What is Planned Giving?

Planned giving (or "charitable gift planning") refers to the process of making a charitable gift of estate assets to one or more nonprofit organizations, a gift that requires consideration and planning in light of the donor's overall estate plan.

Such gifts usually include legal documents and often require the assistance of a qualified professional advisor to complete. Because of the size and potential impact of such gifts, a donor should consult with his or her professional advisors before completing the process.

Usually Deferred

Planned gifts are usually deferred, meaning they are arranged now and fulfilled later. For example, a person could include a provision in his or her will to make a bequest to a charitable organization. That arrangement would be a "planned" gift.

Or, a person might establish a charitable trust that could provide income to the donor (or someone else) for a period of time (usually for life). After this gift-deferral period, the trust would "mature" and the remaining assets (corpus) would go to one or more charities. This is called a charitable remainder trust.

Another kind of planning device allows a donor to place assets in a trust that pays out income to charity for a period of years. Then, when this trust "matures," whatever is left goes back to the donor or to someone else stipulated by the donor. This is called a charitable lead trust.

Another deferred gift instrument is the charitable gift annuity. This is popular with many donors because it represents a life-time contract between the donor and a charity, and because it is relatively simple to understand and establish. For example, a donor gives $25,000 to a charity and receives, in return, a set amount of money every year for the rest of his or her life. The donor also has the choice of naming someone else as the annuitant to receive the annuity payments.

Often Irrevocable

Planned gifts can be revocable (as in a will bequest) or irrevocable (as in a charitable gift annuity). Even though a deferred gift may not actually benefit a charity for many years, the gift arrangement can generate an immediate income tax charitable deduction because the future gift has been established and cannot be recalled. On the other hand, revocable gifts do not provide immediate tax benefits.

There are numerous planned giving vehicles and combinations that allow a gift planner to tailor-make a gift plan. Indeed, one the of truly fulfilling aspects of charitable gift planning is the adventure of helping donors find and, in cooperation with the appropriate advisors, construct the best plan for everyone concerned.

Planned Giving Officers

Nonprofit organizations often employ planned giving officers to work with donors who desire to make deferred or major current gifts. Sometimes these planned giving officers (PGOs) are employed full time in this specialized area of fund raising and sometimes they wear several hats. For example, it is not uncommon for a director of development of a smaller charitable organization to be responsible for the planned giving program as well as all other fund-raising efforts.

Many larger charities, including educational institutions and hospitals, have more than one person dedicated to charitable gift planning. Some organizations even have field officers who live in various parts of the country to work with area donors and prospects.

A person heading a planned giving department might carry one of several titles: director of planned giving, director of charitable gift planning, director of gift and estate planning, or director of trusts and estates.

Professional Advisors

A number of professional advisors are also involved in the charitable gift-planning field. Estate-planning attorneys are often called upon to advise and create documents relating to charitable gifts. Certified life insurance professionals (CLUs), certified public accountants (CPAs), trust officers (CTFAs) and certified financial planners (CFPs) also become involved from time to time. Together, the planned giving officer and the donor's professional advisors comprise the gift-planning team.

The National Committee on Planned Giving (headquartered in Indianapolis, Indiana) is the primary national association linking planned giving officers and allied professionals throughout the United States. Today, there are more than 120 planned giving councils related to NCPG throughout the United States representing some 11,000 gift planners. About 30 percent of these planners are from the for-profit sector. For the council near you, contact NCPG at 317-269-6274.

A similar organization exists in Canada, the Canadian Association of Gift Planners. It represents more than 1,000 gift planners throughout the country. The contact number is 888-430-9494.

New to Planned Giving?

This may be the first time you have heard the terms, "planned giving" or "deferred giving" or charitable gift planning." As you explore this web site and dip into the suggested resources, your familiarity with these terms and concepts will grow quickly. In fact, you just may find yourself wanting to become more involved in this engaging and rewarding area as a volunteer or as a paid staff member. You might even want to make a planned gift.

Thank you for visiting our site and for your interest in planned giving.