Charitable giving through planned giving instruments, such as legacies, charitable gift annuities, and life insurance determinations, has become an increasingly vital source of income for nonprofit organizations. As donors seek to maximize their charitable impact while minimizing their tax burden, charities require sophisticated strategies to cultivate and nurture these planned gifts. Enter the Planned Giving Advisory Council – a powerful tool for the charity that leverages the expertise and influence of outside professionals to strengthen a charity's planned giving program.

The role of a PGAC

A PGAC plays a key role in identifying and engaging potential planned donors. Its members use their professional networks to connect with individuals who may have a genuine interest in supporting the nonprofit's mission through planned gifts. Their expertise instills confidence in potential donors, assuring them that their philanthropic goals will be met with care and precision.

A PGAC also excels at nurturing donor relations and building relationships, providing personalized attention and expertise to donors who have expressed interest in planned giving. Council members understand the importance of recognizing the generosity of donors and ensuring that their contributions are recognized and celebrated.

Who is on a PGAC?

A well-joined PGAC is characterized by a diversity of expertise among its members. With their knowledge of estate planning and charitable gift arrangements, private client attorneys play a key role in ensuring that all planned gifts adhere to legal requirements and regulations. They provide guidance on the nuances of bequests, charitable remainder trusts and other planned giving vehicles, giving donors peace of mind that their philanthropic intentions will be honored.

Financial advisors bring a wealth of knowledge about investment strategies, tax implications and financial planning. Their insights help donors optimize the financial aspects of their planned gifts, maximizing benefits for both the donor and the nonprofit. By understanding the potential tax advantages and investment considerations, donors can make more informed decisions about their planned giving strategies.

Estate planners complement the council's expertise, providing a thorough understanding of the entire planning process. They guide donors through the intricacies of creating a comprehensive estate plan that aligns with their philanthropic goals. This may include determining the distribution of assets, taking into account family dynamics and addressing any potential challenges that may arise in implementing the planned gift.

Formation of a PGAC

Establishing a PGAC can be a transformative step for a nonprofit organization, enhancing its planned giving program and strengthening its financial sustainability. Below are the main steps to consider when forming a PGAC:

1. Assess your organization's needs and goals. Before forming a PGAC, it is essential to identify the specific needs and goals of your nonprofit. Determine what you intend to achieve with your planned giving program and how a council can contribute to those objectives. Consider factors such as financial stability, donor engagement, and developing a diverse range of planned giving options.
2. Identify potential council members. Leverage senior staff in the organization by appointing a major gifts officer or by planning giving a specialist role to lead the council. Your board should consist of individuals with expertise in relevant fields such as law, finance, estate planning and philanthropy. Ideally, your PGAC members should share a passion for your organization's mission. Look within your existing pool of donors, professional networks, and connections to identify potential board members who can bring valuable knowledge and networks to the table.
3. Define roles and responsibilities. Clearly describe the roles and responsibilities of PGAC members. Determine how often the council will meet, what its main objectives are, and how members will collaborate with your nonprofit's staff. Designate specific roles, such as chair or secretary, to ensure the council functions effectively.
4. Draft a PGAC charter. Create a charter or official document that outlines the purpose, structure and governance of the PGAC. Include details about membership criteria, length of term, frequency of meetings and decision-making processes. A well-structured charter will serve as a reference point for board members and clarify their roles.
5. Recruit and onboard council members. Invite individuals to join after you have identified potential members and determined the structure of the council. Hold orientation sessions to familiarize them with your organization's mission, values, and planned giving program. Emphasize the importance of their role in advancing the nonprofit's goals.
6. Create communication channels. Establish effective communication channels between PGAC and your nonprofit's staff. Regular meetings, email updates, and collaborative platforms can facilitate information sharing and ensure both parties are aligned in their efforts.
7. Develop educational programs. Collaborate with council members to develop educational programs that benefit both the nonprofit and the council members themselves. These programs may include workshops, seminars, or webinars on topics related to planned giving, tax law changes, or estate planning strategies. Ensure that these programs provide opportunities for council members to earn continuing education credits (for financial advisors), CPA credits (for accountants), and CLE credits (for attorneys).
8. Engage in strategic planning. Work with PGAC to develop a strategic plan for your planned giving program. Define measurable goals, strategy and a timeline for implementation. Regularly review and update the plan to adapt to changing circumstances and opportunities.
9. Celebrate success and recognize contributions. Recognize the contributions of PGAC members and celebrate the achievements of your planned giving program. Recognize their efforts through awards, public recognition or appreciation events. A culture of appreciation can foster long-term engagement among board members.
10. Evaluate and adjust. Periodically evaluate the performance of the PGAC and your planned giving program as a whole. Solicit feedback from council members about their experiences and knowledge. Use this feedback to make adjustments and improvements as needed to continually improve the effectiveness of your PGAC.

Building a lasting legacy

For nonprofits looking to establish or improve their planned giving programs, forming a well-structured advisory board is not only a prudent choice; it is an essential step towards building a lasting legacy. By leveraging the diverse expertise and passion of board members, nonprofits can ensure the future financial health of their organizations and continue to pursue their vital missions.

*This article is an abridged summary of “The Strategic Value of a Planned Giving Advisory Council in Nonprofit Successwhich appears in the October 2024 issue of Trusts & Estates.