What is Planned Giving?

Planned giving — also known as gift planning or legacy giving — enables philanthropic individuals to make larger charitable contributions than they could typically afford through ordinary income sources, such as salaries, wages, commissions, bonuses, rents, royalties, or dividends.

Unlike one-time cash donations, planned gifts are often integrated into a donor’s broader financial or estate plan. Some gift plans even provide the donor with lifetime income in exchange for their generosity. Other planned gifts use estate and tax planning strategies to maximize the donor’s charitable impact while minimizing taxes and preserving assets for heirs.

By definition, a planned gift is any major gift, made during a donor’s lifetime or through their estate, that is part of their overall financial planning. These gifts often involve contributions of:

• Cash
• Appreciated securities (stocks and bonds)
• Real estate
• Life insurance policies
• Personal property (artwork, valuable collectibles, etc.)
• Business or partnership interests
• Retirement plan assets

In contrast, annual fund gifts, membership dues, or small recurring donations are made from a donor’s discretionary income and are typically not considered part of a planned giving strategy.

Whether a donor contributes cash, appreciated assets, real estate, or a retirement plan, the advantages of funding a planned gift can be significant — offering potential tax benefits, income streams, and the ability to leave a lasting legacy.

If you are a smaller charity and want to get into the planned giving business affordably, planned gifts offer one of the most cost-effective ways to build sustainable, long-term support for your mission. You don’t need to be a large institution to benefit.

Types of Planned Gifts

Although planned gifts have existed for generations, their perceived complexity often made them inaccessible to the general public — until 2000.

That year, Viken Mikaelian and John Foster, founders of the pioneering planned giving marketing firm VirtualGiving.com, revolutionized the field by bringing planned giving to the Internet. Their approach simplified planned giving for nonprofits and donors alike, making it practical, approachable, and scalable.

To make the concept more understandable, they organized planned gifts into three clear, donor-friendly categories:

1. Simple Gifts (“Gifts Anyone Can Make”)

These include straightforward contributions that do not affect the donor’s current income or financial situation, such as:

• Bequests
• Stock and Appreciated Securities
• Life Insurance – Lifetime Gifts
• Life Insurance – Estate Distributions
• Business Interests, Closely Held Stock, Partnerships
• Tangible Personal Property
• Intellectual Rights
• Real Estate
• Retirement Plan – Lifetime Gifts
• Retirement Plan – Estate Distributions
• Donor Advised Funds

2. Gifts That Pay You Back (Life-Income Gifts)

These types of gifts provide donors (or their loved ones) with income for life or a set period of time, such as:

• Charitable Gift Annuity: Immediate
• Charitable Gift Annuity: Deferred
• Charitable Gift Annuity: Flexible Payment
• Remainder Annuity Trust
• Remainder Unitrust
• Flip Unitrust

These options can offer donors fixed or variable income payments, often with favorable tax advantages.

3. Gifts That Protect Assets

These gift vehicles allow donors to make a meaningful charitable contribution while preserving or even enhancing their own financial security, such as:

• Charitable Bargain Sale
• Charitable Lead Trust
• Retained Life Estate

Each category offers donors a way to support causes they care about while also achieving personal financial goals.

Ready to Launch Your Planned Giving Program?

If you are a smaller nonprofit or charity looking to start a planned giving program affordably, click here to learn more.