Planned Giving 101

What is “planned giving”?

A “planned gift” is simply one that does not happen immediately. Current or planned gifts can be made to an endowment.

What is “legacy giving”?

A “legacy gift” is a type of planned gift that occurs upon the donor’s death via a bequest in a will or trust, or through a beneficiary designation.

Why is planned giving important?

To attract all types of gifts—planned or current—nonprofit organizations implement stewardship strategies to build long-term relationships with donors. Planned giving strategies are essential for nonprofits because planned gifts—especially bequests—tend to be dramatically larger than a donor’s typical annual gifts. Indeed, the average charitable bequest is significantly larger than a donor’s annual gift.

What are examples of types of planned gifts?

Planned gifts include legacy gifts made through a donor’s bequest in a will, trust, or beneficiary designation on an IRA or life insurance policy. Planned gifts also include charitable remainder trusts, gifts of real estate, gifts of closely-held stock, and gifts of other complex assets.

How quickly can nonprofits expect to see results from our planned giving strategies?

The answer is that planned giving is the long game! But that is not all bad. While planned gifts often take many years to be realized, they represent the largest and most transformational gifts a nonprofit will ever receive, making early and consistent stewardship essential. Plus, donors typically make their estate plans well before the end of life, so nonprofits that build relationships today are the ones written into wills and beneficiary designations tomorrow. 

What is the opportunity cost of implementing a planned giving program?

Actually, there can be opportunity savings for nonprofits by implementing a planned giving program. Planned giving programs work best when they are not a one-off, or an “extra” thing the organization is doing. Rather, planned giving strategies that are integrated into ongoing donor stewardship activities to attract all types of gifts can actually improve overall return on investment of development resources. Indeed, donors who commit to a bequest substantially increase their annual giving, often by more than 75% compared to similar donors who have not made a bequest commitment. Planned giving commitments can lead to deeper donor engagement and greater yearly generosity, making planned giving not only a future revenue source but also a driver of increased current contributions.