Failure to Adapt to Major Societal Changes Could Cause Big Trouble, Fund Raisers Told

Big changes sweeping across society and the financial world mean fund raisers need to overhaul their approaches to seeking planned gifts or risk major losses in donations, said two speakers at the annual meeting of the National Committee on Planned Giving here.

Jeffrey W. Comfort, senior director of planned giving at Georgetown University, in Washington, and Cynthia Wilson Krause, president of the consulting firm Wilson & Krause, in Dallas, interviewed 30 fund raisers who specialize in planned giving to get their thoughts about forces of change in their industry.

In presenting their findings, Mr. Comfort and Ms. Krause warned that if fund raisers are unable to adapt to these changes, they are in danger of falling behind.

“This is not a dress rehearsal,” Mr. Comfort says. “This is a crisis point, and a crisis is a terrible thing to waste.”

The first trend affecting fund raisers, said the speakers, is the evolution of what they call the “self-directed consumer.” Before the Internet became widely used, people who were thinking about setting up a gift annuity or charitable trust relied almost entirely on the advice of a fund raiser. But the Internet and other forces have made information about these tools much more accessible to potential donors.

As a result, today’s donors typically conduct considerable research before they are ever approached by charity fund raisers.

Mr. Comfort says planned giving isn’t the only field that has seen this change. Car buyers, for example, are likely to have conducted research on the reliability, options, and prices of vehicles before they go to a car dealer in person. As a result, they show up with more information — and more-pointed questions. The car dealer no longer controls the information, and customers are more knowledgeable and can demand more when they have conducted their research ahead of time.

The Internet is also pushing fund raisers to change the way they communicate with potential donors. To illustrate the point, Mr. Comfort spoke of a printed newsletter his university sent to about 10,000 supporters.

The newsletter drew only five responses — a sign to Mr. Comfort that it was time to scrap postal mailings in favor of mass e-mail messages and interactive Web sites. “Things have changed in the way consumers are looking for information,” he says.

Wealth Advisers

The second trend facing fund raisers is the emergence of for-profit companies that offer wealthy clients advice on their charitable options. In the past, banks and other financial institutions tended to avoid offering services that were not directly related to their business of lending, saving, or investing.

Today, however, those same institutions are becoming a one- stop shop for wealthy customers — particularly those with $5-million or more in assets, Ms. Krause says.

“At that point, there is a team around each individual,” she says, pointing to the phalanx of investment-strategy advisers, financial planners, and lawyers that help well-heeled clients of financial-services companies.

That team offers advice on a consumer’s philanthropic decisions — and team members typically don’t invite those in the nonprofit world to join the discussion.

“We need to be at the table to talk about our mission and what the gift will accomplish,” Mr. Comfort says. “They don’t know our mission and goals like we do. We need to be at the table.”

The third major force affecting planned giving is the fear of terrorist attacks, which has created uncertainties among many potential donors. Those uncertainties are prompting some donors to put gift commitments on hold, Ms. Krause says.

Finally, fund raisers face a marketplace in which a greater concentration of wealth is being held by a significantly smaller proportion of the population.

While fund raisers have long been looking forward to a boom in giving caused by the transfer of wealth from baby boomers to their heirs, Mr. Comfort said, too few people have focused on the fact that only a small slice of that population can be considered wealthy.

Only about 2 percent of the nation’s households have estates worth more than $782,000, he said, so fund raisers need to focus on wooing bequests and other planned gifts from this small but influential group of potential donors.