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Bequest Management

Bequest Cultivation and the Costanza Hypothesis

Bequest Cultivation and the Costanza Hypothesis

If What I am Doing is Wrong, The Opposite Must Be Right

In Episode 82 of Seinfeld, George Costanza resolves to alter the course of his life’s trajectory by acting contrary to his instincts.  He reasons that since every decision he has ever made has been wrong, the opposite would have to be correct.  He starts this momentous change by changing his typical lunch order from tuna salad to egg salad.  (Jerry helpfully observes that the upstream-swimming salmon would have been a better choice as the opposite of the downstream-swimming tuna).

The so-called “Costanza Hypothesis” enunciated in the subtitle is a behavioral rule that has application far beyond George’s midday menu.  Applied with prudence, it can provoke salutary changes in one’s personality and one’s life.  Taken to the extreme, it can lead to frustrating contrarianism (at best) or total paralysis (at worst).

It may surprise some that a modest application of the Costanza Hypothesis may produce big benefits in the mission of bequest cultivation.  No gift planner is unaware of the bequest bonanza that is slated to appear in the coming three decades.  Every nonprofit wants its rightful share, and usually more.  Bold goals demand bold action.  Sometimes, this can involve some changes in the playbook.

Applied with prudence, unorthodox approaches can yield great benefits.  So-called “contrarian investing” has created many fortunes.  In baseball, some have made it to the Hall of Fame on the strength of a knuckleball, an unusual pitch thrown at a speed less than that achieved by many high-school moundsmen.  Comedians with deadpan, uninflected deliveries are supposed to be unfunny, but try telling that to the legions of Bob Newhart fans.

It never hurts to shake up everyday wisdom.  Even in bequest cultivation. For starters, we mention three such agitations for consideration. Each of these represents an application of the Costanza Hypothesis to long-standing dogmas of practice for the gift planning community.  To a greater or lesser degree, each one involves “doing the opposite” of what the normal template for bequest cultivation would dictate.

Encourage Restricted Gifts in Bequest Cultivation

Charities like the freedom that accompanies unrestricted gifts.  However, three of five potential donors are worried about the charity “wasting” the bequest.  That is precisely why we see those agonizing caveats like “no part of the gift to be used for overhead or administrative costs.”  Restrictions are usually expressions of the realization that the donor/testator will have no control, no voice, once the gift is realized.  Although charities like unrestricted gifts, many donors –especially larger donors – have some angst about them.

Soothe the angst.  Take control of the situation. Every gift planner knows the five or six or eight ways that the charity may use the bequest.  Figure out which of those “sings” to the donor and work with her/him to craft a restriction that is both meaningful and flexible.  If the gift so warrants and the implementation is feasible, provide some post-mortem name recognition in conjunction with the use of the gift (website recognition is great for this purpose).  The donor doesn’t want a post-mortem kick to the curb.  He wants a voice.  Rational restriction is a way to give it to him.

Do Not Oversimplify

There is a lot of truth in the conventional wisdom that the so-called “case for support” should be as simple and short as possible.   In other words, the KISS principle.  With the increasing sophistication of donors, it is an open question whether oversimplified appeals may create suspicion that something is being concealed or that the case for support is nothing more than pure salesmanship.  It may be useful to raise the intellectual index of the fundraising discussion by a level or two, or maybe even more.

There is anecdotal evidence, for instance, that some high-dollar donors have been quite impressed to receive from a charity a brief amicus curiae that the organization has filed in an appellate litigation.  Even though the legal issues may be complicated, a charity’s participation in such a matter may well show a level of thoughtfulness and a depth of intellectual involvement in the subject matter that is simply not conveyed by a glitzy pie-chart or a catchy fundraising letter.  For the “right” donor, this could be a decisive factor in a bequest commitment.

CCK Tip:  This strategy only makes sense if the amicus brief is clearly a statement by the charity of its unique and significant interest in the case.  Continue reading for examples.

Unremarkable Position:

The Nickelhoffer’s Disease Foundation opposes the efforts of the State of Indiana to regulate the amount of money that a charity may spend on fundraising.  Such an enactment exceeds the authority of any governmental body.

Significant Position:

The Nickelhoffer’s Disease Foundation is dedicated to the elimination of an “orphan disease” that affects fewer than 2,000 Americans.  Because this malady is not well known, it is difficult to cultivate support for necessary research.  The Foundation must spend 95 cents to raise a dollar.

Nonetheless, since 2014, the organization has been able, based on its fundraising, to finance scientific projects that have resulted in the first effective treatments for Nickelhoffer’s Disease.  The life expectancy of Nickelhoffer’s victims has more than tripled as a direct result of this research.  The Indiana legislation would stop our hard-won progress in its tracks and condemn Nickelhoffer’s victims in the Hoosier State to a life of hopeless despair.

Talk About the “Hereafter”

No one enjoys discussing death, especially not their own.  Gift planners make herculean efforts to avoid the subject, even though post-mortem occurrences are the subject matter of their profession.  Euphemistic expression is an essential tool of the bequest cultivation business.

Some donors, however, are more than fine with brutal candor. Sensing this, a gift planner may do well to discuss the stewardship standards that the charity will apply to a matured bequest gift and how those measures will ensure the precise fulfillment of a testator’s intentions. It may also be productive to explore the recognition opportunities that are available for permanent (or at least long-term) memorialization of the donor’s generosity.