In the area of planned giving, it is easy to get bogged down in legal, tax and financial technicalities. Detailed knowledge of the legal and technical aspects of planned gifts is not necessary to run a successful planned giving program in your congregation. Some general knowledge, however, will assist you in understanding how to conduct a successful planned giving program and perhaps empower you to meet with individuals and discuss how they might make meaningful gifts.

What Are Legacy, or Planned Gifts?

A wide range of giving opportunities fit under the topic of planned giving, including:

• charitable bequests
• life income gift arrangements (charitable remainder trusts and gift annuities)
• gifts of real estate
• gifts that use retirement and insurance plan benefits.

Planned gifts could also include other assets, such as:

• mineral and timber rights
• oil and gas leases.

Most planned gifts are deferred, meaning your designated beneficiary will enjoy the financial benefits after the donor dies. Often a planned gift is the largest single gift donors will ever make, so careful thought and estate planning is in order.

Categories of Planned Gifts

• Testamentary gifts (bequests) are by far the most popular, reliable, and inexpensive planned gift. These take the form of specific provisions within a donor’s will, stating that all or some portion of the donor’s estate will be a charitable gift to your congregation. Bequests will be made during both the leanest and the best of financial times.
  • With Umbrella Giving, donors may make their bequest to the UUA, stipulating gifts to other UU entities. The UUA will administer the distribution of funds to all of the named UU beneficiaries.
  • Life income gift arrangements are another popular form of planned giving. These may take the form of charitable trusts and gift annuities. Simply stated, a donor makes a gift of $10,000 or more ($250,000 or more in the case of a charitable remainder trust), enjoys an immediate income tax deduction for a portion of the gift, reduces some or all capital gains, and receives a quarterly check for the rest of their life. After the donor dies, the gift is distributed to your congregation, the UUA, a UU entity or a combination of these according to the donor’s wishes through Umbrella Giving.

Planned gifts come in a variety of forms, and involve many different kinds of assets. Given this diversity, it not feasible to illustrate here all the ways in which planned gifts may come to your congregation. Instead of becoming experts on the details of various types of planned gifts, you and your fund raisers need to know a few basic “golden rules” that indicate someone who might be interested in making a planned gift.

Suggested Gift Arrangements

• High annual income suggests either or both a current gift and a deferred gift.
• Comfortable to low annual income, owning a lot of highly appreciated assets, suggests a gift that provides a lifetime income.
• Moderate to high degree of apprehension about financial future may suggest a gift annuity or charitable remainder annuity trust.
• Insecurity about retirement and health care costs related to aging suggests a bequest.

Whatever gift may be offered, the Legacy Gifts staff is here to assist you in making it feasible for all involved. In the end, what is most important is for you to make the call and the visit and to provide the opportunity for the donor to offer their gift.

Why Are Planned Gifts Important?

Planned gifts, including charitable bequests made through a will, are often the single largest and most significant gifts an individual can and will make to your congregation. Individuals usually give bequests and planned gifts to what has mattered most to them in their lives – family, friends, and institutions that share their core values. The level of commitment and interest shown by a planned gift is deep and for the long-term. It is a rare person who gives away a life’s savings on a whim. Many instead evaluate their fundamental values and priorities and apply these to a plan for how they want the assets in their accumulated life estate to be distributed and used after they die.

Sometimes, it is a gift intended to provide long-term or perpetual support to your congregation, the UUA or other UU entity, such as a gift to a permanent endowment. Planned gifts therefore are essential to the financial future of your fellowship, society, or congregation and Unitarian Universalism as a whole. Indeed, a planned gift can be the ultimate gift of a lifetime for the donor. Planned gifts will not be made from disposable annual income or by digging a little deeper for a “stretch” gift as in a campaign. Instead, a planned gift is usually a donation made from the assets accumulated over a person’s lifetime, and it is often a contribution to an endowment.

For some donors, a planned gift is part of an overall estate plan, which they have developed with a tax, legal and/or financial professional, since planned giving tools provide professional estate planners useful options for helping clients increase current income in a tax-favored manner, while providing vehicles for diminishing a client’s assets for estate tax. Tax savings are seldom the primary or sole motivating forces for charitable contributions. In some instances, however, the tax benefits of philanthropy allow some individuals to give more than they initially thought possible.

Who Gives?

Conventional wisdom holds that people between 55 and 75 years in age are the most likely age group to make planned gifts, but a planned gift may be made at any point in an adult’s lifetime.

At any age, in every economic circumstance, charitable bequests are by far the most commonly used form of planned giving. Bequests are relatively inexpensive to arrange, they are “no risk” gifts, and they are easy for congregations to promote. All a donor needs to do is complete a legal will.

All you have to do is ask. 

By any measure, many Unitarian Universalists are at a point in their lives to make a commitment to the future of our liberal faith. Your congregation’s mission or “vision” statement therefore should be compelling. How contributions will actually be used should be common and public knowledge. If gifts are going to your endowment fund, prospective donors will want to know how their gifts will be invested and managed, how endowment earnings will be allocated for spending or re-investment, and under what circumstances, if ever, the principal might be invaded.

Common Characteristics of Individual Prospects

• Frequent visitor
• Serving on a board or committee
• Active volunteer
• Surviving spouse
• Without children, or whose family obligations have already been met
• Alumni
• Frequent donor
• Do not be limited by your perception of someone’s means. A legacy gift is often the largest gift an individual is able to make. Don’t pre-judge!

What Planned Giving Is Not

It is important to remember at the outset that planned giving is distinct from other types of fund raising typically done in your congregation. The annual canvass, for example, seeks contributions to fund the operating budget. People expect to be asked to make a pledge each year and make donations from disposable annual income. Pledges are paid in installments, usually by check, and increasingly by electronic fund transfers, using credit or debit cards. Occasionally stock gifts are made.

A capital fund drive seeks financial resources for specific projects, such as building improvements, facility expansion, or land purchases. These occur, at their shortest possible interval, once every five years. Capital campaign pledges are usually three to five times larger than the individual annual canvass pledge amount. Pledge payments are made over three to five years, and donors usually have to “stretch” their financial resources to contribute. People may dip into savings or use non-cash assets to make a campaign gift.

On the other hand, a planned giving program could be described as work that has a beginning, but has no end, unlike both the annual canvass, which occurs within a set amount of time (weeks, maybe months), and a capital campaign, which begins and ends in a matter of years. Planned giving programs are forever. People will give to endowment funds at different times of their lives – most will do so at death. Their lives, not the church calendar or the schedule of a building project, will determine when they are ready to make their ultimate gift to the congregation.

Tips and Traps with Planned Giving

Boundaries

In the enthusiasm to assist individuals in planning legacy gifts, beware of becoming a personal advisor or offering legal or financial advice. It is inappropriate, even unethical, for a fund raiser to exercise undue influence or to direct a donor’s personal affairs. It is always prudent to be mindful that your role is as a fund raiser securing contributions for the congregation. That doesn’t mean that you cannot be of some help, but it does mean that you need to guard the boundary between providing information and becoming a donor’s personal representative or certified financial planner or attorney. Indeed, it would be a conflict of interest if you were. 

Professional Resources

Always encourage donors to seek independent qualified counsel before they commit to a gift plan of any significance or complexity. Avoid the temptation to promote a particular professional as legal or financial planning counsel for your planned gift donors. To insure against any hint of conflict of interest, your donors need to make an informed decision and choose their own independent counsel to look after their interests. The congregation should not make the choice for them.

Fear of the Unknown

Congregation volunteers faced with the prospect of being responsible for conducting a planned giving campaign often feel at a loss to understand the technical complexities of the more sophisticated planned giving vehicles. This feeling manifests itself in a fear that keeps most volunteers from attending to the most important part of planned gift fund raising: talking one-on-one with potential donors. Don’t let the fear of not having all the answers stop you from making calls and meeting with donors. Be willing to admit to a donor that you don’t have all the answers.

Authenticity and openness will build trust. You will have success if you speak about what you know, i.e., why your church and Unitarian Universalism are important and worthy and in need of financial support. This is what is most important.