In the coming decades, the Baby Boomer generation will pass down a monumental $68 trillion in wealth—with $10 trillion to $12 trillion destined for charitable causes. While many nonprofits prioritize immediate funding needs, implementing a planned giving program can position your organization to capitalize on this historic wealth transfer and secure lasting support for your mission.

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This guide will introduce you to the world of planned giving—breaking down gift types, essential terms, and the mutual benefits for you and your donors. You'll also find practical steps to launch your own program and proven strategies to engage and steward donors for long-term success.

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What Is Planned Giving?

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Planned giving, sometimes referred to as gift planning or legacy giving, is a critical source of funding that ensures sustained impact for your nonprofit. It occurs when a donor pledges a future charitable gift as part of their broader financial and estate planning. Typically, these contributions are arranged through a will, ensuring that your organization receives the donation after the donor's passing.

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Types of Planned Giving

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Planned gifts can come from a variety of traditional and non-traditional assets, including those that may not be eligible for donation during a donor's lifetime. While bequests are the most popular choice, these gifts can also include charitable gift annuities, life insurance policies, retirement funds, and retained life estates.

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Bequests

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A bequest is a planned gift left to a nonprofit in a will or a revocable trust, which takes effect after the donor has passed. It typically consists of a transfer of cash, securities, or other property made through a donor’s estate plans.

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Accounting for over 90% of all planned donations, bequests are a popular choice because they’re simple—donors can easily include your organization in their will or add a codicil, and your nonprofit can promote bequests with minimal complexity. Bequests are also a reassuring and flexible option for your supporters, as they can easily redirect or remove the bequest at any time.

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Since they draw from a total estate rather than cash on hand or other liquid assets, donors are often more generous with bequests, meaning they represent a key area of opportunity for nonprofits. In 2023, donors gave a staggering $42.7 billion through bequests—a figure expected to only keep climbing as Baby Boomers reach their golden years and older Gen Xers approach retirement age.

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Charitable Gift Annuities

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A charitable gift annuity (CGA) is a lifelong contract between a donor and a nonprofit. A donor contributes a substantial gift to an organization and, in return, receives an annual set income from that sum. The size of this income depends on various factors, including a donor’s age, and will never fluctuate or adjust for inflation. Once the donor passes away, the remaining funds are retained by the organization.

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CGAs are a mutually beneficial arrangement: Your nonprofit receives a sizable gift that provides lasting support, while donors receive lifelong income and significant tax benefits. These include avoiding capital gains taxes on any appreciated assets they donate, claiming a charitable tax deduction based on the gift’s value, and ensuring that the remaining funds left to the nonprofit are exempt from estate taxes.

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Life Insurance

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Life Insurance is another powerful vehicle for planned giving. Individuals can make a gift of life insurance by leaving a nonprofit as a partial or full beneficiary in their policy. Because these gifts are often much larger than what a donor could or would give in cash during their lifetimes, they can drive significant impact for your organization. On the other hand, life insurance is an excellent planned gift option for donors who have paid-up policies that they won’t use. Plus, for those with large estates, gifting life insurance can significantly minimize income and estate taxes for their heirs.

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Retirement Funds

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Donors can also designate your nonprofit as a beneficiary of their retirement assets, such as an IRA, 401(k), or pension. For donors, this is another tax-smart choice, with benefits including tax-free withdrawals through Qualified Charitable Distributions, reduced taxable income, potential lower Medicare premiums, and estate tax advantages.

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Similar to life insurance gifts, retirement funds are also often more substantial than cash donations, meaning they have the potential to advance your mission in meaningful ways. And with IRAs alone holding an estimated $14.3 trillion in assets and thousands of Baby Boomers reaching retirement age daily, these planned gifts present a powerful opportunity for nonprofits.

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Retained Life Estates

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Property represents more than just a physical asset—it's the bedrock of personal wealth and security. With a Retained Life Estate, an individual can donate the future ownership of a property, most commonly a home, to a nonprofit while retaining the right to live in it for the rest of their life.

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This creative gift option creates meaningful benefits for both parties. Your nonprofit gains valuable real estate that can be either sold to support your mission or utilized directly, while your donor simplifies the administration of their estate for loved ones and receives an immediate income tax deduction for a portion of the appraised value of their property.

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Benefits of Planned Gifts

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Planned gifts create an exciting win-win scenario for both donors and nonprofits. Your donors have the opportunity to leave a lasting legacy, all while reaping valuable tax benefits that enhance their financial future. In return, your organization secures vital future funding from donors who might otherwise not be able to support your mission.

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Donors

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When your donors make a planned gift, they experience benefits in both tangible and intangible ways, with concrete financial advantages like potential tax deductions and estate tax savings complementing the profound emotional reward of creating a lasting legacy.

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Sizable Tax Break

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Tax breaks often go hand in hand with planned giving, offering a powerful incentive for potential donors to support your mission. While each donor's situation is unique and requires individual assessment, the potential benefits typically include:

• Capital gains tax savings: By donating all or part of appreciated assets—like property, stocks, securities, and more—donors can avoid hefty capital gains tax payments.
• Estate tax deductions: Estate tax, often referred to as the "death tax,” is levied on assets inherited after a donor's passing. Generally, planned gifts made through bequests, life insurance policies, retirement accounts, and real estate are deductible from estate taxes.
• ‍Income tax relief: Donors can receive income tax deductions by contributing gifts for different assets beyond cash. Making a qualified charitable distribution from an IRA also allows donors to avoid income tax on their required minimum distributions.

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Determining How the Gift Will Be Spent

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Individuals who give to nonprofits are eager to know that their contributions are making a difference. In fact, 97% of donors cite the real or perceived impact of their gift as a major motivating factor behind their decision to give.

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When making an annual donation or one-time gift, supporters can rarely specify how they would like their donation to be spent. With planned gifts, however, they can outline exactly how they want their contributions to be allocated. This level of control not only deepens their connection to the cause but also ensures their vision is realized in the most impactful way possible.

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Nonprofits

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For nonprofits, planned giving is a cornerstone of any robust fundraising strategy. Not only do planned gifts promise the benefit of future funding for your organization, but they’re often much larger than typical cash donations. This means they generate a projectable and sizable source of revenue for your organization, which can help ensure financial stability and fund long-term projects and goals.

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Capitalize on Donor Loyalty

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Your best prospects are your most loyal donors, not necessarily your wealthiest. While many individuals want to make meaningful donations to the causes they care most about, they may not have the financial flexibility to do so during their lifetime. Planned giving offers an accessible solution, enabling donors of all income levels to contribute through saved assets or estate plans without affecting their current cash flow. This approach allows you to harness the generosity of committed supporters who might otherwise be unable to make a major gift.

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Even better, research shows that those who make a planned gift often become more engaged with the cause. In fact, donors who include a nonprofit in their estate plans typically increase their current giving by about 75%—and maintain that higher level of support.

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Receive Largest Yearly Gifts

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Along with major gifts, planned gifts are among the most transformative donations a nonprofit can receive. On average, the typical completed planned gift is 200 to 300 times larger than a donor’s largest annual fund contribution, representing a powerful opportunity to advance your mission.

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In addition to their significant size, planned gifts are highly cost-effective to secure. For every dollar spent on fundraising for bequests, nonprofits see an average return of $56.83—outperforming the $33.33 return per dollar for major giving and $8.41 per dollar for regular giving. This makes planned giving one of the highest ROI fundraising strategies available.

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Common Planned Giving Terms

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Planned giving provides nonprofits with an opportunity to secure substantial, long-term support, but it comes with a vocabulary that can often feel like a foreign language to newcomers. Since mastering this terminology is crucial for navigating planned giving effectively, here are some key terms to know:

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Bequest Intention

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A bequest intention is a donor’s indication of their plan to leave a future gift to a nonprofit. It serves mainly as a courtesy notification, allowing the organization to anticipate a potential contribution, but is neither a legal nor binding commitment on the donor’s estate.

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Donors aren’t required to inform a nonprofit about a planned gift, but encouraging them to share their bequest intentions can be highly beneficial. It provides an opportunity to strengthen relationships—for example, by acknowledging the intention with gratitude, inclusion in legacy societies, or other special benefits—as well as collect testimonials to inspire others to consider planned giving. Be sure to approach this carefully, however, avoiding any pressure to disclose estate details and offering low-cost or no-cost benefits since planned gifts may change or not be realized.

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Bequest Expectancy

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Bequest expectancy refers to the approximate value of future planned gifts based on data such as past giving trends or any known bequest intentions.

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This estimation is a valuable financial planning tool for nonprofits, helping teams visualize future revenue and make informed decisions to sustain and strengthen their planned giving programs. An expectancy amount also helps leadership understand the impact of planned gifts on future revenue, as some contributions may take months or even years to materialize due to estate complexities or the need to sell assets.

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Planned Gift Notification

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When a planned gift comes to fruition, a planned gift notification is the equivalent of a receipt sent by an estate representative to officially notify the nonprofit of the transaction. In some cases, such as if the gift is a percentage of an estate, it may not be possible to immediately determine the value of the contribution. A gift expectancy value may therefore be used where appropriate until it can be substituted with a more accurate calculation.

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How to Start a Planned Giving Program

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With countless daily tasks vying for your attention, it’s all too easy to put planned giving on the back burner. However, taking the time to develop a systematic planned giving program is a worthwhile investment. It’s not just about meeting immediate needs—it’s about establishing a foundation for long-term success and sustainability that can significantly enhance your organization’s impact.

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Is Your Nonprofit Ready to Seek Planned Gifts?

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The first step to securing planned gifts is ensuring your nonprofit has a solid foundation in place. Start by assessing your readiness with these key questions:

• Mission and relationships: Does your organization have a clear mission and strong donor relationships?
• Goals and alignment: Have you set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals for your planned giving program?
• Tools and infrastructure: Do you have the necessary toolkit? This includes a CRM or donor database with segmentation capabilities, the necessary marketing tools to promote your program, and reporting systems to ensure you can accurately keep track of committed gifts over time.
• Staff and capacity: Are qualified staff in place to manage the program, and does your nonprofit have the capacity to handle long-term commitments?
• Strategy and resources: Is there a defined strategy and marketing approach to identify prospects, promote planned giving, and provide the necessary resources for education and engagement?
• Donor stewardship: Have you developed a stewardship system to communicate with and nurture relationships with current donors?

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Once these components are addressed, creating a strong case for support becomes the next priority. Since planned giving represents a strategic investment, obtaining board and leadership approval will likely be necessary before launching the program.

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Familiarize Yourself and Your Team With Planned Giving Details

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You don’t need to be a legal or tax expert for your planned giving program to succeed, but it’s important for you, your staff, and your board to grasp the fundamentals of this fundraising strategy and how each type of gift contributes to your mission. Offering ongoing training, resources, and updates on the latest tax and legal requirements ensures everyone stays informed and prepared.

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With this shared understanding, you not only build confidence and alignment within your organization but also ensure your team can effectively communicate the program’s value to prospective donors. Your board can also serve as effective evangelists for your program, and by making planned gifts themselves, they can set a meaningful example for others to follow.

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Identify Your Prospects

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When searching for potential planned givers, it’s important to consider several key factors to identify your best candidates. While not exhaustive, this list outlines a popular framework for prospect screening:

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• Philanthropic history: Planned gifts carry a deep significance for donors, and oftentimes, these individuals are especially passionate and loyal to the causes they support. Recurring supporters and major gift donors are typically highly committed to your mission, making them strong candidates for planned giving opportunities.
• Affinity for your cause: Beyond financial contributions, look for supporters who actively volunteer, attend events, or advocate for your organization. Their active involvement also suggests a strong connection to your mission, signaling their potential for a lasting legacy gift.
• Wealth: Planned giving isn't limited to wealthy individuals, but those with significant assets have the capacity for larger planned gifts and may be more interested in the corresponding tax advantages. Perform a wealth screening by looking at the data your organization has on your supporters—real estate ownership, business affiliations, stock holdings, political contributions, etc.

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Demographics: Individuals over age 60 tend to be considering legacy questions with more urgency and are prime candidates for planned giving. However, those in their 40s and 50s shouldn't be overlooked; on average, donors create their first will at age 44, and 53% of donors establish their first planned gift when writing their will. People without children, as well as singles or widows, are also far more likely to make bequests.

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Generate Marketing Materials

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Once you analyze and understand your prospects, you can create segmented lists and begin to promote your new program. In your marketing plan, consider leveraging the below for maximum impact:

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• Website content: Create an engaging landing page or microsite that defines the various types of planned gifts and how donors can make them, or add a section to your main “Ways to Give” page for supporters to easily request more information about your legacy program. For inspiration, check out the American Red Cross, which dedicates an entire site to this purpose, linking it from its main page and featuring helpful sections like “How you can give.”
• Digital advertising: Search engines like Google are a core tool for attracting new traffic to your website, and using search engine ads to promote your planned giving content can connect individuals interested in leaving a legacy with your nonprofit.
• Email campaigns: Email is one of the most efficient and cost-effective ways to reach your planned giving prospects—with even older generations demonstrating high responsiveness to email. You can create several standalone campaigns to promote your program as well as integrate planned giving mentions into your existing communications, like annual reports, GivingTuesday appeals, or newsletters.
• Printed one-pagers: Craft a well-designed one-pager you can bring to events or programming for those who respond better to or prefer printed materials. Emphasize the impact a donor can make with their gift, along with additional benefits like tax advantages and inclusion in a legacy society.
• ‍Legacy society: These societies recognize individuals who have made planned gifts, enabling organizations to warmly welcome donors and cultivate a vibrant community where they feel valued and connected. Nonprofits typically enhance this experience with special perks, such as recognition in annual reports or invitations to exclusive events.

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Send Out Communications

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Like most fundraising efforts, planned giving is fundamentally about building relationships. To cultivate stronger connections, effectively engage donors, and inspire action, consider these practical messaging tips when crafting your campaigns:

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• Be donor-centric: Placing donors at the heart of your messaging is part of donor-centric fundraising, a strategy proven to increase giving.  Remind donors of the impact they can make with a planned gift—as well as the numerous benefits they receive—and leverage insights from your donor base to personalize your donor communication. Planned giving can also be a sensitive subject that requires empathy, and research indicates that mentioning death can be a turn-off for many supporters.
• Leverage social proof: Donors are no different than consumers, influenced by social cues such as recommendations and peer behavior. By showcasing testimonials, photos from legacy society events, and donor spotlights in your marketing materials, you can build credibility and encourage contributions. In fact, donors are 15% more likely to leave a bequest when they feel part of a larger community of supporters.
• Educate your donors: Only 37% of people aged 30 and above know what planned giving means. While you may think technical terminology enhances your authority, it actually risks alienating and confusing your audience. Incorporate educational content in your marketing strategy that outlines the basics of planned giving in a jargon-free, accessible way.
• ‍Consistency is key: Your donors are busy and likely engaged with multiple organizations, making consistent impressions across channels essential for maximizing your campaign’s impact. Responsive fundraising platforms like Virtuous allow you to integrate your tech stack—from CRM to email marketing to volunteer management—into a holistic platform. Leveraging unified data, you can seamlessly align your messaging to reflect how donors interact with your nonprofit, creating a cohesive multichannel experience.

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Keep Things Going with Acknowledgements

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After investing considerable energy and resources into attracting potential givers, a secured donation can often feel like crossing the finish line. However, a sustainable fundraising strategy considers a new donation as the start of a race rather than the end. Continuing to build and nurture relationships after a gift is made is known as donor stewardship, and it’s essential for fostering lasting support. Proactive planned giving stewardship ideas include:

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• Expressing gratitude: A genuine, personalized "thank you" should always be your first response to a gift. It’s more than just good manners—it’s the foundation of a lasting connection and proven to result in greater giving. Yet, too many nonprofits blur the lines by combining their thank-you notes with their tax receipts, which are dull, full of legalese, and anything but personal. When you merge them, your thank-you risks becoming just another transaction, losing the heartfelt impact that makes donors feel truly appreciated. Always take the extra step to make your gratitude stand out—it’s worth it.
• Demonstrating impact: Planned givers are deeply committed to your cause and want to see themselves as catalysts for change. Highlight the tangible impact of their legacy gifts through annual reports or brochures, bring the results to life with compelling donor stories, or give donors a chance to experience their contributions firsthand through guided tours, visits, or events where they can connect directly with those they’ve helped.
• Building a community: At the heart of every thriving nonprofit is a vibrant community, which is why many organizations establish legacy societies to honor and engage their planned givers. These exclusive memberships not only offer meaningful perks—like welcome gifts and special event invitations—but also make members feel valued and connected to something larger than themselves.

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A well-crafted planned giving program is overall one of the most powerful ways to ensure your nonprofit’s long-term financial health and growth—all while enabling donors to leave a lasting legacy and enjoy other perks like tax savings. While planned giving may seem complex, your role is straightforward: You’re simply encouraging those who already love your mission to include your organization in their estate plans.

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As we’ve covered, kickstarting your own planned giving program to capitalize on existing donor loyalty—as well as the upcoming Great Wealth Transfer—involves thoughtful donor segmentation, personalized outreach, and careful stewardship. And with tools like Virtuous, you can manage relationships seamlessly while keeping supporters engaged every step of the way, ensuring lasting support for your mission.

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Ready to secure your nonprofit’s future through planned giving? Learn how Virtuous can help.