Learn the benefits of planned giving for your nonprofit and launch your program confidently using our step-by-step guide.
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Planned gifts are some of the largest nonprofit contributions donors ever make. In fact, in 2022 alone, planned giving totaled an estimated $45.6 billion. 🤯
But many nonprofits hold off on planned giving programs—and miss out on an important opportunity—because of the sensitive subject matter and confusing terminology.
We’re here to help. Below, we’ll break down the common types of planned gifts, the benefits of planned giving, and exactly how you can get started.
While many myths about planned giving persist in the nonprofit sector, the straightforward planned giving definition is this: the act of a donor arranging a charitable gift that’s given to your nonprofit organization at a future date, typically included in a will and granted after the donor’s death.
In essence, nonprofit planned giving is a win-win approach to philanthropy that lets your donors leave a legacy and helps secure your nonprofit’s future at the same time.
While money is the most common form of planned giving, there are many kinds of planned gifts that donors can take advantage of during their lifetime like:
Planned gifts come in many shapes and sizes. Mainly, though, they fall into three categories:
Now, let’s break down those categories a bit further with some examples of planned giving programs to visualize the possibilities for your donors.
A bequest—one of the best planned giving campaign ideas—is a gift that’s left to a person or organization through a will. Charitable bequests are often in the form of:
💰Type of planned gift: Deferred
💛 Great for: Elderly donors in the process of finalizing their wills and estate plans
Donors can name your nonprofit as the beneficiary of their retirement plans—like 401(k)s, IRAs, and pensions—whether it’s a portion or the full fund. Your nonprofit receives the donation, and donors avoid income and estate taxes on that amount.
💰Type of planned gift: Deferred
💛 Great for: Donors who don’t need the retirement income and want tax benefits
Similarly, donors can name your nonprofit as the beneficiary of their life insurance policy and receive tax advantages on the remaining amount.
💰Type of planned gift: Deferred
💛 Great for: Donors who have a paid-up insurance policy and don’t have any personal beneficiaries that need the funds.
With a charitable gift annuity, your donor transfers cash or stock to your nonprofit in exchange for fixed payments for life. After the donor passes away, you’ll use the remaining funds for your nonprofit.
💰Type of planned gift: Planned gifts that pay donors back
💛 Great for: Donors who want to give a large gift but need some income now
A pooled income fund combines gifts from multiple donors that support your nonprofit. You’ll invest their contributions and pay dividends (a slice of the profits) to your donors for the rest of their lives. As each donor passes away, your nonprofit receives a gift in the amount of that donor’s share of the fund.
💰Type of planned gift: Planned gifts that pay donors back
💛 Great for: Donors who are passionate about investing
With a retained life estate gift, your donor transfers the deed for a property to your nonprofit, but they have the right to use it or live near it for a period of time. They’ll also cover any property expenses or maintenance costs during their lifetime. In exchange, they receive a tax deduction for the property.
💰Type of planned gift: Planned gifts that let donors use their assets
💛 Great for: Donors who want to donate property but keep using it for a period of time
Despite how complicated they might seem, planned gifts are beneficial for everyone—both your nonprofit and your donors.
Now sure how to start your planned giving program? Here are five key steps to start off on the right foot.
Weigh the benefits and costs of the planned giving strategies we discussed above and determine which options work best for you and your donors. Once you’ve decided,
💡Pro tip: Mention in your policy that your team will discuss each potential gift before it’s accepted. That way, you aren’t stuck accepting gifts or terms you aren’t comfortable with.
Planned gifts often come from older donors who have been giving long-term, but the target demographic will look different for every nonprofit. Some common planned givers to look out for are:
Save time on research and draw out more insights using your CRM and planned giving software like DonorSearch for more extensive wealth screening.
Donors are weighing what to leave behind for their families and the other meaningful organizations in their lives. If you want to be a candidate, you have to build a strong donor retention strategy.
Create multiple activities and touch points with donors by regularly…
The bottom line: Don’t just treat donors like ATMs. Creating opportunities for your supporters to see your work in action and feel like part of the solution, without any solicitations.
Finally, use the information you gathered in step three, the research stage, to plan your program launch and multichannel marketing tactics through:
No matter what your giving strategy is, be sure to keep a few of these best practices in mind:
Planned giving is a win-win: These major gifts allow organizations to keep making the world a better place, and donors get to rest easy knowing they’ve made a tremendous difference.
With Givebutter, nonprofits can streamline and organize all of their planned giving efforts. With a free CRM that offers custom filters and segments—and a full suite of marketing and engagement tools—nonprofits can reach the right people at the right time and make planned giving a whole lot simpler.
