Funding Now, and Funding Later – Legacy Matching Grants

19 May Funding Now, and Funding Later – Legacy Matching Grants

19 May 2020

By David Allen, Development for Conservation

Matching grants have been used forever to stimulate giving. It seems like today, they are most closely associated with public broadcasting campaigns and state giving days, but nearly every nonprofit has at least some experience with them. Thirty years ago, I was using a matching grant provided by the Board to stimulate new members to join The Nature Conservancy.

So why has it never occurred to me to use a matching grant to stimulate planned giving?

Several weeks ago, a good friend and colleague forwarded information she had gotten from a donor who was interested in funding such a match, and she asked for my thoughts.

I got really excited.

And the more I dug and learned, the more excited I became.

Here’s how it works:

1. A donor makes a challenge grant according to parameters and rules that can be negotiated. The donor may be an individual or a foundation.
2. The land trust or other organization launches a limited-term campaign through multiple channels to market the availability of the matching grant. Both the launch of the campaign and the completion of the grant are opportunities to publicly celebrate.
3. The basic premise works just like any other matching grant. Donors respond to the marketing and make planned gifts known to the land trust. They make qualifying planned gifts and release funds from the matching grant until the matching grant is exhausted.
4. The grant funds, once released are available for use NOW.

The land trust raises funds now and raises funds later.

Most planned gifts are revocable, which is probably the reason why this type of matching grant is not particularly well known. And some individuals, having let you know that their estate plans include a gift to the land trust will change their minds later.

That’s OK.

Keeping in mind that all of these terms could be modified to suit specific circumstances, here’s one possible scenario to be used as an example only:

• A Legacy Grant Donor makes a $25,000 grant available.
• The organization creates a marketing campaign and a simple pledge form to track new planning giving activity. The form includes a space for donors to estimate the value of their bequest, but this information is not required to trigger matching funds.
• Donors use the form to disclose that they have included the organization in their estate plans. It does not matter whether they actually made the bequest gift months or even years before – ONLY that they have not previously disclosed it. Previously disclosed bequests may also qualify (case by case) if the value has been more recently increased.
• For each planned gift where the value is NOT disclosed, $500 is released from the Match.
• For planned gifts where the value is disclosed, 10 percent of that value is released from the Match, subject to a minimum value of $500 and a maximum value of $5,000. These parameters ensure that a single donor does not exhaust the match by themselves.
• The campaign is planned to run for two years or until the grant is exhausted.
• Matching grant funds are released by the donor on a quarterly basis and based on actual pledge forms received. They are available for use by the organization in the year they are released.

What’s not to like about that?

I have one caution, and several reasons to love it. First the caution: I would not recommend such a campaign for organizations that do not have planned giving programs. This will work, in my opinion, for many different levels of sophistication, but should not be used to create a program. For example. a Legacy Grant could be used to match new bequest gifts only, making it accessible to all sizes of programs. I would think, however, that the organization would want to have at least:

• the capacity to record in a database that donors have made bequest decisions,
• basic planned giving information available on their website and in printed form,
• Board member participation, and
• plans to recognize and steward participating donors.

Otherwise, I love it.

It is scalable. It will work with a $10,000 challenge (matching 20 new bequests at $500 each). And I learned that the University of Wisconsin just completed a $3 million challenge, matching $30 million in new planned giving disclosures. (And everywhere in between!)

It changes the conversation from one asking donors to make bequest determinations at the end of their lives (which is awkward, at best) to one asking donors to help meet a challenge match.

Donor impact. For the right major gift donor, it’s a great way to make a big difference – both now and into the future.

It helps the current year budget. The money from the match grant is available to the organization now.

It’s a great way for Board members to get involved. They can make bequests gifts themselves, which has its own reward, but they can also get behind the marketing and provide testimonials at events on in writing.

It’s not dependent on new giving. Some people have already made the decision to give, but have not yet disclosed it. A Legacy Match provides a reason to make the disclosure.

It’s timely. People are considering and reconsidering their estate plans right now as one of many responses to the COVID-19 crisis. What land trusts offer is permanence. Gifts made to land trusts will help protect places people love forever.

So what do YOU think? Could it work for your land trust? Do you have experience with Legacy Match campaigns that you can share? What questions would you ask before launching such an effort?

Cheers, and have a great week!

-da

Photo by Bernard Spragg courtesy Stocksnap.io