Planned Giving

What is a Planned Gift?

Unlike an outright gift that provides a charity full benefit upon receipt (such as a gift to a parish endowment), a planned gift defers the use of transferred assets until the death of a donor, or until the end of a specified period of time. In return, donors and their families may receive important estate and income tax benefits, and, depending upon their gift, an attractive annual income stream for their life or the life of a secondary beneficiary. Another term commonly used for a planned gift is deferred gift.

Planned gifts can be either revocable or irrevocable.

Revocable gifts are gifts that can be changed by a donor. Funds are not available to the charity until death, so these gifts enable a donor to preserve the potential need for the asset during their lifetime. Yet, because they benefit a charity in the future and often provide attractive estate tax benefits, they serve as an excellent philanthropic tool. The following revocable options may be used for a gift to the Foundation:

  • Bequests by will
  • Gifts from IRAs and pension plans
  • Life insurance, bank accounts

A revocable gift in the form of a bequest or other testamentary arrangement can help to assist a worthy beneficiary and provide numerous benefits to a donor. There are many ways to benefit a charity through an estate plan without having to part with assets a person feels may be needed in the future for personal or family responsibilities.

The most common means of remembering a charity, the outright bequest is a provision in a will or living trust that directs that a portion of an estate should be transferred to charity at a time subsequent to death. There are many types of outright bequests, including:

  • Specific Bequest: This is the most popular type of charitable bequest. Simply leave a specific dollar amount (e.g., $25,000) to a charity (i.e. the Foundation).
  • Percentage Bequest: Direct that a certain percentage of an estate goes to charity (i.e. 15 percent). Regardless of the size of an estate at death (after payment of debts, expenses and taxes), a donor will know that a portion of their estate will benefit the named charity.
  • Residual Bequest: After all other specific bequests, taxes and expenses have been paid, charity receives all or a portion of what remains - the residual.
  • Contingent Bequest: A charity is named the contingent or next beneficiary should the primary beneficiary (spouse, child, friend) pre-decease a person.

Irrevocable gifts can not be rescinded, and are immediate transfers of assets for the charity's use at some defined future point in time, or at the death of the donor or secondary beneficiary. In return, in most cases, the donor will receive an immediate income tax deduction, an annual income stream, and favorable capital gains and estate tax benefits. The following irrevocable options are commonly available from charitable organizations, including the Foundation:

  • Charitable gift annuities
  • Charitable remainder trusts
  • Charitable lead trusts

Tax deduction: An irrevocable planned gift provides benefits for both the donor and the charity. Therefore, in the year of the gift, the donor may itemize a deduction on his or her income taxes for only the portion of the gift eventually accruing to the beneficiary (the remainder value).

Information contained in this Website should not be considered legal, accounting, or other professional advice. Individuals considering a planned gift to the Foundation or other charity should consult with their financial advisor.