helps to ensure that donors are always exposed to legacy giving options even when your team is busy with other initiatives.
We recommend starting with these core steps and building out your strategy from there:
- Develop collateral. As mentioned above, you’ll need a range of promotional materials about your legacy giving program. Since this form of giving is likely new to many donors, you should focus first on educating them and explaining the benefits, not necessarily making a pitch right away. Soliciting gifts can come naturally later as donors express interest and discuss legacy giving with your team.
- Set up your program’s web presence. Legacy giving needs to be represented on your organization’s website. Start by adding to your Ways to Give page, and consider building a dedicated microsite as your program grows. We’ve compiled a complete guide to planned giving websites and the best practices they should employ—check it out!
- Chart out a marketing schedule. Create a plan for where and when you’ll promote legacy giving. We recommend integrating mentions of it into your existing broad outreach, like newsletters and normal appeals, to help publicize your program and naturalize it as a new way to give. From there, lay out a series of messages to send specifically to your list of planned giving prospects.
For a closer look at how to develop a nonprofit marketing strategy for your legacy giving program, check out our guide: Nonprofit marketing 101: How to build a next-level strategy.
5. Identify your first legacy giving prospects.
Take a focused approach to soliciting your first legacy gifts, starting by identifying potential donors. Even as you add mentions of legacy giving to your broader outreach, remember that a targeted strategy should be your primary focus since it’s ultimately a more efficient method (and one that creates more opportunities to fully tailor the donor experience).
To get started, follow these steps:
- Survey your donors. Simply ask whether they’ve already created a legacy gift and/or if they’d be interested in learning more about how these gifts sustain your organization’s work. Record your results and use them as the basis for the following steps.
- Conduct prospect research. Take a closer look at the individuals who responded favorably to your survey. What characteristics do they have in terms of demographics and histories of engagement with your organization?
- Check out industry research, like our Planned Giving Report. Studies like ours include helpful demographic findings that can guide your approach. For instance, did you know that pet owners are among the most generous groups of bequest donors?
- Develop prospect profiles. Gather your insights and create profiles of hypothetical donors who fit certain recurring characteristics, like female pet owners aged 25-44 who have been active donors for 5+ years.
- Segment your donor list. Using your profiles, segment your larger donor database and see what the search yields. These individuals (along with any others identified in Step 1) should make up your first legacy giving outreach lists.
- Refine your list. Double-check your results and prioritize your list of prospects through qualification. You should end up with an organized outreach list that will guide your work going forward.
To learn more about this process (and see more examples and templates), please explore our complete guide to planned giving prospecting.
6. Begin reaching out to donors.
Now, put your outreach list to use!
If you’re working on your own, begin reaching out to your top prospects via phone or email (ideally their preferred communication channel) to thank them for their support and ask about their interest in planned giving. If you’re working with a larger development team, divvy up the prospect list among fundraisers as needed.
Keep track of all donor touchpoints and notes from conversations in your CRM. This will keep the relationships moving forward smoothly and prevent future outreach to prospects who give you a definite “no, thanks.”
7. Expand your reach over time.
Be prepared to grow your outreach lists as your legacy giving program takes off. You can do this in two primary ways:
- Regularly revisit your prospect profiles and prospect research, then re-segment your database to check for fresh insights.
- Manually source new prospects by continuing to mention legacy giving in your broad outreach, directing interested supporters to learn more on your website, and encouraging them to get in touch.
This two-pronged approach will help you develop an active legacy giving pipeline. Just make sure to qualify your new and existing prospects on an ongoing basis—donors’ circumstances and philanthropic interests change, so you should take steps to ensure that your team’s time goes to the individuals who are the most likely to give.
8. Have a long-term legacy donor stewardship plan.
As you lay out your program, think ahead to donor stewardship. Maintaining and growing your relationships with these dedicated supporters should be a priority.
Remember that most legacy gifts are revocable. A donor can remove a bequest for your nonprofit from their will for whatever reason and never notify you. By staying in touch, you keep your mission on their minds.
Effective donor stewardship has its own array of best practices. If you already have stewardship processes in place for your other giving programs, fold legacy donor stewardship into them. If you’re starting from scratch or looking to revamp your overall approach, try creating a comprehensive stewardship matrix—a chart that outlines the types of outreach that different donors will receive and when.
Explore our guide to creating a donor stewardship plan to access more recommendations and this template stewardship matrix.
9. Start a legacy society for your nonprofit.
To take your stewardship efforts to the next level, create a dedicated membership for your legacy donors. A legacy society can be an extremely effective way to foster continued engagement over time and stay in frequent contact with your most dedicated supporters. Offer your legacy society members special recognition and perks like:
- Free merchandise
- Exclusive events, like luncheons and other outings
- Special placements on donor recognition walls and installations
- Personal notes of gratitude from leaders and constituents
- Unique resources tailored to their interests
Consider what you know about your legacy donors and how that might intersect with your mission to discover unique engagement opportunities. Legacy donors are proactive about their estate planning—perhaps an estate or financial planning seminar from a local expert would interest them. If you’re an animal welfare organization and many legacy donors own pets, pet-themed events, dog walking days, or naming contests might be easy perks.
Maintain your legacy society over time and use it to help promote your program. Remember to regularly survey your society members, as well, to learn more about what’s working well and any new ideas they may have for your program.
10. Study your performance and improve over time.
As your legacy giving program moves forward, take care to track your data and progress. Analyze it over time to find trends, and use these insights to refine your donor segments and outreach strategies based on what’s worked well previously. Revisit your program’s goals and make adjustments as a sharper picture of your strategy’s effectiveness comes into focus.
Then, keep it all running with ongoing data and feedback collection. You’ll have a fledgling legacy giving program ready to grow as you learn more and improve.
What holds nonprofits back from succeeding with legacy gifts?
As you prepare to start or update your nonprofit’s legacy giving program, you might have a few concerns. Many organizations hold off on investing in their planned giving efforts because of several common fears and assumptions. Thankfully, they’re all addressable. Let’s take a look:
Fear: I don’t know how to talk about legacy giving and feel that it will be off-putting to donors.
How to Address It: Legacy giving is certainly a sensitive topic, but that doesn’t mean it can’t be discussed. It just needs to be approached thoughtfully. Creating a legacy with a cause that’s meaningful to them can be a powerful motivator for many donors. The practical benefits of planned giving—both for donors and for your nonprofit—make a compelling case, as well. It’s possible to learn how to talk about planned giving to have productive conversations tailored to each individual’s unique motivations.
Fear: My donors aren’t interested in legacy giving or are unfamiliar with it.
How to Address It: You won’t know who’s interested in the flexibility and meaningfulness of legacy giving unless you ask. A quick survey to gauge interest will give you real insights to work with. And yes, many donors are unfamiliar with planned giving, but that simply means educating them about their options is part of your job—make it a key priority of your promotional strategy.
Fear: I don’t have enough major or mid-level donors to sustain a dedicated legacy giving program.
How to Address It: Legacy giving is accessible to large audiences, not just your wealthier donors. Although these donors may be more interested in the financial planning benefits of these gifts, that’s far from the only reason people choose to give. Anyone can create a bequest, and everyone should create a will. Among your donor base, you likely have many lifelong savers who have never been able to or considered making a large gift of cash. With legacy giving, they might be able to give the equivalent of a mid-size or major gift through saved assets.
Why legacy giving should be a priority
Legacy giving (and non-cash giving in general, such as gifts of stock and DAF grants) is growing in relevance and popularity with today’s donors. Demographic shifts will continue to drive powerful trends for nonprofits ready to tap into them. Take another look at the statistics cited above and consider what they might mean for your organization.
If you’re not showing donors the benefits of legacy giving and encouraging them to take action, other organizations are.
FreeWill can help your nonprofit hit the ground running and build a legacy giving program that continuously improves. Our free bequest tool provides an easy way to streamline the planned giving process for donors, and our complete set of legacy giving tools can equip your team with the resources and systems to thrive in the long run.
For a firsthand look, request a demo—we’ll be happy to show you how our tools can help your nonprofit.
In the meantime, we encourage you to keep learning. Legacy giving can help sustain and grow your work for years to come, but it all starts with understanding the field. Explore our library of resources or jump straight into one of these recommended articles:
- 8 types of planned gifts your nonprofit should know
- What are charitable bequests for nonprofits?
- The benefits of planned giving for nonprofits and donors
- Planned giving for churches: How to build legacy & community
- Make-A-Will Month: 3 effective marketing tips for planned giving
- Amplify your marketing strategy with Planned Giving Websites