Types of Planned Giving

Charitable giving can sometimes be a challenge, and it’s difficult to know where to start placing your efforts, but NCHS is here to help. With so many different donation options available, it’s tricky to navigate which one is right for you. We understand the complexity of the charitable giving landscape and want to help you make informed decisions that align with your values. In this article, we’ll break down some of the most common forms of planned giving.

For even more in-depth information, along with helpful tips and analysis, take a look at our free Planned Giving Guide, available here.

Planned Giving

Planned giving is a way to make a big impact on your favorite charities or nonprofits by donating through estate planning. It's a smart choice for anyone looking to make a substantial donation while still being economically savvy.

Rather than making a one-time donation, donors can spread out their contributions over time, allowing them to give cash, stocks, real estate, or other assets to suit their current financial situation. By working with your charity or nonprofit of choice, planned giving can help you make a difference for years to come.

Endowment Funds

An endowment fund is a powerful tool for supporting a non-profit organization indefinitely. When you contribute, your donation is responsibly invested, and the earnings are used to sustain the organization's valuable work.

You can choose to specify a particular cause or project or simply give without restriction so the organization can allocate the funds where they're needed most. It's a meaningful way to make a lasting impact and ensure your donation goes toward something important and beneficial.

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Will-Based Gifts

Utilizing a will can be an excellent way to ensure that your gifts are directly used for the charitable causes you care about without being bogged down by estate taxes or probate proceedings. With will-based gifts, you can allocate a specific amount or a portion of your estate to your chosen charities.

The options for will-based gifts include:

• Endowment funds
• Monthly stipends
• Cash
• Assets like stocks and mutual funds
• Non-cash items like artwork or antiques.

Plus, depending on your gift's size, it may qualify for tax deductions. Don't let red tape get in the way of your generosity - consider using a will to make a lasting impact today.

Donor-Advised Funds (DAFs)

A donor-advised fund (DAF) is a convenient and efficient way for donors to make charitable contributions while still maintaining some control over where their funds are directed. With a DAF, donors can donate assets such as cash or stocks, receive tax benefits, and then instruct the fund on which charitable organizations to support.

One of the significant benefits of a DAF is the ability for donors to extend their legacy by designating a person or persons to manage the fund on their behalf even after they have passed. This provides a sense of continued involvement in charitable giving beyond one's lifetime.

You can also consolidate multiple donations into one account and receive immediate tax benefits for each contribution. Some DAFs even offer anonymous giving options for those who wish to keep their donations private.

Trusts

If you're looking for a reliable and efficient way to support nonprofits with substantial sums of money, consider setting up a trust. The best part is that this can be done during your lifetime or even after you pass away. With living trusts, you can appoint trustees who will manage the trust assets and distribute them according to your wishes while you’re still alive.

On the other hand, Testamentary trusts are established through wills and become active after the designated person passes away. Both options give you huge philanthropic advantages that can positively impact the lives of your chosen beneficiaries.

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Charitable Remainder Trust

This irrevocable trust pays income to one or more beneficiaries until their death, at which point the remaining assets are donated to one or more nonprofits. By setting up a charitable remainder trust, you'll receive an immediate tax deduction based on the value of your gift. You'll also have the opportunity to provide for your family's future education expenses without worrying about estate or inheritance taxes.

Plus, a CRT can offer significant estate planning benefits. If you want to support education expenses for your children or grandchildren while also leaving a gift to charity, a CRT can help you achieve both goals. Plus, you won't have to worry about any estate or inheritance taxes on those funds after your passing.

With a charitable trust, you're in the driver's seat. You're able to choose how it's set up and managed, as well as the charity that benefits from the donations. You'll have control over how much money is shared with the charity each year, known as an annuity, and can designate a loved one to receive income in the event of an unforeseen circumstance.

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Charitable Lead Trust

A charitable lead trust is a powerful tool that allows you to donate a certain amount of income to your chosen charity, or charities, every year for a specified period of time. You can also name beneficiaries to receive the leftover assets after your passing. With the advantages it offers over other forms of giving, a charitable lead trust could be just the solution you've been seeking to maximize the impact of your philanthropy.

With tax benefits, security, and flexibility, it's a smart choice for donors who want to make a lasting impact. By donating through their trust, donors can receive substantial tax deductions while increasing their charitable giving.

Plus, a charitable lead trust provides peace of mind by protecting assets from outside influences. It guarantees the trust will remain in effect until all funds are distributed according to the donor's wishes. And with the flexibility to specify exactly how much money is donated annually and which charities benefit, donors can rest assured that their legacy will be carried out just as they intended.

There are many ways to give to the causes and organizations that align with your values. From one-time donations to recurring gifts to volunteering your time and skills to leaving a legacy gift in your estate plan, there are no shortage of options for those who wish to make a meaningful difference in the world.

By taking the time to research and understand your options, you can make charitable giving a valuable part of your life while ensuring your donations are making the largest possible impact. Thank you for considering giving back, and we're here to support you every step of the way. Ensure thoughtful planning with our Planned Giving Guide, available for free here.