A planned giving program, sometimes referred to as gift planning, is a great way for individuals to maximize the donations they’re able to make to non-profit and/or charitable organizations, either during their lifetime or following their death. In some cases, individuals engage in planned giving as a way to pass along wealth and assets to heirs, but it is more commonly used to make charitable contributions that are greater than they might otherwise make. And in many cases, both the named beneficiaries and the donors receive benefits from such arrangements. If planned correctly, taxation can be minimized on both sides, thanks to exemption from estate tax (for gifts granted following the death of the donor), as well as tax deductions during the donor’s lifetime. But how do you set up such a program for your organization?
As a non-profit or charity organization, you want to make it easy for donors to contribute by any means necessary. And the best way to do that is to offer a variety of avenues for donations. A planned giving program not only allows for several forms of contribution that donors may not be familiar with, but it can also be to the benefit of donors in various ways. First you need to understand how planned giving works and what it can do for your organization. Planned giving could center on contributions from retirement accounts or it could come in the form of benefits from life insurance policies. While most people are familiar with the concept of leaving money to charity in their will, they may not have considered these other end-of-life options for contributing to their favorite charity (i.e. yours).
Funds can also be granted through a trust structure or they can come from the sale of stock and bonds, just for example. And contributions don’t have to be monetary – they could also be in the form of assets in lieu of cash. The best part about a planned giving program is that it is designed to benefit both parties, alleviating the amount of taxation gift recipients face while also providing tax deductions for donors that they might not otherwise receive.
It is important that you understand the finer points of a planned giving program for a couple of reasons. First and foremost, you want to be able to explain the program to donors in laymen’s terms so that they can see the benefits inherent to choosing this option for contributions. In addition, however, you will likely want to hire fundraising professionals that are familiar with planned giving programs so that they can promote this option to donors. When you better understand how the program works, you can make sure the individuals you hire are qualified to pass information along to both current and prospective donors.
Of course, there are reputable businesses like Sharpe Group that can help to ensure you find the right ways to market and promote such a program. But you will first have to take the time to set up a structured means of gift acceptance so that you are prepared to deal with the various types of gifts you might receive as a nonprofit organization. And you need to have appropriate people and policies in place to manage and administrate your program. But with the right knowledge and people in place, you should be able to create a planned giving program that works for your organization and your donors.