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A Crash Course in Planned Giving

Posted Jun 16, 2023 03:36 PM
When nonprofits think of raising large sums of money, they usually think of major donors, corporate partnerships, or grants. Another way to raise funds is through planned giving, an often overlooked type of gift. Learn what planned giving is, its benefits, and some tips for getting started.

What is planned giving?

Planned giving is a form of fundraising in which donors commit to making a gift to a nonprofit in the future as part of their estate or financial plans. These gifts can take many forms, but the most popular is a bequest in a donor’s will, given to a nonprofit when the donor passes. Donors who make planned gifts are often referred to as legacy donors or planned donors.

What are the benefits of planned giving?

Planned giving benefits nonprofits and donors alike. Here are some of the benefits for nonprofits:

  • Guarantees future revenue. Since planned gifts are received in the future, this gives your nonprofit security and allows you to make more concrete plans for future projects.
  • Increases annual giving. Many donors who participate in planned giving continue to make gifts in the present. In many cases, their strengthened relationships lead to larger annual gifts than they gave previously.
  • Creates more giving opportunities. Planned giving is accessible to most donors because it does not impact their day-to-day income. In turn, many donors often make larger planned gifts than they would immediate cash gifts.

Donors also benefit from planned giving:

  • Tax benefits. Many types of planned gifts, such as trusts, are tax-exempt. For bequests, taxes are deducted against the donor’s estate, benefiting the donor’s heirs.
  • Makes a meaningful impact. When donors make a planned gift, they can specify how they want the nonprofit to use their gift, allowing them to choose how they want to impact the world.
  • Creates a legacy. A planned gift allows donors to leave their mark on the world. Nonprofits often publicly acknowledge their legacy donors, remembering them for their good deeds.

If you’re interested in incorporating planned giving into your fundraising strategy, start by creating a planned giving program. This program will establish that your nonprofit is accepting planned gifts and determine how you market planned giving.

Tips for creating a planned giving program

The idea of creating a planned giving program from scratch can be daunting. Here are a few tips to help make the process easier:

Identify planned giving prospects

Determining who your planned giving prospects are can give you valuable information about how to market your planned giving program. Here are a few ways to find prospects:

  • Reach out to donors to ask if anyone has already made or considered making a planned gift.
  • Evaluate your interactions with donors for their connection to your nonprofit.
  • Sort and segment your planned giving prospects into different groups based on their affinity, connection to your nonprofit, and wealth markers.

Whether you are determining if a donor has decided to make a planned gift or reaching out to promote your planned giving opportunities, be compassionate and thoughtful while discussing planned giving. It can be a sensitive subject for donors, so take FreeWill’s advice and avoid mentioning death. Instead, focus on the benefits and emphasize the long-term impact they can make.

Establish a legacy society

A legacy society is exclusive to your nonprofit’s legacy donors. Creating one offers donors additional incentive to participate in planned giving. Keep the following in mind as you establish your legacy society:

  • Include your nonprofit’s branding. If your nonprofit’s brand uses specific colors, use those to tie your legacy society to your nonprofit. You can even cleverly integrate your nonprofit’s logo within your legacy society’s.
  • Establish perks. These perks can range from special events, to early access to other event ticket sales, to free merchandise.
  • Create a legacy society web page. This page should be accessible, easy to find, and contain all relevant information about your legacy society. Most importantly, it should offer a way for donors to join.
  • Promote your legacy society. Advertise your society on your website, donation page, social media, and email newsletters.

Establishing a legacy society motivates donors to participate in planned giving because of the prestige and perks the society offers. As legacy donors are your most exclusive donor group, evaluate the perks you’ll offer and if they will satisfy your donors.

Steward your planned giving donors

Retaining and stewarding all donors is important, especially for planned donors. Depending on the type of planned gift, once donors create it, they could easily remove it in the future without remembering to tell you.

Here are a few ways you can steward your planned giving donors:

  • Hire a planned giving officer. You can also recruit an existing development officer or fundraising officer to take the lead on planned donors. Your nonprofit will want to have a dedicated point person for your planned giving program—this person will maintain relationships with existing legacy donors and promote the program to prospective donors.
  • Invite them to events. Dedicate some events specifically to the appreciation of your planned donors. These events can range from galas to local happy hours—you can even survey your planned donors to see which type of events they would prefer.
  • Send them gifts. These gifts can be flowers, merchandise, gift cards, or any other trinket. For an extra personal touch, send a gift that relates to your nonprofit in some way. For example, if your nonprofit is working towards clean water for everyone, you could send a water bottle.
  • Show your gratitude. Any gratitude-based communications should be sincere, thoughtful, and focused on what the donor is helping you achieve. Kwala suggests sending handwritten thank-you letters, personalized with the recipient’s first and last names.

Ultimately, you want your planned donors to feel happy with their decision to entrust their money or assets to your mission. Staying in touch and keeping them engaged is essential for both your relationship and for planning purposes. Keep your communications donor-centric and emphasize the long-term impact of planned gifts.

About the Author: Patrick Schmitt

Patrick Schmitt and fellow co-CEO Jenny Xia founded FreeWill at Stanford University’s Graduate School of Business in 2016. FreeWill’s charitable giving platform makes it easier for nonprofit fundraising teams to unlock transformational gifts, and to date has generated more than $6.6 billion in new gift commitments for thousands of nonprofits. Patrick hosts FreeWill’s popular webinar series, educating thousands of nonprofit fundraising professionals each month about planned and non-cash giving strategies.

Before FreeWill, Patrick was the Head of Innovation at, where he helped grow the organization to 100 million users in four years. Prior to that, he ran email marketing for President Obama and served as Campaign Director for