All About Estates

One in Ten: Why Bequest Donors Don’t Inform Charities

One in ten.  That, according to charitable sector studies, is how many estate donors inform the charities in their will of their intentions.  While this ratio varies by charity it underscores a fascinating paradox.  Bequest donors trust charities enough to make them beneficiaries of their estate, but they don’t trust them enough to tell them in advance.

The Paradox

This paradox is frustrating for charities.  Charities spend a lot of time and resources cultivating donors to make gifts by will.

A primary goal for charities with gift planning programs is to identify existing bequest donors. As a result, donors are bombarded with questions about their estate plans and coaxed to reveal their intentions through donor recognition programs. Donors that do disclose often derive great personal satisfaction from being involved with their charities.  Yet the majority remain silent. Why?

If you think about it, this paradox is understandable.  Most parents also don’t show their wills in advance to their kids. There is a cultural reticence about revealing estate plans and dollar values during life.

Five Reasons

Donors to charities have additional reasons.  I can think of five prominent ones.

  1. Fear of fundraising.  Donors associate charities with fundraising calls, letters and other solicitations, which can at times seem intrusive.  As a result, they fear that informing a charity about a bequest will generate additional fundraising requests.
  2. Flexibility.  Donors want flexibility.  Without a sense of obligation or guilt, they want to be able to change their mind about estate beneficiaries.
  3. Liability.  Some donors are concerned that informing charities could lead to a legal obligation to make a gift. This is an unfounded fear, but there is suspicion that a bequest confirmation is an irrevocable pledge.
  4. Privacy.  Donors worry about how their personal information will be managed by charities.  For example, how will information be stored and who will have access?
  5. Personal philanthropy.  Estate donors typically give due to a  deep connection with a cause or charity. Their decisions are private.  Moreover, most give without being asked.  Personal donors give for intrinsic reasons and generally don’t look for external validation.

Given these factors I suspect the candour of estate donors will continue to lag their actual giving.  Without a doubt, charities should continue to build trust and encourage disclosure of estate plans.  Not every estate donor is willing to share this very personal information.

About Malcolm Burrows
Malcolm is a philanthropic advisor with 30 years of experience. He is head, philanthropic advisory services at Scotia Wealth Management and founder of Aqueduct Foundation. Views are his own. malcolm.burrows@scotiawealth.com

6 Comments

    • Malcolm Burrows

      March 18, 2021 - 1:44 pm
      Reply

      Thank you Gosha. Pleased that the blog was helpful. Malcolm

  1. Don Shaughnessy

    March 18, 2021 - 2:54 pm
    Reply

    Do you have experience where the client wants to donate to a local institution, in this case a church, but fears the donation could be taken by the upstream organization in the event of financial need, or if the local church is closed? I had the same experience with a potential donation to a hospital foundation that was “tainted” by have had hospital surpluses transferred to it in the past.

    • Malcolm Burrows

      March 18, 2021 - 3:01 pm
      Reply

      Hi Don – Thanks for your note. Yes, I’ve had experience with different charities and internal policy that can determine the use of unrestricted bequests. It’s important for donors to ask questions upfront about internal policies. I’ll send you a note offline to discuss. Malcolm

  2. Jen

    March 18, 2021 - 7:14 pm
    Reply

    Great piece, Malcolm, thanks. Often there is so much pressure on gift planning fundraisers to report that the hard-won relationship is put at risk. It’s difficult to insist on respecting a donor’s privacy when that reticence to share is seen as a shortcoming in the “sales” abilities of the gift planning professional at a charity.

    • Malcolm Burrows

      March 18, 2021 - 8:01 pm
      Reply

      Jen – Thank for your note and additional nuance on the topic. There is a cultural gap in fundraising around donor recognition. Generally, estate donors with intrinsic motivations want to remain anonymous, unlike lifetime major donors or corporations who generally value recognition. Keep doing your good work, Malcolm

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