- 2.3% of household wealth is held in cash and checkable accounts; stop ignoring the other 97.7%.
- 60% of the largest gifts to colleges included no cash.
- 77% sustained increase in giving after estate commitment.
- 6X faster growth in long-term contributions with asset-based fundraising.
- 50X greater likelihood of making asset gifts among legacy society members.
In research, the greatest certainty results from triangulation. We don’t just get one signal; we get many. And every signal from every angle all point to the same answer. That’s when confidence grows.
Such is the case with this set of fundraising statistics. Powerful fundraising comes from moving beyond just disposable-income sharing, i.e., cash, towards wealth sharing, i.e., assets. What’s called “planned giving” (or better described as “major gifts of assets”) often gets pushed to the back of fundraising priorities. But the data point to the power of this approach to fundraising.
So, if you ever have a leader say,
- “Let’s be data-driven on this.”
- “Decisions should be evidence-based.”
- “Show me the numbers.”
Then, start with these:
Only 2.3% of household wealth is held in cash and checkable accounts. Stop ignoring the other 97.7%.
Wealth is not held in cash. It’s held in noncash assets. Real wealth is held in real estate, stocks, bonds, business interests, and retirement accounts.
Fundraising tends to fight over the 2.3%. It focuses on cash gifts, cash conversations, and cash asks. Why? Because it’s easy. We don’t have to learn anything to ask for cash.
Psychologically, there is a big difference between disposable-income conversations and wealth-sharing conversations. Disposable income is held in cash. Cash conversations lead to disposable-income decisions. Wealth is held in noncash assets. Asset conversations lead to wealth-sharing decisions.
These two conversations create two different mindsets. Each creates a different set of reasonable or possible outcomes. Wealth is a large reference point. It makes a big gift feel reasonable. Disposable income is a small reference point. It makes a big gift feel ridiculous. Reminding people of their wealth holdings also makes them feel wealthier. This feeling increases giving.
Of course, people know they can turn assets into gifts. But without an asset conversation, they won’t consider that option. If you get a cash bonus of $200 today, it might affect which restaurant you choose tonight. If the shares in your brokerage account go up by $200, it won’t. In accounting, these are identical results. In psychology, they’re different. The brokerage account is a different “mental account.” Assets simply don’t apply to a disposable-income decision.
There’s also an immediate penalty for selling the asset: capital gains tax. But having asset-giving conversations can change this mindset. There is no tax for giving an asset. In fact, we can get a double tax benefit (a deduction + avoiding capital gains), all without changing the portfolio.
You may not be a financial professional, but you can share stories of what others like the donor have done before. You can be a source of valuable ideas. And unlike some advisors, you aren’t just trying to maximize assets under management. So, you can share ideas the donor might never hear otherwise.
And remember, you are the expert. You’re the expert on your organization. You know what it can do and what it can’t. You know when it works for the donor’s philanthropic goals and when it doesn’t. You are a valuable part of the donor’s wealth management conversations.
And there’s good news. You won’t have much competition from other nonprofits. Cash and checkable accounts are like a kiddie pool on the beach. Nonprofits are all desperately fighting over the kiddie pool while ignoring the ocean. It takes work, but the learning is free. EncourageGenerosity.com has free videos, slide decks, audiobooks, and digital books on this topic, like: Visual Planned Giving; The Storytelling Fundraiser (Ch. 6); The Socratic Fundraiser (Ch. 6, 7); The Biblical Fundraiser (Ch. 4).
Data source: Board of Governors of the Federal Reserve System. Financial Accounts Guide – B.101.H Balance sheet of households [Table]. https://www.federalreserve.gov/apps/fof/DisplayTable.aspx?t=b.101.h
60% of the largest gifts to colleges included no cash.
Want to raise large gifts? Then it helps to know what they look like. A CASE study examined the biggest gifts within every type of institution from major research universities to community colleges. The results were clear: the largest gifts weren’t cash.
Most were gifts of assets, not income. While some mixed assets and cash to fund projects, most had no cash at all. The majority, 60%, were entirely noncash asset gifts.
These big gifts usually accomplished something specific and permanent:
- 66% partly or entirely funded endowments.
- 41% supported capital projects.
- Only 13% included even a single dollar for unrestricted current-use funding.
And they came mostly from older donors:
- 61% were 72 or older
- Only 3% were under 53
So, what do the largest gifts look like at every level of institution? They’re not cash. They’re not unrestricted. They’re not from younger or even middle-aged donors.
Conversations that lead to these big gifts are also different. They’re wealth-sharing conversations, not income-sharing conversations. That means they’re noncash asset conversations. Wealth isn’t held in cash; it’s held as noncash assets. They’re conversations with older people. They’re about specific outcomes and specific gift instructions.
Want to raise large gifts?
- Are you learning how to talk about assets and asset gifts? That makes your work harder. It’s easier just to ask for cash.
- Are you focused on people in their 70s, 80s, and 90s? That makes your work harder. It’s easier to talk with people your own age.
- Are you talking about gifts with specific donor instructions? That makes your work – and the nonprofit administrator’s work – harder.
It’s easier just to talk about how great the organization is and wait for the unrestricted cash to come. None of this makes your work easier. But if you want to raise large gifts, it helps to know what they actually look like.
Study linked here: https://lnkd.in/g5uSJebx
77% sustained increase in giving after estate commitment
After adding charity to their estate plan, annual giving increases by 77%. A nationally representative study shows this dramatic increase is sustained two, four, six, and even eight years later.
Something changes when a person includes a charity in their estate plan. We can see it in the data. These results come from a massive national study on health and retirement that’s been going on for over 30 years. This study looked at before-and-after comparisons of 8,891 people (aged 50+) who put a charitable component into their estate plan.
If someone adds charity to their estate plan (when it wasn’t there before), how does their current giving change? Annual giving goes up by about 77%. This higher level of giving is sustained 2, 4, 6 and even 8 years afterward.
This result doesn’t come from just a few outliers. For example, the share of these people making gifts over $1,000 also increased substantially. The share making gifts over $10,000 increased by more than half.
So, what’s going on? For most people, giving is only a disposable income decision. The first time they will ever commit to a gift from their wealth is often in their estate plan. That commitment changes how they think about their giving. Suddenly their wealth becomes donation relevant, not just their disposable income. That mindset shift can transform their giving.
Full article at UC Davis Law Review, 53, 2397-2431 linked at EncourageGenerosity.com
Long-term contributions grew 6X faster with asset-based fundraising.
What predicts long-term contributions growth in nonprofit organizations? A study of over 1 million IRS Form 990 tax returns, tracked across five years, tested this. One factor stood out: the type of gifts they raised.
Take two otherwise similar nonprofits raising the same total amount of contributions. Nonprofit A asks for and receives only cash gifts (check, credit card, monthly withdrawals). Nonprofit B also asks for and receives asset gifts (stocks, etc. ), not just cash.
That one difference predicts the future. Five years later, total contributions at Nonprofit B, on average, will have grown 2.5 times faster than at the cash-only nonprofit.
And if they both keep doing what they’re doing, the gap keeps widening. For cash-only nonprofits that were still cash-only five years later, total contributions were only 11% higher. That’s basically the same as inflation. In real terms, they were just standing still. For cash-and-stocks nonprofits that were still raising both cash and stock gifts five years later, total contributions were 66% higher.
That is a 6 times greater growth rate.
This was not a one-off success story at one lucky charity. The same pattern showed up:
- In every cause type (every NTEE code).
- In every region of the country.
- In every fundraising size, from organizations raising $100,000 a year to those raising $100 million+.
Why does this happen? For most people, giving is a “disposable income” decision. Disposable income sits in cash. Wealth does not. Wealth lives in noncash assets: stocks, bonds, real estate, retirement funds.
When you invite a donor to give an asset, you change the mental frame. Their wealth becomes donation-relevant, not just their disposable income. They start to think in terms of sharing wealth, not just sharing from this month’s unused income. That mindset shift can reshape their giving today and for the future. If you have a donor who already cares about your cause, helping them make that shift is the single most powerful move you can make for long-term fundraising growth.
Full research article: Nonprofit Management & Leadership, 29(2), 159-179.
Legacy society members 50X more likely to make asset gifts
An analysis of 18,078 donor surveys from a large humanitarian charity found an extreme difference.
The first finding was no surprise. About 80% of donors said they were “unlikely” to include the charity in their will. Among these, only 2.2% were open to considering an asset gift like stocks, real estate, or retirement account wealth. Just 0.4% had actually made such a gift.
However, for those who had included a gift in their will, things were dramatically different. They were 7X more likely to be open to considering an asset gift. (7 x 2.2% = 15.6%). They were over 50X more likely to have actually made one. (53 x 0.4% = 21.2%).
For most people, giving is only a disposable income decision. The first time they will ever commit to a gift from their wealth is often in their estate plan. That decision changes how they think about their giving. Suddenly their wealth becomes donation relevant, not just their disposable income. That mindset shift can transform their giving.
Adding someone to your legacy society isn’t the end of a successful fundraising process; it’s the beginning. This data comes from a confidential internal report, but you can see similar results in The Storytelling Fundraiser (Chapter 6); The Socratic Fundraiser (Chapters 6 & 7); The Biblical Fundraiser (Chapter 4). All books are free to read at EncourageGenerosity.com or available in print at Amazon.
Russell James, J.D., Ph.D., CFP®️ is a professor at Texas Tech University. He directs the on-campus and online graduate program in Charitable Financial Planning and also teaches Charitable Gift Law at the Texas Tech University School of Law. Dr. James has over 100 publications in academic journals, conference proceedings, professional periodicals, and books including 20 on neuroimaging and neuroeconomics. He has been quoted in a variety of news sources including The New York Times, The Wall Street Journal, CNN, MSNBC, CNBC, ABC News, U.S. News & World Report, USA Today, the Associated Press, Bloomberg News and the Chronicle of Philanthropy.
Related Resources:
- The Fundraising Myth & Science Series, by Dr. Russell James
- What Is Preliminary Qualification for Major Donors and Prospects?
- A Fundraising Process That Builds Donor Trust
- Why You Should Focus Your Fundraising Efforts on Generating Gifts of Wealth (from Assets) Not on Disposable Income (from Credit Cards, Checks, or Cash)
