Funding Now, and Funding Later – Legacy Matching Grants

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

 

 

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6 Comments
  • Heidi Habeger
    Posted at 13:09h, 19 May Reply

    David, As you know I’m planning to do a Legacy match campaign, leveraging the upcoming retirement of our ED, who is a Legacy Circle member. I’ve been looking forward to doing this and collected a lot of good information from MCF, who had a very successful campaign a few years ago. Their success hinged on having a great leadership team and their peer to peer outreach. Will keep you posted regarding our campaign.

  • richard epstein
    Posted at 09:55h, 19 May Reply

    Dave, I don’t know that the Land Trust that I volunteer with has a planned giving program (I will look) but they do not (frequently) have general fund raising based on matching grants. However effective are matching campaigns. I see them all of the time and prefer giving in response to such campaigns but would appreciate a better understanding. I assume that they would not be so popular if they were not effective but then again…

    Thanks,

    Rick Epstein

    • David Allen
      Posted at 10:09h, 19 May Reply

      Rick – Matching grants are widely used (though not related to planned giving) by many different organizations. There is ample evidence that using matching grants stimulates giving, but the details of the match do not seem to be as important. In other words, I haven’t found evidence that a 5:1 match is measurably better than a 1:1 match. Also, matching grants should probably not be used exclusively, because there will be a tendency for donors to get trained to wait for one, which has the potential for depressing giving in the long run.
      Thank you for writing!
      -da

  • David Lillard
    Posted at 09:53h, 19 May Reply

    I want to make sure I’m following this! What about the case in which we raise cash matches that are immediately available on hand? Are they “endowed” with a timed release, or are they immediately available. As in, “You can help sustain us now and in the future by matching these planned gifts by these amazing donors.” An organization I support is planning a campaign to build the endowment. Is this an appropriate tool? Thanks!

    • David Allen
      Posted at 10:03h, 19 May Reply

      David – A Legacy Match would be a great tool to use with a campaign to build the endowment! As I probably didn’t mention strongly enough, I don’t know of any land trusts who are using Legacy Matches yet. If they are out there, I hope that they will let me know! The two case studies I looked at were from Environmental Defense Fund and the ACLU (plus the UW campaign I referenced in the blog).
      So – in the cases I looked at, the funds were dribbled out by the donor on a quarterly basis as qualifying gifts were received and documented. The money from the grants was unrestricted and available immediately. In other words, the Legacy Match grant was not itself a bequest, but it was not granted all at once either.
      Hope that helps.
      -da

  • Carol Abrahamzon
    Posted at 08:32h, 19 May Reply

    What a great idea good friend! 🙂

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