Planned Gifts Help Small Charities Build Endowments

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Judy Morency never thought of herself as the kind of person who could leave a quarter of a million dollars to charity.

With a combined income of less than $100,000, "I didn't think my husband and I had the wherewithal to make any kind of a dent," says Ms. Morency, a marketing director at Zeeco, a Broken Arrow, Okla., company that produces combustion equipment for refineries and chemical plants. "I had heard of rich people doing it all the time, but I didn't think of ourselves in that league."

Last year, Ms. Morency and her husband joined that league by making a planned gift to ClareHouse, a Tulsa, Okla., home for the terminally ill.

Their gift to ClareHouse's endowment is projected to have a value of $250,000 to $300,000 at their deaths and was made possible through an effort by the Tulsa Community Foundation to encourage local charities to boost the value of their endowments by seeking bequests and other planned gifts.

Tulsa's endowment effort, which wrapped up in May after two years of operation, raised $7.3-million in planned gifts for more than 50 charities. But the project was designed to have more long-lasting effects by teaching executive directors, fund raisers, and board members about planned gifts, as well as reaching potential donors throughout the metropolitan area.

Most small and midsize Tulsa charities couldn't afford to pay for the educational, legal, and tax advice needed to arrange planned gifts, says Phil Lakin, the foundation's executive director.

Nor could they afford to stop raising money for this year's budget in order to focus on increasing their endowments, he says. For that reason, the foundation agreed to provide each group that participated with 20 percent of the amount they raised in endowment gifts. "We wanted them not to lose any of their revenue for having directed their attention to planned giving," he says.

The total cost of the community foundation effort, including the $700,000 to the 53 charities that participated, was about $1-million, according to John C. Wolfkill, director of administration and donor partnerships at the Tulsa Community Foundation.

When the community foundation was founded in 1998, it found through an informal survey that fewer than 10 percent of Tulsa nonprofit groups had endowments, Mr. Lakin says. Less than a quarter of those organizations had saved $100,000 or more.

The foundation, as well as local fund raisers, saw planned giving as a way to wean charities off their reliance on hand-to-mouth fund raising, he says.

"If you start focusing on planned gifts, 10 to 15 years from now, you're going to start seeing those efforts pay off in a very significant way," says Leah Brumbaugh, development director of the Mental Health Association in Tulsa, which offers housing, recovery programs, and other services to the mentally ill. Her organization raised $167,210 toward a $100,000 goal in the Tulsa Community Foundation's program.

The community foundation's endowment challenge gave small Tulsa-area charities a rare opportunity to go after planned gifts, say participants.

"For many small organizations like us, when you're doing everything you can to meet your operating needs, it does fall to the bottom of the to-do list," says Kelley Scott, executive director of ClareHouse. "It would have been much harder for us to initiate something like this on our own — we get so bogged down in the day-to-day stuff."

The charity raised slightly more than $186,000 — more than twice its $75,000 goal — for its endowment, and received an additional $15,000 from the Tulsa Community Foundation.

The Camp Fire USA Green Country Council, in Tulsa, which provides camping and after-school programs for children and teenagers in northeast Oklahoma, is a case in point.

Bobbie Henderson, the group's executive director, says she and her board have long understood the need for planned giving. "We have probably had a little section in our strategic plan every year that says, 'Pursue planned giving to increase endowment,'" she says.

But until the Tulsa Community Foundation's program came along, she couldn't spare the time or staff members to focus on it. "It's just very labor intensive," she says.

But with the help of the foundation, Camp Fire received six planned gifts, for a current total value of more than $250,000, well above the group's $125,000 goal. The foundation estimates the gifts will be worth more than $1.1-million by the time the charity receives them in full.

The prospect of adding those gifts to its endowment — which currently contains only about $75,000 — will be a boon to a group whose clients have changed over the past 15 years, from mostly middle-income girls in camp programs to mostly low-income boys and girls in after-school programs, Ms. Henderson says.

"The difference today is that we're providing those services to children and families who can't necessarily afford to pay for it," she says. While in the past camp fees and candy sales accounted for about two-thirds of the Camp Fire budget, she says, today those numbers have dwindled, and the organization relies on government and foundation grants for more than half of its annual financing.

Ms. Henderson admits she still doesn't quite understand charitable lead trusts and other planned-giving concepts, but she says she knows enough to feel confident telling donors and board members, "If you want to support Camp Fire beyond your lifetime, this is a way to conserve your assets, plan for your family's financial needs after you're gone, and meet your desire to support a cause that has been important to you and your family."

To build on the success of its planned-giving incentives, Mr. Lakin says his foundation will next month offer a way for charities to pay an annual fee of a few thousand dollars to share a planned-giving consultant's services.

"We would never advise these organizations to go out and get their own planned-giving officer," Mr. Lakin says. "Collectively we can be a lot more efficient and get more bang for our buck."