Are You Taking Full Advantage of Legacy Giving?

Every Development Director feels tremendous pressure to provide financial results quickly and efficiently. With such an emphasis on “show me the money,” it’s easy to overlook the benefits of a legacy giving program.

But if you’re not investing into a legacy program, you could be leaving a big amount of money on the table.

Choosing to leave a portion of their estate to valued organizations says a lot about a donor’s values and their commitment. Giving beyond their lifetime sends a strong message to loved ones and peers… leaving an incredible legacy!

Your organization gives compassionate people in your community a way to release their generosity. It’s your responsibility to give donors every opportunity to help – however best meets their needs. Legacy giving is one of those opportunities!

Your organization gives compassionate people in your community a way to release their generosity. It’s your responsibility to give donors every opportunity to help – however best meets their needs. Legacy giving is one of those opportunities!

A well-built legacy giving program is an essential part of a solid development strategy. It helps sustain and support your other fundraising efforts and, more importantly, allows you to build equity during times of fluctuating giving.

Not everyone can make a large gift to your organization during their lifetime. In fact, most of us are wealthier after our death! Legacy giving allows donors to make a larger, more impactful gift than they ever thought possible, and generally involves one of three giving types:

  1. Gifts donors can make now.
  2. Gifts donors can defer.
  3. Life-income arrangements.

By getting to personally know your donors and their heart for giving, you can help them determine which options are best. Here are some quick facts about each of them…

Gifts donors can make now:

  • Life Insurance. Donors can name your organization as a beneficiary of part or all of a life insurance policy, and may receive a tax deduction for the cash surrender value.
  • Retirement Account. Donors may realize significant estate tax savings when they designate your organization as a beneficiary.
  • Gifts of Appreciated Stock, Bonds or Mutual Funds. Donors who give appreciated stock, held more than one year, can avoid capital gains taxes and receive a tax deduction for a significant percentage of their contribution. Bonds and mutual funds are similar in their tax treatment.
  • Real Estate. Like cash, gifts of property can be easy for donors to make. However, you should consult with your attorney or advisors before offering this option to be aware of potential issues that can arise.

Gifts they can defer:

  • Bequest Through a Will. Donors can make a bequest to your organization of a set dollar amount, specific property, percentage of their estate or the remainder of their estate after taking care of loved ones. It may be helpful to provide donors with specific wording that they, in turn, provide to their attorneys.
  • Living Trust. This tool allows donors to place assets into a trust that they control during their lifetime. Upon their death, charitable distributions are made as they have directed.

Life-income arrangements:

  • Charitable Gift Annuity. Through this contract, your organization makes fixed payments to the donor for life. Benefits from the remainder can be used to support your programs and services.
  • Charitable Remainder Trust. Assets are transferred to a trustee and, in return, the donor receives income from the trust for life or a specified term. When the trust terminates, the remainder is distributed to your organization.
  • Charitable Lead Trust. Assets are transferred to a trust that pays income from the fund to your organization for the number of years the donor determines. At the time period’s end, the trust terminates and the assets are given back to the donor or his or her designee.

Remember, you don’t need to know every detail about each of the ways to give! State and federal tax laws change frequently, so you should always encourage your donors to consult their own tax advisor, financial planner or attorney.

By encouraging your donors to consult professionals, you become a trusted advisor – helping them make the best decisions for themselves, their loved ones and the charities they love.

Legacy giving enables your donors to make a large gift that reflects their beliefs and values, while leaving a meaningful legacy that supports your organization during their lifetime… and beyond. You’re giving them an opportunity to make an impact on their community and provide your organization with financial security in the future.

One final word of advice: The greater the investment you’re asking a donor to give, the greater investment you need to make into that relationship. Earning someone’s trust and securing a legacy gift can take months – or even years – but the payoff for you both is incalculable!

  • Shellie Speer

    Shellie Speer-Burnett, Senior Vice President, BDI Academy

    With over 30 years of partnership in Rescue Missions and nonprofit organizations, Shellie Speer-Burnett brings her expertise, counsel and philanthropic-centered passion to assist in furthering the work of BDI’s Rescue Mission clients. For 22 years of her career, she served as the Founder and President/CEO of her own agency, ENEX Group, which helped her clients capture hearts and donor loyalty in their communities.

More fuel for more impact.

Let's talk.