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The sweeping tax overhaul enacted in 2017 raised concerns that philanthropists would reduce their support of the nonprofit sector during 2019.

That did not happen, according to a study released Thursday by BNY Mellon Wealth Management’s planned giving practice. Donors increased their planned gifts last year, with charitable gift annuities performing particularly well.

(Related: Schwab Charitable Donors Granted 33% More Money This Year)

The number of these giving vehicles rose by 21% year over year, and the average gift amount increased by 56%. The study said nonprofits should take note, and increase their focus on marketing gift annuities.

“Charitable gift annuities have remained a consistently popular way to give,” Crystal Thompkins, national director of gift planning services at BNY Mellon Wealth Management, said in a statement.

“For many nonprofits, it is a great way to create lifetime engagement with donors at all levels of support, and can open the door for deeper conversations about other ways to make an impact with their giving.”

According to the study, 74% of donors made gifts to organizations outside the state of their primary location, up from 66% in 2018, highlighting the importance of maintaining visibility and registering to issue gift annuities in states where gifting is the most prevalent.

Fifty-eight percent of gifts came from repeat donors, which the study said showed that maintaining stewardship efforts was also critical, particularly given the increased competition for philanthropic dollars.

BNY Mellon’s study provides analytics and observations on charitable gift annuity and charitable remainder trust activity for some 100 nonprofit organizations, and insights gained from its planned giving clients on gift acceptance policies and donor behavior. A client survey conducted in April explored the effect of the pandemic on gift planning, and included feedback from 35 nonprofits.

COVID-19 and Planned Giving

Fifty-one percent of nonprofits surveyed said COVID-19 had negatively affected their planned giving efforts.

Related: Impact Investing: What Every Advisor Needs to Know in the COVID-19 Era

At the same time, many nonprofits reported that they had turned the challenges of social distancing and remote work into opportunities to strengthen donor relationships and mission-focused messaging.

These shifts include changing the tone of marketing messages and focusing on specific giving strategies.

COVID-19 has also decreased the level of donor-initiated contact, according to 40% of organizations. The main reasons for donor-initiated contact are notifications of bequests and changes to estate plans or personal conversations.

BNY Mellon Wealth Management’s planned giving practice recommends that nonprofits consider several operational initiatives:

  • Effective digital communications and social media strategy paired with personal, safely distanced outreach and connection
  • Deep expertise in how all legislative changes create opportunities for donors to serve their families and their values well
  • Leadership development, taking advantage of how COVID-19 has shifted many professionals’ focus to find more fulfilling work

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