Planned Giving: A Practical Guide for Small Nonprofits

Planned giving is any gift arranged now and received later, usually on the donor’s death. It is the largest single source of transformational gifts for small organizations, and most of them do nothing about it because the published advice starts in the wrong place.

Nearly every guide on this subject opens with charitable remainder trusts and gift annuities. Those are real instruments and almost none of the organizations reading about them should be offering either. This page starts with what actually works at your size.

The two that matter, and the five that mostly do not

The first two are free, require no professional infrastructure, and account for the overwhelming majority of planned gifts American nonprofits actually receive. Giving USA reports bequests separately from individual giving precisely because the category is large enough to matter on its own.

An organization that does nothing but ask for bequests, record the answers and thank the people who say yes has captured most of the available opportunity. One that spends a year investigating gift annuities has usually captured none of it.

The gift annuity warning

Charitable gift annuities come up constantly and deserve a direct answer. A CGA is a contract in which you accept a sum and promise fixed payments to the donor for the rest of their life. That promise is a liability, and it does not go away if your investments underperform or the donor lives to 103.

Offering them requires registration in several states, reserve funds held against the obligation, actuarial administration, and the organizational stability to honour payments for decades. For most nonprofits the correct answer is no, or to work through a community foundation that already runs the programme.

If a donor raises a CGA with you, the right response is enthusiasm plus a referral to their own advisor and to a community foundation. You lose nothing. The alternative is a thirty year obligation entered into by an organization that has not modelled it.

Qualified charitable distributions, which are money now

The QCD is the exception to planned giving being about the future. It arrives immediately, and it is the most under-asked gift in the sector.

A donor aged 70 and a half or over can direct a distribution from an IRA straight to a qualified charity. The IRS confirms both the age threshold and that the payment must go directly from the IRA to the charity rather than through the donor’s hands. Because it is never included in taxable income, it can be worth more to the donor than an ordinary gift they would deduct, and it can satisfy part or all of a required minimum distribution.

The annual limit is indexed for inflation. Multiple tax advisory sources put it at $111,000 per individual for 2026, up from $108,000 in 2025, with a separate one-time election of $55,000 for a split-interest entity. We could not confirm the 2026 figures on an IRS page at the date this was checked, only the age threshold and the direct-transfer requirement. Treat the dollar amounts as indicative and confirm before advising anyone, because a donor may act on this.

Two practical points. The cheque comes from the custodian, so it can arrive with no donor name attached and get receipted to Fidelity. Watch for that. And the acknowledgement must state that no goods or services were provided, per the ordinary substantiation rules.

How to ask, which is not how you ask for anything else

A bequest ask is not a solicitation. Nobody is being asked for money, and treating it as a gift conversation makes it awkward for everyone.

What works is asking a question about intention rather than amount. Have you already included a charity in your will. Would you consider including us. Would you be willing to tell us if you have.

Notice what is missing: any number. You are not negotiating a sum, you are asking to be remembered, and the amount is neither knowable nor any of your business at this stage.

Who to ask matters more than how. The strongest predictor of a bequest is not wealth, it is loyalty. Long consecutive giving histories, modest amounts, sustained over years. A donor who has given $50 every year for fourteen years is a better legacy prospect than one who gave $10,000 once, and most organizations have this exactly backwards. Sort your file by consecutive years of giving and start there.

Recording it without misleading yourself

An intention is not a gift. It is revocable, unquantified, and may be decades away.

Boards get excited by intention totals. Present them as a separate figure with a plain caveat, never blended into a fundraising result. An organization that budgets against expected bequests will eventually have a very difficult year.

The legacy society, which is the whole programme

Recognition is what converts a private decision into a repeatable one. A legacy society costs almost nothing: a name, a list, an annual lunch or letter, and a mention in the annual report for members who want it.

Its real function is not thanking. It is making the behaviour visible. Donors who see that other people like them have done this are substantially more likely to consider it, and a society gives you a legitimate reason to talk about bequests every year without asking anyone for anything.

Ask members if you may say publicly that they have joined. Many will agree, and a name attached to the idea does more than any brochure.

One practical note on finding the people to have those conversations with. Sorting the file by consecutive years of giving is a query, not a project, and most CRMs will do it if you can work out how. If yours makes that hard, tools that answer questions about your donor data in plain language will produce the same list in a sentence: Gratefully is the most reachable at $4,800 a year. The list matters far more than how you obtain it, and a manual export once a year is a perfectly respectable way to get it.

What to actually put in place

Five things, none of which require a consultant.

Suggested bequest wording on your website, with your legal name and EIN. Donors’ attorneys need the exact name, and getting it wrong causes real problems in probate.

A tick box on every response form and online donation page. “I have included [organization] in my will” and “Please send me information about leaving a gift in my will.” This single change surfaces more intentions than any campaign, because a meaningful number of your donors have already done it and never told you.

A gift acceptance policy covering what you will and will not accept, particularly real property, and who decides. Write it before someone offers you a house.

A place in the database to record intentions, distinct from gifts.

One conversation a month. Twelve legacy conversations a year with long-tenured donors will do more than any amount of collateral, and it fits inside the portfolio arithmetic on our moves management page.

Two related efforts worth keeping distinct. A capital campaign is time-limited and asks for money now; planned giving is open-ended and asks to be remembered. Campaigns frequently surface legacy conversations as a side effect, because the people you talk to about a building are the people who care most. See capital campaigns.

What this is worth

Planned giving is slow, and organizations abandon it because nothing happens for years. Two things are worth holding onto while that is true.

The gifts are typically far larger than anything the donor gave in life, because they come from assets rather than income. And the pipeline compounds: intentions recorded this year mature over decades, so a programme started now is producing income long after the person who started it has moved on.

The organizations receiving transformational bequests today are the ones that asked ten and twenty years ago. That is the entire argument, and it is why the tick box matters more than the brochure.

Questions people ask

What is planned giving?

Any charitable gift arranged now and received later, most often on the donor's death. The common forms are a bequest in a will, naming a charity as beneficiary of a retirement account or life insurance policy, a charitable gift annuity, or a charitable remainder trust.

The useful distinction is between the two that cost nothing to offer, bequests and beneficiary designations, and the complex instruments that require legal and financial infrastructure. The first two account for the overwhelming majority of planned gifts American nonprofits actually receive.

Also called legacy giving or gift planning. The terms are interchangeable in practice.

How do you start a planned giving programme?

Five things, none of which need a consultant. Suggested bequest wording on your website with your exact legal name and EIN. A tick box on response forms and the online donation page saying 'I have included you in my will'. A gift acceptance policy. Somewhere in the database to record intentions separately from gifts. And one legacy conversation a month with a long-tenured donor.

The tick box is the highest return item on that list. A meaningful number of your donors have already named you and have never mentioned it, and you cannot steward a gift you do not know exists.

Do not start with gift annuities or trusts. They are where programmes go to stall.

Who is most likely to leave a bequest?

Loyal donors, not wealthy ones, and most organizations have this backwards.

The strongest predictor is consecutive years of giving. Someone who has given a modest amount every year for over a decade is a better legacy prospect than someone who made one large gift. Frequency and duration signal identification with the organization, and a bequest is an act of identification rather than a transaction.

Other indicators worth noting: no children, long volunteer involvement, board or committee service, and having told you a personal story about why the work matters. Sort your file by consecutive years of giving and start at the top.

Should we offer charitable gift annuities?

For most nonprofits, no. A gift annuity is a contract obliging you to make fixed payments to the donor for the rest of their life, and that obligation survives poor investment returns and unexpected longevity.

Offering them requires registration in multiple states, reserves held against the liability, actuarial administration and the organizational stability to pay out for decades. It is a serious undertaking for an established organization with real finance capacity, and a genuine risk for anyone smaller.

If a donor raises the idea, refer them to their own advisor and to a community foundation that already operates a programme. You lose nothing and take on none of the liability.

What is a qualified charitable distribution?

A direct transfer from an IRA to a qualified charity by a donor aged 70 and a half or over. The IRS specifies that it must be paid directly from the IRA to the charity, and because it is excluded from taxable income it can be worth more to the donor than a gift they would otherwise deduct. It can also satisfy part or all of a required minimum distribution.

The annual limit is indexed for inflation. Tax advisory sources put it at $111,000 per individual for 2026, but we could not confirm that figure on an IRS page at the date of checking, so confirm it before advising anyone.

Practical warning: the payment comes from the custodian and often arrives without the donor's name attached. Watch for cheques that would otherwise be receipted to a brokerage.

How do you record a bequest intention?

In the donor record and on a legacy society list. Never in the income budget.

An intention is revocable, usually unquantified and may be decades from realisation. Record the fact of the intention, the date it was disclosed, any value the donor volunteered clearly marked as unverified, and whether they will let you name them publicly.

Keep four categories separate: intentions disclosed, estates where you have been notified of a death, funds in probate, and funds received. Only the last is income. Boards enjoy intention totals, so present them as a distinct figure with a plain caveat rather than blending them into fundraising results.

What should bequest wording say?

Publish suggested language including your full legal name exactly as registered, your address and your EIN. Attorneys drafting a will need the precise legal name, and organizations that operate under a trading name different from their registered one cause real problems in probate.

Offer a few variants: a specific dollar amount, a percentage of the estate, and the residue after other bequests. The percentage version is worth encouraging because it holds its value as the estate changes, whereas a fixed sum written in 2010 may be trivial by the time it is realised.

Always state that the donor should consult their own attorney, and never draft or amend anything yourself.

How long before a planned giving programme produces income?

Years, and often decades. This is why organizations abandon it, and why the ones receiving transformational bequests today are those that started asking twenty years ago.

What appears earlier is intentions. A programme with a tick box and a dozen conversations a year should start surfacing disclosed intentions within twelve months, and those are the measure of whether it is working. Realised income is a lagging indicator of a decision made long before.

Judge it on conversations held and intentions recorded, not on money received. Budgeting against expected bequests is how organizations end up with a very difficult year.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.