A Beginner's Guide to Planned Giving

"Planned Giving" or "Gift Planning" as it is now being referred to can be a confusing and overwhelming topic for many. This type of charitable giving need not be scary, nor intimidating, however, and with a little education and information - you may find you are ready to begin making a plan for long-term charitable giving.

Gift Planning really just means that you are making a plan for a gift to be made to one or more of your favorite charity organizations after your death or in the later years of your life. For many of us, it is hard to imagine that we will be able to leave a bequest or long-term gift to our favorite charity, but you may be surprised how accessible planned giving can be for the average person.

One of the simplest types of gift planning is a bequest. In addition to your family and personal heirs, it is quite possible to leave a gift to your favorite charity or charities in your will. You can bequest money, personal property items of value (such as an automobile or artwork) or even property to a nonprofit organization. By putting this into a legal document, you can ensure that the organization will see the gift - as opposed to simply asking someone to make sure it happens.

In addition to bequests, there are other ways to give a long-term gift to charity - you may be interested in setting up a foundation, a scholarship fund or an endowment gift to a particular cause. These can be more complicated, but completely doable. The important thing is to contact an attorney specializing in planned gifts and/or contact your local Community Foundation. Most community foundations will help you to set up a family foundation or scholarship fund and you can either set up your own management of the fund or the community foundation can manage it for you. This is a wonderful way to leave a financial legacy if you feel very strongly about a particular cause and would like to spread your gift to various organizations over time. A well-managed fund will grow over the years and the effects of your gift will be felt for years to come.

If you are not interested in setting up your own foundation, scholarship or fund - you can also donate to an existing one as a bequest or gift annuity. You can also leave a bequest to an existing endowment fund, if your favorite charity has one (larger organizations, universities, symphonies, etc. usually have endowment funds). An endowment is a fund that exists apart from operational and annual income for an organization. Gifts and donations are put into the endowment and it is managed by an insured and qualified financial manager (community foundations do a fine job of managing endowments). The principal of the endowment fund is then invested to increase the income and value, only a small percentage of the endowment fund is withdrawn or distributed to the nonprofit organization or program annually. This way the funding source actually grows, while creating an annual funding stream for the organization.

Life insurance policies can be a great way for an average person to leave a gift to a charity. By taking out a life insurance policy and naming your favorite organization as the benefactor, a gift will be made upon your passing to the charity. Your investment will be your monthly or annual cost of the policy and the large gift will go to the organization.

There are other creative (and more complicated) ways to leave a gift to a nonprofit organization. You can research several other possibilities via the National Committee on Planned Giving at www.ncpg.org or Planned Giving Today at www.pgtoday.com, but the best bet would be to contact a lawyer specializing in planned giving, legacy gifts and estate planning. You can find one by contacting your state Bar Association or looking in the phone book yellow pages under "Attorney" (Estate Planning is a good specialization to look for.) This professional will be able to inform you about what is available in your state and what sort of laws will govern your gifting. Whatever you decide to do, it is important to gather as much information as possible, educate yourself, and use a trusted professional to guide you through the process. Leaving a gift to charity is a wonderful, lasting way to support your favorite causes indefinitely.