Planned Giving Program Overview

Planned giving, sometimes referred to as gift planning, may be defined as a method of supporting nonprofits and charities that enables philanthropic individuals or donors to make larger gifts than they could make from their income. While some planned gifts provide a life-long income to the donor, others use estate and tax planning techniques to provide for charity and other heirs in ways that maximize the gift and/or minimize its impact on the donor's estate.

Thus, by definition, a planned gift is any major gift, made in lifetime or at death as part of a donor’s overall financial and/or estate planning.

Here are the steps a ministry should consider following before the start of a planned giving program:

  1. Establish written gift policies. A policy should start with a clear, concise statement of the philosophical framework of the ministry’s gift solicitation and acceptance policies. The policy statement should indicate the types of gifts the ministry prefers; e.g., those with few, if any, restrictions.

    The policy should state any limitations on gifts that the ministry feels are necessary. These may include:
    • Limitations imposed by local, state, or federal law;
    • Limitations imposed by the ministry’s founding, controlling, or operational documents, such as its charter, constitution, or bylaws;
    • Provisions to limit gifts that are too restrictive in purpose, or that fail to conform to the ministry’s purposes and priorities;
    • Provisions to limit gifts that would impinge upon the ministry’s right to accept other gifts, or that place an undue burden upon the ministry’s resources; and
    • Provisions to limit gifts that would subject the ministry to adverse publicity.
  2. Implement gift policies. The manner in which the planned gift policy is implemented is as important as its substance, perhaps even more so. Once the ministry’s governing body has approved the policy, a gift committee should be designated to oversee the planned giving program. The ministry’s business administrator or another appropriate individual is often responsible for carrying out the committee’s directives.

    Ministries often find it helpful to develop a brochure or pamphlet summarizing the planned gift policies. This communication tool is ideal for distribution to potential givers.

    The ministry should also identify one or more attorneys, certified public accountants, financial planners, or stockbrokers to assist its potential givers.

Donations of planned gifts can be very important in expanding a ministry's impact. The adoption and implementation of sound policies are keys to a successful program.

 


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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