Are You Asking for Asset Gifts?

 

Most fundraisers can probably count on their hands the number of $10,000 plus cash gifts they raise annually -- with fingers to spare. Should this tell us something? Are we working harder not smarter?

As this year sunsets, some fundraisers are wondering if they will reach their goals. Why would acquiring asset gifts put you on the fast track to reaching or exceeding your annual goal? Because each asset gift on average tends to be more valuable than each cash gift. 

At one organization I worked for, we took a look at each donor who had given us stock. We compared the size of their stock gift to the size of their previous cash gifts. The difference in the higher value of the stock gift as compared to their average cash gift was staggering. Like Mount Everest next to an anthill? Well, you get the point.

Typically, your affluent donors own more than half of their asset holdings in a non-cash form; cash only represents 3-5% of their holdings. 

Looking at non-cash assets another way, the aggregate value of the stock market is approximately $13 trillion. Because stocks and mutual funds are readily marketable, they are considered cash equivalents. However the non-cash market’s estimated value is between $40 -- $60 trillion.[1]

Successful fundraisers may argue that their particular approach to donors is reliably productive. It’s probably true that many of them hit their goals without receiving a single asset gift -- including gifts of publicly-traded securities. In turn, they are rewarded with raises and promotions by their charitable organizations.

Is there anything wrong with this picture? 

Of the $300 billion in donations given in 2009, non-cash assets were estimated to be 3% or less! This tells me most fundraisers are leaving the most valuable gift opportunities on the table. 

What else might these numbers tell us? 

1. Most fundraisers are charity-centric. If they were donor-centric, they would relentlessly ask, “Have you thought of any other way to give?”

2. Most affluent donors pay unnecessary capital gains taxes, because they first sell off appreciated assets and then donate the cash proceeds. If they gave the assets instead, their tax benefits would double and their discretionary income would increase too.

3. Isn’t it the wealthy people, who can afford the most expensive financial advisors, who are still getting poor charitable giving advice?

Fundraisers, you have no substitute. Statistically speaking, you are either the donor’s philanthropy coach or no one is, unless it is your counterpart from another charity.   

While we are on the subject of asset gifts, let’s pivot to a different way of seeing our donors. Do all major gifts come from people we would typically say are major (or wealthy) donors?

I once received a very valuable gift of bling-bling, in the form of a diamond studded tennis bracelet crafted by Tiffany’s. The donor was a retired elementary school teacher, who had been giving our charity $30 each month for over a decade. She received the bracelet as an inheritance from her mother and for several years it had been stored out of sight in the attic. When we invited her to consider a list other ways of giving that included jewelry, she responded. And the value of that jewelry eclipsed the entire value of her previous cash gifts by a ginormous amount. She was overjoyed about having a once in a lifetime ability to create a major gift. Who would want to get in the way of that?    

Don’t you think every fundraiser has at least one donor in their portfolio who can and probably should give an asset gift? Our task is to simply ask our donor if they have ever considered another way of giving and then give them examples of what other donors have given. If the donor responds with interest and wants to learn more, you know how to reach the gift planning experts… if you’re not already one yourself.

Honestly, asset gifts have made all the difference in my goal fulfillment for decades. If you are waiting for your first or next 6 or 7 figure plus gift and you have never helped a donor make an asset gift, there may be a link.

By: Dan Rice, Co-founder of CTAC

Back to the December 2011 eNewsletter.


[1]Spectrum Group and Realty Times, June 2004.