1. Effective promotion of legacy giving: A presentation of new research findings and theory Presentation at Legacy Promotion Ireland, Dublin, Ireland, 26 July, 2010 Russell James III, J.D., Ph.D. Associate Professor Director of Graduate Studies in Charitable Planning Texas Tech University Russell.James@ttu.edu

4. New Questions Changes Not just who has charitable plans but when do they add and drop them Intentions v. Outcomes Did during life plans result in after death distributions

6. Over 20,000 people per survey.

7. In person interviews, some follow up by phone.

8. Started in 1992

9. Questions within larger Health & Retirement Study

11. U.S. Over 50 Population * Weighted nationally representative 2006 sample

12. U.S. Over 50 Population * Weighted nationally representative 2006 sample

13. What share of over-50 charitable donors giving over $500 per year indicate that they have a charitable estate plan?

14. * Donors giving $500+ per year, weighted nationally representative 2006 sample

15. Can that be right? Maybe a lot of donors will eventually get around to making a charitable plan? Will donors ever get around to making a charitable plan?

16. Projecting based on age, gender and mortality or tracking actual post-death distributions 88%-90% of donors ($500+/year) over age 50 will die with no charitable estate plan.

17. You mean 90% of our donors will die without leaving a gift? You mean we could generate 9 times more estate gifts from our current donors?

18. Among donors ($500+) over 50 with an estate plan, what is the single most significant factor associated with having a charitable estate plan? Age? Education? Wealth? Income?

19. Among Donors ($500+) with an Estate Plan

20. Regression: Compare only otherwise identical people Example: The effect of differences in education among those making the same income, with the same wealth, same family structure, etc.

21. Likelihood of having a charitable plan(comparing otherwise identical individuals) Graduate degree (v. high school) +4.2 % points Gives $500+ per year to charity +3.1 % points Volunteers regularly +2.0 % points College degree (v. high school) +1.7 % points Has been diagnosed with a stroke +1.7 % points Is ten years older +1.2 % points Has been diagnosed with cancer +0.8 % points Is married (v. unmarried) +0.7 % points Diagnosed with a heart condition +0.4 % points Attends church 1+ times per month +0.2 % points Has $1,000,000 more in assets +0.1 % points Has $100,000 per year more income not significant Is male (v. female) not significant Has only children (v. no offspring) -2.8 % points Has grandchildren (v. no offspring) -10.5 % points

22. Find your estate donor…

23. From an Australian study by Christopher Baker including 1729 wills: “Australian will-makers without surviving children are ten times more likely to make a charitable gift from their estate”

24. How did giving during life compare with post death transfers? $ $ $ $

25. Estate giving and annual giving for 6,342 deceased panel members

26. When did people drop charitable plans?

27. Yes! Yes! No. What happened here?

28. Factors that triggered dropping the charitable plan 1. Becoming a grandparent 0.7226* (0.2997) 2. Becoming a parent 0.6111†(0.3200) 3. Stopping current charitable giving 0.1198* (0.0934) 4. A drop in self-rated health 0.0768†(0.0461) Some factors that didn’t seem to matter: Change in income Change in assets Change in marital status *Fixed effects analysis including 1,306 people who reported a charitable plan and later reported no charitable plan. Coefficients show relative magnitude of factors.

29. When did people add charitable plans?

30. Factors that triggered adding a new charitable plan Starting to make charitable gifts .1531† (.0882) An improvement in self-reported health .0927* (0.0446) A $100k increase in assets .0061** (.0023) One factor dramatically reduced the likelihood that a new charitable plan would be added: The addition of the first grandchild -.4641† (.2732)

31. Do the estates of people who make charitable estate plans grow differently than the general population?

32. After making their plan, charitable estate donors grew their estates 50%-100% faster than did others with same initial wealth

33. Demographics and future projections

34. The Fall and Rise in Live Births - US

35. Dramatic increases on the horizon Temporary drop in key demographic population

36. The fall and rise in live births - UK

37. Persons alive in the UK, 2008-2030

38. Ireland population pyramid, 2001 Without the large post-war baby boom, expect less rapid growth in older ages Growth will come primarily due to improved longevity

39. Projecting future bequest giving Frequency of future bequest gifts Change in population Change in tendency to make bequest gifts

40. Charitable Estate Planning among US Adults Aged 55-65

41. Increases in charitable planning are driven by increases in childlessness and education Time trend disappears when including childlessness and education Time trend exists Probit analysis of all respondents age 55-65 in 1996-2006 HRS. Outcome variable is the presence of charitable estate planning.

42. Charitable estate planning among adults aged 55-65

43. Basic relationship This suggests that the overall trend of increased charitable estate planning may have been driven, in large part, by changes in childlessness and education. Such a relationship has important implications for predicting charitable estate planning levels in the future.

46. http://www.statistics.gov.uk/articles/population_trends/birthstats_pt94.pdf

48. In 1996, less than 27% of those in the 35-54 age group had at least a bachelor’s degree.

49. By 2007, over 31% of those in the 35-54 age group had at least a bachelor’s degree (Current Population Survey, 2007).

51. New Ideas for legacy promotion from a theoretical framework Applying “The Generosity Code”

52. Why theory instead of just a list of techniques? Limitations of “war stories” research So called best practices may just be practices Theory based strategies are more flexible New techniques can emerge as circumstances change Guides practice even where, as in bequest giving, interim measurement is difficult.

53. What does a fundraiser do? Bring in money? This description is “true”, but not very informative. Applies to essentially all private sector jobs. What does a Lawyer do? Makes money. What does a grocer do? Makes money. What does an artist do? Makes money. You could bring money to your organization from government contracts, operation of a charitable business, or other means, but it wouldn’t be as a fundraiser.

54. What does a fundraiser do? A fundraiser …

55. What does a fundraiser do? A fundraiser … Encourages Generosity

56. Encouraging generosity An issue of fundamental human significance An independently valuable mission separate from (although complementary to) your organization’s mission

57. Understanding generosity Giving occurs when the “potential energy” of a gift’s potential value is unlocked by the “catalyst” of a request

58. Quality of Request (Catalyst) Potential Value of Gift (Potential Energy) Gift (Energy Released) x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

59. Interdependent Utility (Recipient’s experience) I am happy because you were benefitted EmpathyiX Change in well-beingi Act of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

61. Importance of value and felt adherence to itAct of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

62. Self-Efficacy (Donor as change agent) I am happy because I was the one who benefitted you My actions were the cause of the change that I selected Act of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

63. Reciprocity (Response of Recipient to Donor) I receive benefits from the recipient or representative charity Act of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

64. Social Exchange (Response of Others to Donor) I receive benefits from others because of my giving Act of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

65. Cultural Norms (Response of Others to Others) I influence others in the way they behave towards others Act of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

66. Theoretical background These value channels exists for reasons rooted in social psychology (proximate causes) and natural selection (ultimate causes) Act of Receiving Interdependent Utility (Recipient’s experience) Act of Giving Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Others’ Responses Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

67. Theoretical background We can rearrange by their value type including both material and psychological value sources Psychological benefits to donor Material benefits to similar others Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Material benefits to donor Interdependent Utility (Recipient’s experience) Cultural Norms(Response of Others to Others) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor)

68. Understanding generosity Giving occurs when the “potential energy” of a gift’s potential value is unlocked by the “catalyst” of a request

69. Quality of Request (Catalyst) Potential Value of Gift (Potential Energy) Gift (Energy Released) x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

70. Definitiveness How clearly is a decision required? Observers Who observes the decision? Quality of request

71. Quality of a request: Definitiveness Requires a definite “no” Indefinitely deferrable response General support concept General issue awareness General request No request Specific request Definitiveness: The degree to which a request demands a definitive “yes” or “no” The enemy isn’t “no”, it is “no response”

72. Quality of a request: Definitiveness Requires a definite “no” Indefinitely deferrable response General support concept General issue awareness General request No request Specific request “100,000 children have died in West Africa’s current food crisis.”

73. Quality of a request: Definitiveness Requires a definite “no” Indefinitely deferrable response General support concept General issue awareness General request No request Specific request “100,000 children have died in West Africa’s current food crisis. Please help one of the relief agencies if you can.”

74. Quality of a request: Definitiveness Requires a definite “no” Indefinitely deferrable response General support concept General issue awareness General request No request Specific request “Please give £50 to Oxfam to support relief efforts for children caught in West Africa’s current food crisis.”

75. Quality of a request: Definitiveness Requires a definite “no” Indefinitely deferrable response General support concept General issue awareness General request No request Specific request “We are sending an office gift to Oxfam on Friday. Put in whatever you like and I will stop by to pick up your envelope in the morning.”

76. Quality of a request: Observers Observation of a decision point adds a social cost to saying “no” and a social benefit to saying “yes” based upon: Perceived likelihood of observance Observer’s social significance and level of commitment to beneficiaries

77. Office beverages available with payment on an “honor” system. Picture above payment instructions rotated weekly. Payments were higher when picture of eyes was posted. M. Bateson, D. Nettle & G. Roberts (2006). Cues of being watched enhance cooperation in a real-world setting. Biology Letters 2, 412–414.

78. Two groups with two computer backgrounds. Each person receives $10. Computer question: Do you want to share any of it with another (anonymous) participant? A B K. J. Haley (UCLA), D.M.T. Fessler (UCLA). 2005. Nobody’s watching? Subtle cues affect generosity in an anonymous economic game. Evolution and Human Behavior, 26, 245–256

79. K. J. Haley (UCLA), D.M.T. Fessler (UCLA). 2005. Nobody’s watching? Subtle cues affect generosity in an anonymous economic game. Evolution and Human Behavior, 26, 245–256

80. Applications to legacy giving Potential Value of Gift (Potential Energy) Quality of Request (Catalyst) Gift (Energy Released) x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

81. Unfortunate reality of legacy giving “74% of the UK population support charities and when asked, 35% of people say they'd happily leave a gift in their will once family and friends had been provided for. The problem is only 7% actually do.” From www.rememberacharity.org

82. * Donors giving $500+ per year, weighted nationally representative 2006 sample

83. So, why is legacy giving so low? What is missing? x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

84. People may not consider charity during document creation (practice of advisors and mistiming of communications from charity). x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

85. Will drafting and legacy planning is easy to postpone (avoid facing mortality). x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

86. Will drafting is not public, and not an acceptable forum for peer observation. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

87. Most legacy giving benefits can only be anticipated, not actually experienced. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

88. Reciprocity or social exchange is limited. Prior to the gift, the intention is revocable. After the gift, the donor is gone. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

89. Charitable bequests may be viewed as competitive with transfers to offspring x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

90. What strategies within this framework might improve participation in charitable bequest making?

91. Spend more efforts with those donors who do not have offspring (and thus lower competing interdependent utility). x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

92. Promote self-identify of the planned legacy donor as a current identity of social worth. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

93. [Legacy club] members have a love for animals that lasts more than a lifetime. Identify an important value. Associate current planned giving status with that value. Create experienced gift value today, rather than only anticipated post-mortem value. Become a [legacy club] member today.

94. Death creates a natural self-efficacy void. Emphasize giving opportunities with permanence. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

95. Self-efficacy in legacy gifts With death we “disappear”, a serious imposition on self-efficacy. The desire to overcome this is natural. Humankind develops memorials emphasizing permanence.

96. Self-efficacy in legacy gifts Legacy giving can also help fulfill the desire for permanence. But may depend on how the charity will use the gift. Logo from http://www.rememberacharity.org.uk

98. Permanent memorial trusts for legacy donors onlyScholarships, lectureships, sponsor a child, sponsor a rescued pet, annual performances, etc.

99. Develop small permanent giving opportunities exclusively for legacy gifts. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

100. Emphasize data on how quickly inheritances are spent by family members as compared to longevity of a “permanent gift” x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

101. Legacy societies to publicly recognize planned donors and create functioning donor communities through social events. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

102. Always reminding so that the option is “top of the mind” whenever planning happens to occur. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

103. Creating planned giving campaign deadlines to interfere with ease of postponement. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

104. A small organization’s two-year campaign to reach 100 planned legacies http://www.fcs.uga.edu/alumni/legacies.html

105. Encourage will making in donor population. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

106. Provide free planning services to donors with high potential. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

107. Create immediate commitment pledge devices with follow up verification. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

108. Targeting advisors to include charitable questions in their document creation process through information and recognition. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

109. Why not recognize the intermediaries? Intermediaries, such as a will drafting lawyer, are essential to the process. Often the simple act of specifically asking about a gift to charity by an advisor is key. A “new” idea?

110. Magdalen HospitalList of Contributors, 1760From: Sarah Lloyd, ‘A Person Unknown’? Female supporters of English subscription charities during the long 18th century, Voluntary Action History Society Research Conference, Canterbury, UK, July 14-16, 2010

111. Recognizing intermediaries Friends of charity solicitors society Sponsoring free CPD (continuing professional development) charitable planning related education opportunities Advertising those who have completed the CPD program. Publishing recognition of active solicitors authoring charitable wills probated in most recent 6 months in particular county, town. Shows frequency of professional activity.

112. Consider legacy arrangements that involve children in charitable decisions. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

113. Public notice of founding of the Bible Society (1804)and listing of donors The Morning Post (London, England), Monday, March 19, 1804; pg. [1]; Issue 11061. 19th Century British Library Newspapers: Part II.

114. Executors become voting Governors for life

115. The framework doesn’t provide automatic answers, but may help generate ideas about value creation and realization in your context. x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

116. Quality of Request (Catalyst) Potential Value of Gift (Potential Energy) Gift (Energy Released) x = 1. Definitiveness 2. Observers Interdependent Utility (Recipient’s experience) Self-Identity (Donor as giver) Self-Efficacy (Donor as change agent) Reciprocity (Response of Recipient to Donor) Social Exchange (Response of Others to Donor) Cultural Norms (Response of Others to Others)

117. Thanks for listening These slides (and others) are posted at www.slideshare.net/Generosity