Three Steps to Creating a Successful Planned Giving Budget

Three Steps to Creating a Successful Planned Giving Budget

Do you know how to demonstrate your legacy gift potential? Can you explain the ROI on your planned giving budget? Don’t let another year go by without a good plan! Give your board or director a budget they can’t refuse.  

A good budget will allow you to go back to leadership and say, “Here’s what I did all year. And here are the results: we have this many new people in our pipeline.” You can show the value of your work. 

Here are three important steps toward making your planned giving budget work for you: 

1. Calculate your ROI. How much are you spending, and how much are you making in return?  

  • Figure out how much you spend directly on planned giving, including things like staff time, mailing costs, events budgets, and websites.  
  • Then add up how many known legacy gifts you have in the pipeline. Average legacy gift size is usually around $50,000-80,000, so multiply reported legacy gifts by $50,000. 
  • This calculation will help you measure the success of your program by telling you the number of dollars you expect as a result of the number of dollars spent. 

2. Learn the legacy potential of your organization. This may sound nebulous, but there is a formula for it. 

  • If an organization has a healthy legacy giving program in place, around 3.5-5% of its active donors have the capacity to become legacy donors. So if you have 5,000 active donors, 4% of that would be a capacity of 200 legacy donors. 
  • Using the average gift amount of $50,000, and your capacity of 200 legacy donors, your organization would have a legacy goal of $10 million.  
  • How closely does your known pipeline match your potential? 

3. Set good goals. A good goal will take into account both short-term and long-term metrics, with measurable benchmarks. Here are a few examples: 

  • I want to grow my reported legacy gift pipeline by X%. 
  • I want to add $X of legacy dollars to our organization’s pipeline by 2030. 
  • I want planned giving revenue to account for X% of our annual revenue. 
  • I want to convert X number of monthly sustainers to legacy givers. 

Get the financial resources you need to do your work well, and show your leadership team a budget they can’t refuse! If you would like to learn more about your legacy potential and how you can reach it, we can help.