In a webinar last month titled "Positioning for Wealth Transfer," Campbell & Co. Vice President Bruce Matthews talked about the need for organizations to prepare programs that take full advantage of this boon.
Last week, in Part 1 of this two-part series covering the presentation, we outlined Matthews' advice for creating a planned-giving program. Here, in Part 2, we lay out his thoughts on creating a bequest program.
Bequests, Matthews said, "will be the main vehicle by which individuals will transfer wealth to the next generation." Yet, according to data from the Partnership for Philanthropic Planning, only 50 percent of Americans have wills, and only 16 percent of that total have charitable beneficiaries. What's more, 68 percent of bequest donors have not notified the nonprofit beneficiaries of their gifts.
Citing information from the Center on Philanthropy at Indiana University, Matthews said individuals most likely to name a charity in their wills are between the ages of 40 and 60 — much younger than typically thought by most organizations.
"What that means is that if you wait until someone's 70 to ask them to put you in their will, it's probably too late," Matthews said.
Some other information Matthews shared to help organizations pick out good planned-giving prospects includes:
- Individuals with bachelor's degrees have the highest likelihood to name a charity in their wills; household income is not a factor. The primary motivation is a combined desired to do good and to fulfill others’ expectations (Center on Philanthropy at Indiana University);
- Final wills usually are done on average at 80 years of age, with the average lag time between the final will and death being five years (The Sharpe Group);
- Only 9.5 percent of individuals over the age of 50 that were giving more than $500 a year to charity had charitable estate plans, and only 10 percent to 12 percent of donors will die with charitable estate plans (AFP Research Council/Legacy Leaders). "So the majority of bequests that flow to our organizations, we don't know about ahead of time," Matthews said; and
- The most dominant predictor of charitable estate planning is the absence of children (AFP Research Council/ Legacy Leaders).
Matthews also cited " Three Americas: The Rising Significance of Regions," a paper by sociologist and demographer
William Frey that notes three national trends that will greatly affect the future of planned giving:
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