By Nathan Stelter, President of The Stelter Company

April is Financial Literacy Month (likely timed with a certain tax day), and it means a chance to be part of financial planning conversations. The national holiday grew from a desire to educate kids about financial literacy, but the concepts apply to all of us, including nonprofit donors. This month offers a chance to educate donors about the power—and potential—of their assets.

The whole notion of financial literacy has gained steam as consumer trends have shown that too many people are not making headway toward financial security. Consumer debt is experiencing record increases. We should expect the Fed to increase interest rates (for the first time since 2018).

It’s an important time to discuss financial competence. It’s an especially valid time to talk about planned giving concepts and the power donors have not just to give now—always helpful as we experience rising costs of doing business—but for the long-term.

What are Examples of Financial Literacy?

Financial literacy means learning—and learning early—about:

  • Planning a budget.
  • Making smart spending decisions.
  • Mapping out a long-term savings plan.
  • Understanding how our tax system works.
  • Judging insurance and investment options.

Charitable giving belongs on this list. Many people would be much wiser and more confident in their desire to give if we could help them:

  • Experience the civic value of giving.
  • Learn how to recognize a well-run nonprofit.
  • Define their values and passions and determine how nonprofit involvement can help them live out those values.
  • Understand how and when a gift or planned giving decision may be right for them.


A Financial Alphabet Soup

If fundraisers and marketers are going to talk about financial literacy, we need to be financially literate ourselves. Consider this potential gift scenario:

A nonprofit is working with a donor who is considering using their RMD to make a QCD from their IRA next year. In a recent Zoom meeting, the donor indicated that they are concerned about market fluctuations and may prefer secure income for life, which means establishing a CGA or CRT. But with interest rates low, they could decide to establish a CLT instead. Or perhaps they’ll decide to keep it simple and recommend a grant from their DAF.

Whew! That’s a lot to take in. Now let’s figure out what that all means. Download this handy chart as a guide to the different giving opportunities that most nonprofits classify as “planned giving.”

Charitable Giving + Financial Planning

Charitable dollars can fit into any person’s financial plan, even if inflation is here. From the family welcoming their first child to those getting ready for retirement, the more we understand a prospect’s financial and charitable goals, the better we can connect with them.