Planned Giving
Planned giving, or charitable giving financial planning, is any gift made as part of a donor’s overall financial or estate planning. These gifts can be made during a donor’s lifetime or upon their passing. They can be as simple as a bequest in a will or as complex as a charitable gift annuity.
There are many options for planned giving, but a few of the most common are:
- Bequests: A bequest is a gift made through a will or a revocable trust, which takes effect after the donor has passed. It’s a popular option due its simplicity to set up, and it costs nothing during the donor’s life.
- IRA Charitable Rollover: If you are 70½ or older, you can use your IRA to fulfill your charitable goals, avoid paying income taxes and still meet your Required Minimum Distribution.
- Charitable Gift Annuity: This planning tool allows you to transfer an asset to charity and in return, you become eligible for tax deductions and the charity agrees to make payments to you for life, providing you with a fixed income stream.
- Donor advised funds: With a donor advised fund, you can make charitable gift recommendations during your lifetime and distribute gifts to numerous charities. When you pass away, your children can carry on your legacy of giving.
- Beneficiary Designation: You can designate a nonprofit as the beneficiary of your bank account, life insurance policy, IRA, 401(k), 403(b) or other pension account. With a beneficiary designation, you maintain control of your assets during your lifetime and can potentially avoid heavy taxes.
