What is Planned Giving?
Planned Giving is the process of arranging a contribution that will be allocated at a future date. Most often granted once the donor has passed away, planned gifts are usually donated through a will or trust.
Often alternately known as legacy programs, Planned Giving programs are a means of cultivating strong relationships with planned gift donors and supporting them throughout the complicated process of enacting a planned gift. Planned Giving programs are unique in the world of nonprofit fundraising because of the length of time involved in the gift process, and the fact that multiple contacts beyond the donor themselves are often involved, such as lawyers, estate planners, and other beneficiaries. Such programs involve complicated, long-term efforts to build relationships with donors and manage the legal and financial details of the gift.
The type of relationship and information management required of Planned Giving Officers varies depending on the type of planned gift in question. Planned Giving most often takes one of four forms, bequests, charitable gift annuities, trusts, and pooled income funds.
90% of planned gifts take the form of bequests; legacy gifts left to a nonprofit after a donor has passed away, for which the donation process is relatively straightforward. A donor can make a charitable bequest via a trust, will, or estate plan.
Charitable bequests usually fall into three categories:
- Specific Amount: Just as it sounds, in these cases a donor allocates an exact set of funds to an organization.
- Remainder: In this case, a donor can choose to have a nonprofit receive any money left after all other bequests are paid out.
- Percentage: A donor can also choose to gift your organization a set percentage of his or her total wealth.
No matter which category of charitable bequest a planned gift comes from, the gift process for a bequest is fairly straightforward. However, it often takes years of cultivation and relationship building before a donor is ready to commit to a bequest.