Big Data on Planned Giving

December 13, 2019 Patrick Schmitt

For years, fundraising professionals have heard that we’re on the precipice of a demographic trend called “the great wealth transfer.” As Baby Boomers age over the next two decades, they will pass on more than $30 trillion to the next generation. This is the biggest wealth transfer in human history and may be one of the largest moments for philanthropy ever.

Since 2017, FreeWill has helped over 85,000 people pledge more than $920 million to nonprofits. The pledges have been enabled by our free estate planning tool, which nudges people to think about charitable giving while making a will (or guides them through the process with a lawyer).

In working with hundreds of nonprofits, we routinely encounter the same problem: while annual giving has become a data-driven science, quantitative data and insights around planned giving is extremely scarce, even for the most sophisticated organizations.

In order to create a much deeper sector-wide understanding of who is giving, we’ve analyzed the trends from the first 50,000 estate plans made on the platform, accounting for more than half a billion dollars being pledged to various nonprofits.

In the report, we cross-referenced will-writing and bequesting rates against key factors like age, gender, marital and parental status, geography, and a few other unusual factors (like pet ownership).

The results confirm a few long-held assumptions (yes, older wealthy people without immediate family are generally the most charitable in their wills), but also reveal some exciting and surprising trends about who gives and how generously. Here are a few favorites:

  • Men are less likely to write a will, but those who do write wills are more likely to include a charitable bequest — and those bequests are more valuable. Men wrote only 45% of the wills on our platform, but they represented nearly 60% of the total bequest value.
  • The most generous state in the union…is not a state. On average, Washington, D.C. residents included bequests in their wills at nearly twice the rate of any other state in the country. Even when we compared them to other urban areas such as the five boroughs in New York, DC was well ahead.
  • Animal lovers are WAY more generous. Pet owners made up less than 25% of FreeWill’s users, but they were 70% more likely to include a charitable bequest in their wills, and, on average, those bequests were of a greater monetary value, too.

 

Using the Data

The next step is putting this data into action to help your nonprofit secure more bequests. Some core principles behind the organizations who successfully leveraged these insights to attract new donors are:

  • Take a broad approach. People think about making wills at key points in their lives. Whilst they are especially likely to make a will in their 60s, there are other critical inflection points such as having a child and getting married so don’t restrict asks simply to older people.  Save the Redwoods League in California netted over $850,000 in bequests by targeting people from a broad range of ages (40s to 90s) and pointing out the importance of will making.
  • Keep talking about estate planning. Making a will is the sort of task people can put off – it’s not always easy to think about dying. But reminding people of the impact they can have through different channels makes a difference. The United Way of New York City significantly increased mentions of planned giving and how easy it is to make a plan in their communications, helping them secure nearly half a million dollars.
  • Use it to deepen a relationship. A bequest is the largest gift many people will give – a one time chance to use their assets for good. The Cleveland Museum created a society with annual events to illustrate the impact of their work. this is creating buzz and encouraging people to give at other times and talk to their friends about making bequests.

 

To find out more insights and how to use them, download the report.

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