Planned giving (less commonly known as gift plannin

is an area of

fundraising Fundraising or fund-raising is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gathe ...

that refers to several specific gift types that can be funded with cash, equity, or property. These gift vehicles are commonly based on

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

tax law Tax law or revenue law is an area of legal study in which public or sanctioned authorities, such as federal, state and municipal governments (as in the case of the US) use a body of rules and procedures (laws) to assess and collect taxes in a ...

, bu
Canada
the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

, an
other nations
are beginning to establish similar laws. In the United States the specific rules of planned giving are defined by the

United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...

and the

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...

History and etymology

The term "planned giving" was coined in 1969 by Robert F. Sharpe, Sr.: "A donor usually considers a current gift to your institution as a cash outlay now. To make a deferred gift, a person decides to give at some future date, either a number of years from now or at death. A deferred gift is a present decision to make a future gift, evidenced by a legal contract. "While the name 'deferred giving' is best known to professionals in the field, it is not a term that communicates very much to the average donor. Therefore, we suggest the term 'planned giving.' When a person makes a planned gift, it suggests forethought." —
Give & Take
', a publication of the Sharpe Group, August 1972

Education

The use of planned giving by colleges and universities was pioneered by Allen Hawley at

Pomona College Pomona College ( ) is a private liberal arts college in Claremont, California. It was established in 1887 by a group of Congregationalists who wanted to recreate a "college of the New England type" in Southern California. In 1925, it became ...

. In 1942, Hawley introduced what became known as the Pomona Plan, where members receive a lifetime annuity in exchange for donating to the college upon their death. The plan's model has since been adopted by many other institutions, although the annuity rates offered by Pomona remain among the highest.

Usage

Planned gifts are referred to as such because they require more planning, negotiation and counsel than many other gifts. Planned gifts can result in immediate income, income to charity over time or serve to delay a gift for life or other period of time while the donor or others retain income and/or access to the assets used to fund the gift. Because of the current or future charitable benefits, a number of state and/or federal income tax, capital gains, estate and gift benefits are associated with giving in this way. Parents who have a child with a disability should ensure that the inheritance they leave for their child does not affect their child's eligibility to social assistance programs such as the

Ontario Disability Support Program The Ontario Disability Support Program (ODSP) is a means-tested government-funded last resort income support paid for qualifying residents in the province of Ontario, Canada, who are above the age of 18 and have a disability. ODSP and Ontario ...

(ODSP). A Henson trust can be useful to ensure this. Efforts to encourage planned gifts are popular among thousands of colleges, universities, hospitals, museums and community foundations in the United States. Funds generated through planned gifts are devoted to current funding needs as well as capital projects and endowments. Reports published during and after the Great Depression of the 1930s indicate that planned gifts provided a higher percentage of philanthropic dollars than in times of economic prosperity. See
Philanthropy in Uncertain Times - A Retrospective 1931-1949
and
Summary of Recent Research on Depression Giving
" from the Sharpe Group. Research shows that planned giving may become considerably more important as a type of philanthropy in the United States due to the aging Baby Boomer population. This is often referred to as the "Great Wealth Transfer." See
Philanthropy's Missing Trillions in the ''Stanford Social Innovation Review''.

Types of planned gifts

By far, the most commonly utilized planned gift is the

bequest A bequest is property given by will. Historically, the term ''bequest'' was used for personal property given by will and ''deviser'' for real property. Today, the two words are used interchangeably. The word ''bequeath'' is a verb form for the act ...

of property through a person's final will. Other types include: * Charitable bargain sale * Charitable Gift Annuity (CGA) * Charitable Remainder Annuity Trust (CRAT) * Charitable Remainder Unitrust (CRUT) * Charitable remainder trust * Charitable lead annuity trust * Charitable lead trust *

Donor Managed Investment Account A donor managed investment account (or DMI account) is a charitable giving mechanism in which donors receive a full tax deduction at the time they fund the DMI account, but retain investment management rights over the account, and can request donat ...

* Pooled income fund * Retained life estate * Testamentary life income

Assets to give

Securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

* Business Interests *

Cash In economics, cash is money in the physical form of currency, such as banknotes and coins. In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-imm ...

Life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...

Personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fr ...

Real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more general ...

Retirement plan A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...

References

{{reflist *Marrick, Peter. 2009. The T.A.S.K: The Trusted Advisor's Survival Kit. LexixNeixis Canada Inc. Philanthropy