Key Term

What is Planned Giving?

Definition

Planned giving refers to charitable donations that are arranged during a donor's lifetime but may not be allocated until after their death. These gifts are typically made through various financial and estate planning tools such as wills, trusts, annuities, or life insurance policies. Planned gifts can be designed to provide income to the donor during their lifetime while simultaneously benefiting their chosen charitable organizations.

Significance

Planned giving is crucial in philanthropic strategy as it allows donors to make substantial charitable contributions while maintaining financial security during their lifetime. It offers significant tax advantages, helps create lasting legacies, and provides charitable organizations with a reliable source of future funding. For nonprofits, planned giving programs represent a vital source of long-term sustainability, often resulting in larger gifts than would be possible through immediate donations. This approach to charitable giving enables donors to maximize their philanthropic impact while potentially benefiting from income streams and tax deductions.