Key Term

What is Beneficiary?

Definition

A beneficiary is an individual, organization, or entity that receives or is designated to receive benefits, assets, or funds from a charitable gift, trust, will, retirement account, or other financial arrangement. In charitable giving, beneficiaries are typically nonprofit organizations, charitable foundations, or specific causes that receive donations or grants from donors.

Significance

The selection of beneficiaries is a crucial aspect of charitable giving as it determines the ultimate impact of a donor's generosity. Proper designation of beneficiaries ensures that charitable assets are distributed according to the donor's wishes and can have significant tax implications. Understanding beneficiary designation is essential for both donors and charitable organizations, as it affects estate planning, legacy giving, and the long-term sustainability of charitable programs. It also helps donors ensure their philanthropic goals are met and their charitable impact continues even after their lifetime.