It’s Both/And: How Cash & Asset-based Gifts Work Together
For today’s tight-budgeted nonprofit organization, it is tempting to neglect cultivating larger, more complex Gifts of Assets or planned gifts that take time to come in and just go for the cash gift today. But there’s no need to sacrifice anything—you can have both!There’s an unfortunate myth among nonprofit leaders that transformational gifts such as gifts of assets or planned gifts, which take time to come in, discourage donors from giving cash-based gifts today.
The basis of this myth goes like this: because the gift amount for the Gift of Asset or planned gift is so large, church members will feel their obligations have been met and will neglect their tithes and offerings.
And because most nonprofits live hanging desperately on from one fundraising campaign to the next, this myth effectively stops most nonprofits and ministries from even trying to cultivate an asset-based gift.
When you are strapped for cash it’s hard to think of anything else but that next cash-based gift. And it’s especially hard to ignore the fear of losing a current gift for the sake of a transformational gift that would come in much later.
The Tragedy of Neglecting Asset-Based Gifts
This myth is dangerous because when you neglect cultivating transformational gifts, you doom yourself to an endless cycle of raising money just to keep the lights on. Current cash gifts are the lifeblood of any organization, but cash flow from current gifts varies randomly and uncontrollably.
Transformational gifts such as endowments, philanthropic trusts, and Gifts of Assets may take some time to cultivate and execute—but when they “turn on,” your organization or ministry will receive regular, consistent income that can help you weather the turbulence of cash-based giving.
The truth is you need both cash-based and asset-based gifts to propel your mission. This is not an either/or decision—and if you approach it that way, your mission will suffer for it.
And here’s the good news:
Asset-based gifts and planned gifts do NOT discourage current cash gifts. You need both. Click To TweetAsset-based gifts and planned gifts do NOT discourage current cash gifts.
In fact, the evidence shows it’s really the opposite: When donors engage in giving from their assets and estates, they are more likely to give current gifts and their average amount per gift goes up!
The Synergy of Asset-based Giving & Cash-based Giving
Texas Tech professor and planned giving expert Russell James conducted a recent study which discovered that donors who added a charity to their will increased their cash-based giving by “more than $3,000 dollars after making the planned gift.” Check out the breakdown of James’ research below from Pentera’s planned giving website:
| Prior to Making Planned Gift Average Annual |
After Making Planned Gift Average Annual |
|---|---|
| $4,210 | $7,381 |
This study reveals an encouraging synergy between asset-based giving and cash-based giving—when you cultivate asset giving, you automatically increase cash giving.
When you cultivate asset giving, you automatically increase cash giving. Click To TweetThe results of this study should motivate us to cultivate as many asset-based gifts as we can—because it increases our annual, cash-based giving. And Professor James is not the only one to have found this to be true.
Another study, done by Indiana University Lilly Family School of Philanthropy in 2007, showed that donors who put a charity in their wills gave more than twice as much in annual gifts to that same charity as donors who did not have that charity in their wills. Here’s the breakdown of that stat from the Pentera website:
| Charity in Will Average Annual |
No Charity in Will Average Annual |
|---|---|
| $4,490 | $2,043 |
Raise Annual Income through Transformational Gifts
Despite coming out with slightly different numbers, both of these studies clearly show that by cultivating and raising funds through asset-based gifts and planned gifts, you can raise the yearly cash-based income for your organization or ministry!
It just makes sense.
The members who put your organization in their will and those who give from their assets are fully invested in your mission. In other words, they’re “all in” and are more than happy to give as their cash flow situation allows.
So when it comes to asset-based giving, your annual revenue doesn’t have to suffer. In fact, your annual income will be bolstered by educating about and encouraging asset-based giving.
For real answers and guidance when it comes to asset-based giving and planned gifts, our team of asset giving experts at The Giving Crowd can help.
The first call is free and there’s no obligation on your part. So if you’d like to see if we’re a good fit for you, let’s talk!
