Gift Planning 101: Donor motivations

In your practice, you’ve certainly come across the concept of “planned giving,” but are you sure you know what it is and why your clients want to do it? You’ve probably been asked to make a planned gift to an organization you support. Why did you choose to do that (or not to)? Planned gifts are often the largest gift a donor will make, so motivation matters. But let’s start with the basics.

What is “planned giving”?

When a client writes a check or gives stock to a charitable organization, the client is making what’s sometimes referred to a “current gift.” Many of your clients no doubt make current gifts to their favorite organizations every year, perhaps using their donor-advised funds at the Community Foundation. These regular gifts are often referred to as “annual gifts.” 

In addition to those outright gifts, many of your clients have likely arranged to make future gifts to favorite charities, perhaps by setting up a designated fund at the Community Foundation. As their trusted advisor, you may have helped them make these arrangements! These structured future transfers to charity are often referred to as “planned giving” because they require a plan. 

Why do donors make planned gifts?

There are many reasons a client might decide to make a future gift to support a charity. Here are a few:

• They want to leave a legacy to the organization or community after their death so that their commitment to the charity continues beyond their lifetime.

• They want to ensure that family members can experience the joy of giving in the future by setting up a vehicle, such as a designated fund at the Community Foundation, which can support favorite charities and may include connection points for family members to stay involved.

• They want to make the most of tax benefits associated with setting up a future gift to charity, including avoiding capital gains tax, securing an income tax deduction up front, and even retaining a life income stream for themselves or a loved one.

• They own assets that are not suitable to leave to family members (because they might trigger a big tax bill) but would make ideal gifts to charity.

• They want to protect their favorite nonprofit against difficult economic periods by establishing a source of steady predictable revenue in the future using an endowed fund.

These are only some of the reasons why your clients might seek your advice and support to establish a planned gift. By understanding their motivation at the beginning, you can keep their goals and values in mind during the planning process. And as always, we are here to assist you and your clients!

Reach out to Alison O’Carroll, director and philanthropic counsel, at 404.333.0241 or aocarroll@cfgreateratlanta.org to discuss your client’s charitable motivation and explore possible solutions. If this is something your team would benefit from hearing, we’re happy to present on this topic at your office too! Please let us know how we can help.