Charities Seeking Bequests Should Court Younger Donors, Study Finds

Many charities could increase the amount of money they get from bequests by expanding their appeals to people in their 40s and 50s, rather than relying on solicitations to people 65 or older, a new study has found.

The analysis found that individuals aged 40 to 60 were more likely than older Americans to have named a charity in their wills, but they are also more than twice as likely as older people to say they would consider making a bequest: More than 30 percent of Americans aged 40 to 60 told researchers they would consider a bequest. By comparison, just 15 percent or less of people in their 70s, 80s, and 90s said they would consider such a gift.

The report was commissioned by Campbell & Company, a Chicago fund-raising consulting firm, and conducted by researchers at the Indiana University Center on Philanthropy.

“A high percentage of respondents under 60 years of age, especially those 50 to 60, are potentially good prospects,” the researchers wrote. “Efforts now to engage those people as bequest donors will likely be the most effective way of increasing the number of bequests made to charity in the next 30 years.”

The findings are based on data from three regional surveys of contributions made by more than 2,000 people at all income levels. Among other findings from the analysis:

• People who had named charities as beneficiaries in their wills gave more than twice as much annually, on average, to nonprofit groups ($4,490), compared with those who had not made a bequest ($2,043). And people who said they would consider a charitable bequest gave more ($2,526) than those who would not consider such a gift ($2,004).
• Individuals at every income level have either put charities into their wills or would consider making charitable bequests. Twenty-eight percent of people who make $25,000 a year or less said that they would consider a bequest and 7 percent had put a charity in their will. Among those making more than $100,000 annually, 36 percent would consider naming charities to benefit from their wills, and 10 percent had actually done so.
• Thirty-five percent of people with charitable provisions in their wills hold at least one graduate degree.

Charities can gain financial benefits beyond the bequest itself from courting younger donors. Once people have decided to put a charity in their will, their commitment to the cause is stronger and they give more during their lifetimes, some fund raisers say.

“Being named in a donor’s will,” wrote the Indiana University researchers, “is a great way to build lifetime commitment to an organization.”

But some experts cautioned charities to take the researchers’ recommendations with a grain of salt. “The premise is that by marketing bequests to 40-to-60-year-olds, you will increase bequest income — but not for another 30 or 40 years,” said Robert F. Sharpe, a Memphis planned-giving consultant. “There’s nothing wrong with trying to influence people in their 40s or 50s to make bequests,” he said, but charities should focus the bulk of their bequest-seeking efforts on donors in their 70s, because people tend to draw up their final wills between the ages of 75 and 80.

Some charities such as the Memorial Sloan-Kettering Institute, he added, receive income from bequests worth $30-million or more every year by focusing almost exclusively on donors 70 or older.

A free copy of the full analysis, “Bequest Donors: Demographics and Motivations of Potential and Actual Donors,” may be obtained from Campbell & Company by sending an e-mail message to study@campbellcompany.com or by calling (877) 957-0000.