Donor Segmentation for Planned Giving: 4 Data-Backed Tips

Planned giving offers significant growth potential, but targeted strategies are essential. Learn how effective segmentation and insights from the 2023 FreeWill Planned Giving Report can help your nonprofit achieve remarkable results, like Atlanta Habitat for Humanity’s $14 million success. Discover the keys to honing your planned giving approach.

As many nonprofits now recognize, planned giving represents a major opportunity for growth and sustainability in the coming years. 

For example, Atlanta Habitat for Humanity kicked off an inaugural planned giving push in 2023 for the affiliate’s 40th anniversary. With some savvy planned giving strategies, they secured more than $14 million from 80 individual commitments, double their initial goal. How can your nonprofit replicate these amazing results?

The answer is a focused, planned giving strategy.

Without a focused approach, nonprofits risk going too broadly, asking the wrong donors at the wrong times, or (worst of all) not actively asking any donors at all, which will quickly sap a planned giving program’s effectiveness. The key is effective segmentation.

So, where do you start?

If planned giving is new to your organization, you may have little context for how to focus your communications and cultivation strategies to ensure success.

Have no fear. You’re not alone—plenty of organizations are taking the same journey, and their lessons can help. In this guide, we’ll review the role that segmentation should play in planned gift fundraising and 4 key insights from the 2023 FreeWill Planned Giving Report you can use to start honing your strategy right away.

Starting a planned giving program? Download the FreeWill Planned Giving Report

The Role of Segmentation in Your Planned Giving Program

You’re already familiar with the concept of donor segmentation: Sorting donors into discrete groups based on shared characteristics to more effectively target them with messaging and appeals based on what you know about them.

Segmentation empowers your new programs and projects to drive the desired impact without wasting undue time and resources. When done well, it leads to more efficient fundraising, higher ROIs, and stronger donor relationships. 

In a planned giving program, segmentation will help to:

  • Guide your marketing strategies by helping you better define your audiences, develop donor personas, and craft more efficient, tailored messages.
  • Focus your direct outreach and cultivation by empowering you to identify top prospects and understand how to best speak with them based on their motivations, giving capacities, affinity levels, and more.
  • Improve qualification and other backend logistics for gift officers, allowing them to easily find the segments and prospects who warrant the most attention at any given time.
  • Build your nonprofit’s planned giving skills, helping you actively learn and improve with points of comparison over time.

Together, these benefits equal fundraising efficiency. However, organized data is the key. You can’t tap into the real-time and long-term benefits of segmentation without a solid foundation of data and processes for gathering, updating, and analyzing it. A robust CRM (like Virtuous) and planned giving-specific tools for collecting the right information are key investments for planned giving programs as they scale up.

4 Key Tips for Segmenting Your Planned Giving Audience

Now, let’s get tactical with demographic insights. Keep them in mind as you approach your next planned giving outreach push, whether that’s marketing your program, contacting a prospect, or analyzing past performance.

1. Understand the Nuanced Age Breakdowns Among Bequest Donors

Planned giving programs should prioritize building relationships with older donors. It’s well understood that these donors are more likely to both actively think about estate planning and have the capacity to bequest a meaningful gift:

  • 39% of bequest dollars were given by FreeWill users between 45-65 years old. They made up 38% of all estate plans made on the FreeWill platform.
  • 37% of bequest dollars came from those aged 65-84, representing 28% of the total estate plans created.

However, don’t neglect your younger donors. We’ve consistently seen that younger will-makers are in fact, the most likely to create a bequest to charity, and their average gift sizes have increased:

  • FreeWill users aged 18-24 made up 20% of bequest donors, the highest proportion among all age cohorts.
    • Their bequests represent just 2% of committed dollars.
    • But the average value of their bequests increased from $19.1k in 2022 to $28.3k.
  • Users aged 25-44 made up 15% of bequest donors.
    • Their bequests represent 20% of committed dollars.
    • The average value of their bequests increased from $30.7k in 2022 to $33.8k.

Note that only these two youngest age cohorts showed an increase in average gift size in 2023. 

There could be many reasons for this. Younger adults are less likely to have heirs they want to prioritize in an estate plan. Those who proactively consider estate planning at these ages may be more likely to be wealthy (although everyone needs a will—remind your donors!), or they may be entering high-paying careers for the first time and want to be generous to their favorite causes when prompted to create a will. Older groups in or closer to retirement age may also have been reallocating their assets and adjusting their plans amid a turbulent economy.

The takeaway: Try to balance your approach. Older donors are more likely to commit sizable bequests, but your nonprofit should also invest in building relationships with its younger donors to create a sustained support pipeline, as bequest donors are likely to increase their annual gifts over time. Identify younger supporters who are inclined to create wills, actively steward your relationships with them, and build long-lasting philanthropic partnerships.

2. Deepen Connections Among a Few Key Demographics

As you consider the dynamics of age, keep in mind how else you might segment down to more specific audiences of prospective bequest donors. Consider these groups:

  • Women are the most likely gender segment to create a will at 56.5%. Their average gift value increased from 2022 by 20% to $47.4k.
  • Across all marital segments (single, married, domestic partnership), those without children were more likely to commit a charitable bequest in a will.
  • Single supporters without children made up 14% of will-makers but 27% of all bequests made. Their gifts represent 45% of all bequest dollars committed, by far the highest proportion among all familial segments.
  • Pet owners are consistently more likely to create a bequest in a will—23% of pet owners will contain bequests vs. 13% of wills that do not include pets.

Here’s the key takeaway: Single women, donors without children, and pet owners are often the best prospects for planned giving for many nonprofits.

Consider the various intersections of these groupings—by age, gender, marital status, parental status, even pet ownership—and think about your own nonprofit’s largest gifts or longest-lasting donor relationships. Where would your most dedicated supporters fit into a demographic matrix? What about any existing bequest donors?

Of course, these trends and findings aren’t one-size-fits-all. You understand your community and audience the best, and the breakdowns in giving trends among these segments can be quite nuanced. Take a closer look at all the demographic data in the report to learn more and orient your nonprofit to find the best starting points for your planned giving outreach.

3. Brush up on Contingent Gifts and How to Discuss Them with Some Donor Segments

A contingent gift is a bequest that is given to a contingent (or secondary) beneficiary. Will-makers can name another beneficiary to receive a bequest if their primary beneficiary is unable to receive it, usually because they passed away first. Like with any other bequest, contingent gifts can be given to both people and organizations.

Not surprisingly, married couples and will-makers with children most often include contingent gifts in their wills. Among parents, those with adult children were much more likely to include a contingent bequest (83% of parent will-makers) than those with minor children (17%). It’s also common for married will-makers to include nonprofits as backup beneficiaries.

The takeaway: Brush up on contingent gift policies so you can speak about them if you’re unlikely to secure a straightforward bequest from a prospect. Even if your nonprofit isn’t likely to receive the contingent gift, this will still help build the relationship. 

If you begin promoting planned giving but see groups that don’t engage or ignore your communications, try segmenting them and learning more. Are they married? Do they have adult children? If so, promoting contingent bequests and educating donors on these options could be a new angle to try. You may also conduct further prospect research on this segment to instead solicit different kinds of non-cash gifts like donor-advised fund grants or gifts of stock.

4. Review Benchmark Data for Your Mission Area

Giving dynamics are different for every mission area. The fact that pet owners are more likely to create bequests, for instance, is most immediately helpful for organizations with animal- or wildlife-related missions.

With an idea of who is likely to create a bequest in your unique space and at what giving levels, you can better guide your goal-setting and segmentation processes to reach these audiences. Take a look at the data:

Religious, housing/shelter, and animal/wildlife nonprofits saw the highest average bequest values, all above $30k, with many other types of missions not far behind. Arts/culture, family/foster care, and community/leadership saw the lowest average values, all between $10-20k. 

Here are a few other interesting findings within this data:

  • While military/veteran, humanitarian, and community/leadership nonprofits saw relatively low or middling average bequest amounts, they received the most individual bequests from passionate supporter bases.
  • Arts and culture nonprofits saw the most bequests from the US states of New Mexico, Georgia, Montana, and Maryland.
  • Environmental nonprofits saw the most bequests from California, Oregon, Maryland, and Virginia.
  • Community and leadership nonprofits received 68% of their bequests from women. 64.6% of their bequests came from donors with children.
  • Education organizations had the lowest average age of bequest donors at 45.6 years. Arts and culture organizations had the highest average at 60.8 years.

Do any of these findings stand out to your organization? Curious about demographic breakdowns and locations for your own mission area? Check out the complete report for a deeper dive.

The takeaway: People’s giving motivations are diverse, especially when it comes to forms of giving as meaningful as planned gifts. Big-picture trends that hold steady (childless donors as strong prospects, for example) are extremely helpful, but remember that you can and should look even closer. 

Putting this Information to Work to Empower Your Planned Giving Program

Use this information and anything else you learn as a guide to help promote your planned giving program, but don’t let it limit you! You may identify valuable opportunities with loyal supporters who don’t fit into the specific demographics you’ve been focusing on. 

The best way to cover your bases is to take a two-pronged approach:

  1. Broadly and lightly promote your planned giving program to a wide audience, like by including mentions in your newsletter, publishing donor testimonials online, and creating a few social media posts. 
  2. Reach out more directly to specific segmented audiences that you define using industry reports, your nonprofit’s past data, and educated guesswork. Include tailored explanations of your program, how bequests work, and why they’re so impactful.

From here, continue your multichannel engagement strategies, ensure you’re continuing to collect the right data along the way, and make iterative improvements as you keep learning and experimenting. Your planned giving program will be up to speed in no time.

What you should do now

Below are three ways we can help you begin your journey to building more personalized fundraising with responsive technology.

See the Virtuous platform in action.  Schedule a call with our team for personalized answers and expert advice on transforming your nonprofit with donor management software.

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