Planned gifts are among the most important ways charitable organizations raise funds. These gifts can comprise up to 30-50% of a nonprofit’s annual revenue and offer one of the highest returns on investment (ROI) of all types of fundraising.
Despite their critical value, many organizations fail to tap into the full potential of planned gifts. This typically happens if a charity does not appreciate the long-term nature of planned giving and, therefore, doesn’t allow planned gift marketing efforts enough time to cultivate gifts.
According to WealthEngine, it takes 18-24 months from initial contact to securing a major gift. Planned giving takes much longer but yields big results.
An organization that only deems a marketing program successful upon securing a planned gift is less likely to place sufficient value on the time and energy involved in the procurement.
Do you face similar challenges? Convincing organizational leaders to invest in planned gift marketing can be tricky. If you are grappling with the best way to encourage your organization to devote manpower and money into marketing legacy gifts (or to continue investing in this type of outreach and marketing), calculating the return on investment for your planned giving program can provide important validation.
What is ROI?
Return on investment refers to the cost per dollar raised. In this discussion, the ROI calculation compares the marketing costs to the income raised, with the resulting number expressed as a percentage or ratio.
Determining ROI is invaluable to your organization. It can help your team obtain other planned gifts and use your planned giving budget more efficiently.
It can also be complicated. Planned giving can be inaccurately compared to annual giving or not tracked properly, and donors may (purposefully or unintentionally) fail to notify the organization when they make a future gift. In addition, thanks to the long-term nature of planned giving, it is often difficult to attribute a gift to a particular marketing effort. Instead, it is often the result of consistent educational and outreach efforts over time, with donors responding on their own timelines.
How to improve the measurement of ROI
Simplifying and improving your ROI measurements can have a significant impact. Consider the following tips:
• Set clear marketing goals and targets. To track and improve ROI, start by establishing specific marketing goals and objectives, whether that’s increasing website traffic, growing your subscriber list for newsletters or emails, or getting more people to reach out to the development office.
• Make your marketing program measurable. Successful planned giving marketing programs include intentional measurement strategies as an integral component. There are many ways to evaluate a planned giving program and determine which marketing efforts create the most engagement, including website tracking tools, engagement metrics, and conversion rates.
• Track conversions. A conversion is an important indicator of the success of your planned giving marketing efforts. Assign values to conversions such as phone calls, newsletter sign-ups, event registration, and other forms of engagement. This information will help you evaluate and direct your marketing efforts.
• Adopt segmentation. Planned giving donors vary greatly. To achieve the best results with planned giving marketing, it can be helpful to segment your donors based on their engagement levels or affiliation with your organization. Segmentation has proved to be highly effective, with marketers who use segmented campaigns seeing as much as a 760% increase in revenue, according to Hubspot.
• Utilize CRM systems. Integrate your Constituent Relationship Management (CRM) software with your planned giving marketing efforts. Use this information to evaluate how your segmented groups have responded to different marketing pieces. You can also track interactions and contributions from leads generated through your planned giving marketing.
• Incorporate donor surveys. Ask for notification of planned gifts and information that will help you determine the donor’s motivation and decision-making. This may uncover previously undisclosed gifts and may also provide insights into the effectiveness of various components of your marketing strategy.
• Evaluate and adjust. ROI for planned giving marketing operates on a long time horizon. Evaluation periods should also extend over a longer period, with regular assessments conducted throughout. Continually adjust your planned giving strategies based on your ROI calculations.
By intentionally assessing your planned giving ROI, your organization will be equipped to fund, create, evaluate, and adjust a robust planned giving program that will, over time, greatly benefit the mission and vitality of your organization.
