Over the past 20 years, an interesting trend has emerged among donors related to who they consult for philanthropic advice or options. It used to be pretty simple – donors were usually connected with a nonprofit’s Director of Development, Major Gift Officer, or even the Executive Director.
However, recent studies have shown a significant shift in this line of thinking. According to a 1994 study conducted by the National Committee on Philanthropic Giving (now called the Partnership for Philanthropic Planning), only 4% of donors received philanthropic advice from financial advisors such as CPA’s, attorneys, or financial planners. But by 2008 that number had risen to 28%.
Another study conducted by Bank of America found that nonprofit staff involvement dropped from 41% in 2006 to 29% in 2012. In fact, according to a University of Indiana study, the leading source of charitable advice predominately comes from financial professionals such as accountants (67.5%), attorneys (40.8%), and financial planners (38.8%). Nonprofit fundraisers were noted by just 24.1% of donors.
Clearly this growing trend cannot be ignored. So what should a charity do? How should you go about introducing the idea of gift planning to your donor base? Consider creating a Philanthropic Advisory Council (PAC)!
What is a Philanthropic Advisory Council?
A Philanthropic Advisory Council (PAC) is a team of volunteers who work in the financial services industry and who are connected to your organization as board members, community sponsors, and volunteers. They could be attorneys, accountants, financial planners, insurance professionals, bankers, investment bankers and even private or commercial foundation executives.
Studies have found that some 25-40% of most nonprofit supporters, executive board members, and donors are in this financial services category. They can be an invaluable resource to help you address this growing trend of donors seeking philanthropy advice from their advisors. And perhaps best of all, this is a “free” resource to your organization.
What can a PAC do for your organization?
PAC members can be a valuable resource for educating and engaging your organization’s “middle class millionaires – helping them discover their potential and “think different” about planned giving. These middle class millionaires need help in discovering their philanthropic potential. Use members of your PAC to offer information, education and workshops on the topics that are important to your donors:
- Estate Planning
- Health and Long-Term Care Insurance
- Retirement Income Planning
- Asset Protection
- Small Business Exit Planning Strategy (70% of business owners have no idea how they plan to transition from work to retirement!)
- Elder Law and Medical Planning
- Education on philanthropy tools such as Charitable Gift Annuities, Donor Advised Funds etc.
You also can leverage the expertise of your PAC members to provide:
- Gift Planning training to your executive board
- Assistance with creating or updating your Strategic Plan
- Leadership in helping to create or reinvigorate your organization’s Heritage or Legacy Society