Planned Giving: Encouraging People to Leave a Legacy

1. What is Planned Giving?

2. Implementing a Basic Planned Giving Program

3. Making the Ask

4. Marketing Your Planned Giving Program

5. Conclusion & Resources

Those who love libraries have the power to strengthen and protect these institutions today, tomorrow, and beyond by making a planned gift. For libraries of all sizes, planned giving is the future. It is estimated that $20 trillion will be transferred intergenerationally between 2000 and 2020.

Planned giving doesn’t have to be complicated or frightening. For small libraries and libraries without development staff or individuals knowledgeable in planned giving, there are several simple types of planned gifts that can be encouraged and promoted. The information in this section of the Frontline Fundraising Toolkit will focus on the three easiest planned giving options:

  • Outright gifts
  • Life insurance
  • Retirement plans

This toolkit will provide sample language for you to use. While it doesn’t cover every planned giving option or all the tax benefits, it provides definition and language that you should become familiar with. You don’t have to be a planned giving expert to secure planned gifts for your library. Remember - your prospects need to work with their attorney, financial planner, accountant or other professional advisor before finalizing their gift.

What is Planned Giving?    

Planned giving describes a wide variety of giving vehicles that allow donors to give to your library during their lifetimes and/or after their deaths, while meeting their current income needs and providing for their heirs. Planned giving is a form of charitable giving (philanthropy) that involves contributing one's assets through wills and estate plans. A planned gift is a future gift to a library to enhance its mission and work. It’s a lot like planting a tree today so someone can enjoy its shade tomorrow.

The typical planned gift is one that will provide charitable benefit upon the donor’s death (bequest).  A donor may also make a planned gift to the library while alive and receive a charitable deduction immediately, but the library will not receive any funds for its benefit until the donor passes away.

Planned gifts help organizations meet their long-term goals and help provide for responsible and effective financial management. People today are more aware of the personal benefits derived from including libraries and charities in their estate plans.

Planned gifts can allow the donor to:

  • Make a personally significant gift, often larger than he or she thought possible.
  • Enjoy the satisfaction of providing the means for the library to fulfill its mission.
  • Save on gift and estate taxes.
  • Reduce or avoid capital gains taxes.
  • Pass assets on to family members at reduced tax costs.
  • Increase income and effective rate of return.
  • Possibly receive income for life.
  • Leave a legacy without giving up assets.

Planned gifts are often called legacy gifts because so many are created to make an impact for future generations.  It is surprisingly easy to arrange a planned gift. Though more sophisticated gifts will require more care, many methods are quite straightforward. The easiest way to include the library in an estate gift is through a will, also referred to as “a bequest.” The two words can be used interchangeably. 

Why Planned Giving should be a Priority    

Whether your development program is small, large or somewhere in between, planned giving should be a priority for a number of reasons, some of which are:

  • Planned giving offers the greatest opportunity for individuals to make their largest gift to an organization, often referred to as an “ultimate gift,” it can help donors accomplish more through their giving than they may have imagined was possible. Every effort should be made to encourage and facilitate planned gifts with all of your donors.
  • When a continual focus on identifying and cultivating individuals closer to your organization for the purpose of maximizing giving is in place, planned giving conversations should be a natural progression in building the relationship.
  • Planned gifts are among the most cost-effective gifts which can be raised.

Who Makes Planned Gifts?    

The best planned giving prospects are those who have been loyal to the library by consistently giving on an annual basis, attending events, and volunteering. It is not too early to start talking about planned giving.

Planned giving is not just for the elderly! Chances are, they have already completed their wills and estate plans, and it’s hard to get added at the latter part of these individuals’ lives. Instead, think about donors in their 40s and 50s.  They often are just beginning to think about estate planning. 

Here are some obvious - and not so obvious - signs that a person might be a planned giving prospect. Look for these “clues” in your conversations.

  • No children or close relatives
  • Children are doing extremely well in their chosen careers, and prospect doesn’t have to worry about providing for them
  • Widow/widower having outlived a spouse
  • Single females over 65
  • Person’s annual income would not make a large gift possible now, but perhaps a planned gift would.
  • Some of the donor’s/donors’ assets have greatly appreciated, and donor/donors don’t want to pay the capital gains
  • Person has some assets that may bring some heavy taxation
  • Advisor mentioned getting assets out of the estate
  • Person heard that some charities are able to accept gift of property and other items
  • Person heard that there are ways to make a gift and continue to receive an income
  • Person heard about planned giving to other charities & wants to know how that might be beneficial to the library
  • Person read about planned giving, but feels it is way over his or her head – and that it only pertains to people with lots of wealth

Next: Implementing a Basic Planned Giving Program

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