Charitable sector data has consistently shown that only about one in ten bequest donors inform the charities during their lifetime that they have been named beneficiaries. While this ratio varies from charity to charity, it underscores a fascinating paradox. Bequest donors trust charities enough to make them often significant beneficiaries of their estate, yet they don’t trust them sufficiently to tell them in advance.
To charities this paradox is frustrating. Charities spend a lot of time and resources cultivating donors to make gifts by will. In fact, the key objective of most gift planning program is to identify existing bequest donors, as well as to solicit new ones. Hence, donors are bombarded with questions about their estate plans and coaxed to reveal their intentions through donor recognition programs. The donors that do declare often find being involved with the life of the charity to be a source of great personal satisfaction, but the majority remain silent. Why?
If you think about it, there is nothing surprising about this paradox. Many parents don’t show their kids the will in advance either. There is a natural cultural reticence about revealing estate plans and value in advance. However, donors to charities have additional reasons. I can think of five prominent ones.
1. Fear of fundraising. Donors associate charities with fundraising calls and letters, which can at times seem intrusive. They fear that informing a charity about a bequest will generate additional fundraising requests.
2. Flexibility. Donors want to be able to change their mind about beneficiaries without a sense of obligation or guilt.
3. Liability. Some donors are even concerned that informing charities could lead to a legal obligation to make a gift. This is an unfounded fear, but reflects the belief that a bequest confirmation is a pledge that may be irrevocable.
4. Privacy. Donors worry about how their personal information will be managed within a charity. Where will information be stored and who will have access?
5. Personal philanthropy. Bequest donors typically give out of a deep sense of connection with the cause or the charity. Their gifts are shaped by values and the decisions are made in private. Most give without being asked. Personal donors give for intrinsic reasons and don’t generally look for external validation.
Given these factors I suspect it will be a while before the candour of bequest donors matches their impressive charitable commitment.