People’s reluctance to talk openly about their charitable giving has always frustrated me. Most folks will excitedly share stories about their beautiful new sailboat or the vacation they took to some exotic, far-away land. Yet when it comes to the charities we support, we tend to be far more hesitant to share.
I’ve always found this sadly ironic. We think nothing of exulting the ways we spend money on ourselves, but we consider it unseemly to talk about ourselves at our most noble – when we’re giving away our money to help others. Our world will be far better off when we talk as publicly about our leadership gift to the United Way as when we tell stories about our vacation exploring the south of France.
Beyond establishing societal norms, there’s another more modest implication of most people’s unwillingness to talk publicly about their giving. The field of philanthropy doesn’t have very good data. That can be problematic because it’s hard to design a fundraising program if you don’t know a lot about what your donors are doing. This lack of data is by far most problematic in the realm of estate gifts.
Most of what we know about estate planning comes from self-reported surveys and anecdotal experiences from people who work in planned giving. Yet an increasing number of people are turning to the internet and online companies to craft a will. As a result, for perhaps the first time, we can examine trends in more than 50,000 wills created using the online will company FreeWill.
Before we look at the data, let me begin by saying that writing your will online may not be the best idea for you. Your last will and testament is your final statement to the world, and it will be read only when you’re gone. Hence, you won’t be around to correct any errors or omissions. Further, complex estates typically involve a trust. Visiting with an estate-planning professional to seek tax and legal guidance customized for your unique situation is a good idea for most folks. However, regardless of the efficacy of online wills, there is value in reviewing the data. Here are a few key takeaways from the study.
The average gift to charity through a will created online was $78,630. That’s amazing, especially when you consider that few wealthy families use an online will service. The company that released the data refers to its clients as “everyday people,” yet the average charitable bequest of these average Americans is $78,630. Because estate gifts typically come from assets, they are far larger than most of us can afford to give during our lifetime. The lesson for charities is that estate-planning efforts should not be limited to our most wealthy friends: Middle-class families can also make a significant contribution through their estate plans.
People without children give nearly twice as much money to charity in their estate plans compared to parents. This seems like a pretty obvious statement, but it’s good to have the data to back it up. If you don’t have any children to include in your will, you have more money available to give to charity. Interestingly, although parents have less to give, they are slightly more likely than nonparents to give to charity in their will.
Men are in the minority of people writing online wills, but the bequests they leave to charity are almost 50 percent higher than those written by women. The traditional thinking is that when it comes to planned gifts, efforts should focus on women for practical reasons. In most married couples, the woman is the younger of the two, and women tend to live longer. Yet these data indicate that the traditional thinking might lead charities to miss opportunities by not focusing enough on men.
People aged 44-64 are the ones who are most likely to include a gift to charity in their will. This runs counter to many planned-giving programs, which tend to focus on retired people aged 65 and older. These data imply that many charities are missing an opportunity to begin an estate-planning conversation at a much younger age than typically occurs today.
Of course, the key takeaway for any charity is that if you don’t already have a planned-giving program in place, you should start one soon. It takes years for estate-planning programs to reap rewards, but the gifts received can be large enough to transform a charity for the better.
This column by Bret Bicoy originally appeared in the Peninsula Pulse on July 2, 2020.