Real Estate Gift Trends – Survey Results, 2013

by Dennis Bidwell
August 2013

1.  Trends in real estate gift activity in recent years

About 17% of respondents reported an increase in real estate gifts in recent years, while 83% reported receiving about the same number of real estate gifts. No respondents reported a decline in real estate giving.

Commentary: As gifts of cash and securities were hard to come by during the recession, development shops increasingly turned their attention to attracting other assets, most notably real estate. Now that the economy is coming back to life, and development activity is picking up, those same development shops – having acquired a greater comfort level with real estate gifts – continue to pursue the considerable opportunity represented by real estate assets.

2.  Sources of real estate gifts

By far and away the most effective way of attracting real estate gifts, according to survey respondents, was “conversations initiated by our organization’s gift officers.” Complete responses:

Conversations initiated by our gift officers……..73% have attracted gifts this way
Referrals from professional advisors……………27% have attracted gifts this way
Responses to information on our website……..9% have attracted gifts this way
Responses to mailings…………………………..9% have attracted gifts this way

Commentary: This tracks completely with my experience in the field, where I find that the non-profits enjoying consistent success with real estate gifts tend to train their gift officers to engage in conversations with their donors about their real estate holdings, knowing they have expertise backing them up if a real estate gift opportunity surfaces.

3.  What motivates real estate donors?

This survey showed the same results as every survey where I’ve asked this question. A desire to be unburdened from the hassles and expenses of real estate as one ages ranks very close in importance to the other major motivators: desire to support the mission of the organization, and the tax benefits of giving. Complete results:

Desire to support the good work of our organization……75% of respondents
Desire to use the tax benefits resulting from a gift……..75% of respondents
Desire to be unburdened from the hassles and
     expenses of continued ownership………………………..58% of respondents
Desire to generate life income with the gift…………………33% of respondents

Commentary: Organizations that attract good real estate gifts increasingly use a marketing message that appeals to aging property owners looking to get out from under the responsibilities of ownership with as little effort as possible.

4.  In what form are real estate gifts most often coming to you?

Results:

Bequests……………………..64% of respondents
Outright gifts…………………45% of respondents
Retained life estate gifts……36% of respondents
Life income gifts……………..27% of respondents
Fractional interest gifts……..9% of respondents

Commentary: Notable here is the frequency of outright gifts, which tracks with my experience. I find that too often gift officers — especially gift planning officers – make an assumption that the donor will want to give away something less than the whole property, and move right on to discussions of charitable remainder trusts, etc. In fact, many, many donors have the capacity and the motivation to give away properties outright. Also notable is the frequency with which retained life estate gifts are reported. I have always thought such gift structures were way underutilized in relation to the situations where they were appropriate.

5.  What types of property are most frequently being gifted?

Results:

Vacation home……………………………..60% of respondents
Investment/rental residential property……50% of respondents
Primary home………………………………40% of respondents
Commercial property………………………20% of respondents
Farm or ranch………………………………10% of respondents
Industrial property………………………….10% of respondents

Commentary: No surprises here. Vacation homes and other non-primary residential properties are almost always the most promising target for development officers in search of real estate gifts.

Conclusion

Very few good real estate gifts just walk in the door of development offices. The good ones come as a result of a purposeful plan: clarity in gift acceptance policies and procedures, smart and targeted marketing, training gift officers (and others) to initiate real estate conversations with donors, offering a large menu of gift structure options, and having access to the expertise to tailor real estate gift solutions to the particular situations of motivated property owners.

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