The Association of Fundraising Professionals defines planned giving in the following way:

a systematic effort to identify and cultivate a person for the purpose of generating a major gift that is structured and that integrates sound personal, financial, and estate-planning concepts with the prospect’s plans for lifetime or testamentary giving. A planned gift has tax implications and is often transmitted through a legal instrument, such as a will or a trust.

In a nutshell, planned giving is the solicitation of major gifts for a nonprofit, often contributed by an individual donor through a will, bequest, or trust.

It is vital for nonprofit organizations to diversify their sources of revenue, especially during difficult economic times, and planned giving can play an important part in a nonprofit’s overall fundraising plan. Major gifts often make up the top 10-20% of gifts received by an organization and may account for as much as 70-80% of its overall fundraising revenue, according to Kent Dove, et al. Thus, planned giving can play an important part in diversifying your nonprofit’s sources of income and ensuring its long-term financial health.

What constitutes a “major gift” will vary from one organization to another – a large nonprofit may consider a major gift to be a donation of $100,000 or more, while a small start-up may consider $1,000 and up to be a major gift. They do not have to be made with cash or as outright gifts. The gift can be structured over a period of time or can be deferred, and it can involve a variety of assets, including stock, securities, and property as well as cash.

To learn more about this topic, selected resources below may also be helpful.

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