Ken Ramsay is one of the most experienced planned giving professionals in North America. The Planned Giving Pulse asked Ken about his views on the future of the planned giving industry over the next decade. Here’s what he said:

Planned Giving Pulse (PGP) - What do you predict will be the trends in the planned giving industry over the next decade?

Exponential Growth in the Planned Giving Industry

Ken Ramsay (KR) - The trends are well-established. I look at statistics a lot. I just looked at the bequest revenue in Canada and U.S. combined, $22 billion dollars combined - that’s 8-9% of the industry fundraising revenue. That has been growing over the past 10 years at a 10% annual rate. The proportion of bequest revenue as a proportion of overall fundraising revenue keeps going up. We have a very well-established trend statistically. There is every reason to believe this is going to continue. Why? The transfer of wealth that is happening.

In Planned Giving Today, Gene Christian, Charitable Estate Planning Northwest writes that we are just looking at “the Tip of the Iceberg.” He is looking at some of these global trends such as the aging population and the transfer of wealth. He presents some research to support this. Christian makes the same kind of prediction that undeniably it is a growing business. You have to hold it up against other types of fundraising. It is the area of fundraising that gets the least resources. We have this strange phenomenon in an area that is traditionally under resourced. In Giving USA, it is cited that U.S. universities receive 25% of their fundraising revenue from bequests. This is very weighty, yet they don’t actually go after these gifts; it is almost by default they get this revenue. I believe the stars are aligned a certain way. As other types of fundraising revenue are more difficult to get, and you look at other types of fundraising revenue it is more or less flat. It hasn’t really grown. The only sector that is growing hasn’t really tried; it is inevitable that organizations are going to put more resources into planned giving.

PGP – What other trends do you anticipate?

Growth of the Charitable Sector

KR - Another factor that is mentioned in the article is that in the next 15 years the number of non-profits in America will double. If you think it is hard to raise money now, wait until you have twice the number of charities going after the same money. The only growth area left is gifts of assets. Historical research shows that about 1/3 of the population will make a gift of assets to charities. Eight to 12% have already put a charity in the will; so there is room for dramatic potential growth. When you put all these factors together, you get more charities fighting for static funding resources; when you have an aging population, a significant transfer of wealth inter-generationally; when you add all of those things up there is no way you won’t have growth. Charities need to get serious about it.

It amazes me that charities have not built business plans to address this. NCPG issued new guidelines last year on counting gifts. One of the recommendations was that in every fundraising campaign, revocable gifts should be counted and reported separately. That was a bold step. How many have accepted that? Not a lot, however, the University of Regina now has a separate bequest capital campaign target. There will be a shift of larger organizations being much more decided in proactively soliciting gifts of assets, notably bequests.

Back to Basics: Relationships vs. Technical Expertise

Bequests are 90% of planned gifts. We spend almost no resources chasing the gifts that are 90% of the market (bequests), because they are not counted. As more and more pressure is put on organizations to be more productive in fundraising they absolutely have to look at planned giving in general and bequests, specifically. If we can get over the hurdle of how we count these, there will be a Renaissance in gift planning. Gift planners will actually become fundraisers who focus on relationship building. In some ways the profession has been sort of hijacked by the technocrats. This is much more pronounced in the U.S. In the U.S. we have become much more narrow in defining the business. That will change.

The other impact will be on how we do our business. We have demonstrated clearly now that the way to build a sound business is through relationship management. The winners are going to be the ones that invest in this; the losers are the ones that pay lip service and don’t do it. Planned giving will thrive with good relationship management. Those organizations that invest in it will thrive, those that do not, won’t. Everything I’ve read, seen or heard tells me that that is so. Some organizations need to start investing in it and start doing it. Some large charities that are marketing driven invest almost nothing in relationship building. It shows dramatically. If an organization has invested in the relationship there is a willingness to support the organization through a planned gift; if they haven’t there is a great unwillingness. That’s why universities have a built in edge; they have alumni relationships. If you look at polls of planned gift propensity universities are always at the top of the list.

More Regulation

Another trend worth mentioning is a process in Canada to make the profession of the gift planner an accredited profession. The profession will keep moving towards more self-regulation. There is the possibility that the profession will be formalized. I’m a little concerned if we don’t do that that there will be more liability; if we don’t take the initiative ourselves to regulate our industry; someone else will regulate it for us. It’s going to happen in Canada before the U.S. this time. Long term this will be inevitable; how we get there is still to be decided. It is centralized in Canada and the political will to implement it. CAGP did a poll and there was support for it to go ahead. The growing trend is the need for regulation; whether it is self-regulation or regulated other ways is yet to be determined. If our industry is smart we will self-regulate. This will cover educational requirements, ethical issues etc. This is forced by the increased complexity of our business and our society.

Pressure for Increased Productivity

We are going to become better fundraisers. There is increased pressure on productivity. The same things that have hit the profit sector are hitting the not-for-profit sector: accountability, transparency, are starting to be demanded of non-profits Not by law yet, but in spirit – by Boards and so on. In accounting software for non-profits they are building in proper accounting standards to make our business more open to donors, to authorities, to ourselves. The same standards that are being demanded of publicly traded companies are being demanded of non-profits. When you see trust polls, charities always assumed greater trust factors; those trust factors have been shrinking. Even though charities do charitable work they will be looked at skeptically by the public. There will be increasing pressure from all sides to be more productive; more clear about what you do with a dollar. Charitable organizations have to think ahead in this area. That will force a new kind of productivity. I think it will help planned giving; it is traditionally the most productive type of fundraising (along with major gift fundraising). If you hold up planned giving opposite special events fundraising and you audited the two, if you honestly did it you would never run a special event again for fundraising purposes. That kind of hard look at our business will force organizations to divert resources to more productive resources. Planned giving is the overall most productive. That will speak well for the growth of planned giving.

A More Strategic Approach

A lot of this requires long term thinking. It amazes me how multi-million dollar organizations can operate only one year at a time. They work on this one year at a time cycle. The more successful organizations will begin to work on five year plans.

PGP - Is the market potential there?

KR - Legacy Leaders can take 100 donors and find 10 that will put you in the will for $30k. That’s $3 million! I’m very positive about this business and confident that other decision makers will start thinking the same way. Why wouldn’t you?

About Ken Ramsay: Ken Ramsay joined Legacy Leaders in 1996 as President and CEO. Prior to Legacy, Ken spent seven years as the Special Gifts Officer of the United Church of Canada, responsible for the Planned Giving and Direct Mail programs.