The Ultimate Guide to Planned Gifts: What Every Nonprofit Needs to Know

Planned gifts are an excellent way for nonprofits to secure their financial future while allowing donors to make meaningful, long-term contributions. But what exactly are planned gifts, and how can your organization incorporate them into its fundraising strategy? This guide will walk you through the essentials, including the different types of planned gifts, their benefits and actionable steps to create a successful planned giving program. 

What Is Planned Giving? 

Planned giving includes donations arranged to be delivered at a later time, often tied to a donor’s estate arrangements. These contributions are often more significant than standard gifts and may consist of property, retirement savings or insurance benefits. Unlike regular donations, these gifts are carefully structured and aim to meet long-term objectives, which makes them an integral part of many fundraising plans. 

This approach allows donors to support causes that are important to them while establishing a meaningful contribution. For nonprofit organizations, these gifts bring consistent financial support and aid in organizing future programs or growth opportunities. 

Difference Between Planned Gifts and Legacy Gifts 

The terms “planned gifts” and “legacy gifts” are often used interchangeably, but they have their own distinct meanings. Planned gifts refer to any donation arranged in advance for future giving, such as gifts of assets, trusts or bequests. 

Legacy gifts, on the other hand, are a subset of planned giving. They refer specifically to donations that are made as part of a donor’s estate, such as bequests in a will. While all legacy gifts are planned gifts, not all planned gifts are legacy gifts. For example, a donor may arrange for a charitable trust to provide income to your nonprofit during their lifetime, which falls under planned giving but is not considered a legacy gift. 

Understanding this distinction can help your nonprofit communicate more effectively with donors and build targeted programs that resonate with their goals. 

Benefits of Planned Giving 

Planned giving offers significant advantages for nonprofits and donors alike. Here’s how: 

Long-Term Financial Stability for Nonprofits 

Planned gifts provide a predictable income stream supporting day-to-day operations and long-term projects. Unlike annual fundraising efforts, planned gifts often arrive at critical moments, helping nonprofits address critical needs or expand their reach. 

Strengthened Relationships with Donors 

Offering planned giving options shows your donors that your nonprofit organization is committed to building long-term partnerships. These programs also allow donors to connect their personal legacy to your mission, deepening their sense of purpose and engagement. 

Tax Advantages for Donors 

Planned gifts can help donors reduce estate taxes, avoid capital gains taxes and optimize their financial legacy. This makes planned giving a very attractive option for donors who want to manage their wealth efficiently. 

Diverse Revenue Streams 

Relying on a single source of funding is risky. Planned gifts diversify your revenue sources, making your nonprofit less vulnerable to economic downturns or shifts in donor behavior. 

Types of Planned Gifts 

Planned gifts come in many forms, allowing donors to contribute based on their financial situation and personal preferences. Here’s a detailed breakdown of the most common types of planned gifts: 

Bequests 

Bequests are one of the simplest and most popular forms of planned giving. Donors include your organization in their will or trust, specifying a fixed amount, percentage of their estate or specific assets to be transferred upon their passing. Bequests are accessible to donors of all financial backgrounds and can be adjusted as circumstances change. 

Charitable Trusts 

Charitable trusts are arrangements where a donor places assets in a trust to benefit your nonprofit. For example, a charitable remainder trust provides income to the donor (or another beneficiary) during their lifetime, with the remaining balance going to your organization. These trusts can be tailored to fit the donor’s financial goals and provide a reliable income stream for your nonprofit. 

Real Estate 

Gifts of real estate, such as homes, commercial properties or land, can significantly boost your nonprofit’s resources. Donors can give property outright or establish a retained life estate, where they continue to use the property during their lifetime while committing ownership to your organization in the future. Real estate gifts often provide substantial tax benefits for donors. 

Valuable Assets 

Donors can also contribute valuable tangible assets like artwork, jewelry or antiques. These gifts can be auctioned or sold; the proceeds support your programs. Including non-cash assets in your planned giving program allows donors with unique holdings to contribute in a meaningful way. 

Life Insurance 

Naming your nonprofit as a life insurance policy beneficiary is another common option for planned giving. Donors can either transfer ownership of an existing policy to your organization or purchase a new one with your nonprofit as the beneficiary. These contributions often allow donors to make a more significant impact than they might otherwise afford. 

Retirement Plans 

Donors can designate your nonprofit as the beneficiary of their retirement accounts, such as IRAs, 401(k)s or pensions. This approach is particularly tax-efficient because it lets donors avoid the — often hefty — taxes that their heirs might otherwise face on these funds. 

Endowments 

Endowments are contributions placed into investments, with the returns used to fund your nonprofit’s activities over time. Donors who give to an endowment create a gift that continues to make an impact far into the future. For nonprofits, these planned gifts offer reliable revenue and the opportunity to focus on long-term goals and projects. 

How To Create a Planned Giving Program in 7 Steps

Building a successful planned giving program requires much preparation and a clear, organized strategy. Whether you’re launching a new initiative or improving on an existing one, the following steps will help you move forward successfully. 

Step 1: Build Your Team 

A strong planned giving program begins with the right team. Involve fundraising professionals, legal advisors and board members who understand the mechanics of planned giving. Provide training so everyone is equipped to discuss these options confidently with donors. 

Step 2: Identify Resources and Potential Donors 

Start by assessing your current donor base. Look for long-term supporters who have consistently contributed to your organization. Tools like nonprofit prospect research can help you identify individuals who are most likely to consider planned giving. Pay attention to donors who express interest in leaving a legacy or who have connections to your mission. 

Step 3: Determine Policies and Procedures 

Defining clear policies is crucial for efficiently managing planned gifts. Create guidelines for accepting various types of contributions, including real estate and physical assets and specify any restrictions. For instance, will your organization take property that has an existing mortgage? These rules safeguard your nonprofit from potential risks and promote consistent, transparent handling of donations. 

Also, establish procedures for assessing the value of gifts, particularly non-cash assets, and make sure you comply with all legal and tax regulations. Collaborating with financial and legal experts can simplify these processes and help avoid expensive errors. 

Step 4: Build a Marketing Strategy 

Promoting your planned giving program is critical to its success. Many donors are unfamiliar with planned giving options, so your marketing efforts should educate and inspire them to take action (give!). Highlight the various types of planned gifts and how they align with your mission. 

Your strategy could include: 

• Targeted emails: Send personalized messages to long-term donors explaining planned giving opportunities. 
• Website content: Create a dedicated webpage with detailed information about your planned giving program. Highlight donor stories or testimonials to inspire others. 
• Print materials: Distribute brochures or flyers outlining the benefits of planned giving at events. 
• Social media campaigns: Use platforms like Facebook or LinkedIn to share posts about legacy giving and its impact. 

Integrating planned giving into your broader digital marketing strategy can help you reach potential donors where they’re already engaged. 

Step 5: Launch Outreach and Collaborations 

A strong planned giving program relies on proactive outreach. Begin conversations with donors who have a history of sustained support. These discussions can often be sensitive, so approach them with care and focus on the donor’s values and goals. 

Consider collaborating with estate planners, financial advisors or attorneys who can refer you to clients interested in charitable giving. Hosting informational sessions or workshops with these professionals can introduce your program to potential donors in a trusted environment. 

Step 6: Acknowledgements and Donor Appreciation 

Recognizing donors who commit to planned gifts is key to building lasting relationships. Establish a system for acknowledging their contributions, such as personalized thank-you letters or exclusive updates about your organization’s progress. 

Many nonprofits create legacy societies to honor planned gift donors. These groups provide public recognition, such as listing names on a donor wall or in an annual report and foster a sense of community among supporters. 

Step 7: Track and Monitor Progress, Pivot As Needed 

Like any fundraising initiative, a planned giving program requires ongoing evaluation. Use donor management software to track pledges, monitor gift types and analyze trends. If a particular outreach strategy isn’t resonating, adjust your approach. 

Set clear metrics for success, like the number of new planned gifts secured each year, and make sure you review your program’s performance regularly. Tools like donor databases can make this process more manageable as they provide you with insights into donor behavior and engagement levels. 

Launch Your Planned Giving Program With WildApricot 

Developing a planned giving program may seem complex, but having the right tools will make the process much more manageable. WildApricot (that’s us!) provides a wide range of resources to help your nonprofit organization effectively oversee its planned giving efforts. 

Automate Communications With an Email and Contact Database 

Managing communications with potential planned gift donors is easier when you have the right tools. WildApricot’s email and contact database allows you to segment your audience, send personalized messages and automate follow-ups. This helps you stay connected with donors and nurture relationships over time. 

Track and Manage Current and Prospective Donors With a Donor Database 

A donor database is crucial for tracking planned gifts and identifying potential contributors. WildApricot’s platform makes it simple to manage donor information, record pledges and generate reports. These insights help you target your outreach efforts and measure the success of your program. 

Build a Dedicated Webpage for Your Planned Giving Program 

Your website is one of the most effective tools for promoting planned gifts. With WildApricot’s website builder, you can create a dedicated webpage that explains planned giving options, highlights donor stories and includes an easy-to-use contact form for inquiries. 

Securely Process Monetary Bequests With a Payment Processor 

If your planned giving program has options for current gifts, like outright donations or life insurance transfers, WildApricot’s payment processor guarantees secure transactions. This feature simplifies the process for donors while providing peace of mind. 

Start Building Your Legacy Today 

Planned gifts are a valuable way for nonprofits to establish financial stability while allowing donors to make a lasting impact. By understanding the various types of planned gifts, their advantages and how to develop an effective program, your organization can foster lasting connections with donors and maintain long-term growth. 

With tools like those offered by WildApricot, managing your planned giving program becomes easier and more efficient. Whether you’re communicating with donors, tracking contributions or promoting your program online, WildApricot can help you every step of the way. 

Ready to take your nonprofit’s fundraising strategy to the next level? Start your 60-day free trial with WildApricot today and discover how simple it can be to launch and grow your planned giving program.