Planned Giving Questions and Answers

Advice from planned-giving professionals

Nancy Herrold Strapp '78, guest columnist.

What is planned giving? How does it differ from making "regular" gifts?

Planned giving is about keeping the bigger picture in mind when supporting the charitable organizations that are meaningful to you. It means looking at your entire asset base, not just your current income, to make sure that the form of your gift yields the greatest benefits for both you and the recipient organization. It also means looking at long-term needs-your own the charity's-and integrating your giving with your income and estate plans. Planned gifts are set up in the here and now, but they support the work of the charity into perpetuity by creating endowment for the future.

What are the most popular type of planned gifts?

A very simple for of planned giving is to use appreciated stock rather than cash to fund a current gift to charity. This allows you to avoid capital gains taxes on the stock, often making a larger gift to charity while leaving tax-advantaged assets in your pockets.

The most typical planned gift is also the most straightforward: a bequest to the charity in your will. A bequest is planned now, but it does not benefit the charity until after your lifetime. Because a charitable bequest can be changed by any later will, it does not have any current tax advantages.

"Life income" gifts are also a popular form of planned gift. These gifts, such as charitable gift annuities and charitable remainder trusts, pay the donor (and may include his or her spouse) an income stream, typically for life. At the end of the life income payments, the remaining value of the gift is available to support the charity. These gifts can generate current income-tax deductions, and they often result in higher income than the donor was getting from the gifted asset.

While a planned gift is a charitable gift first and foremost, what are the benefits for the donor?

In the long run, a charitable bequest can generate estate-tax savings. Even greater tax advantages are available with a charitable bequest of retirement-plan assets, which would otherwise be highly taxed to the estate and surviving heirs.

Is there a "best" type of planned gift?

Yes! The best planned gift is the one that provides the greatest benefits for the donor and the charity he or she has chosen. Because there are so many options to structure gifts for greater benefits, and because there are so many differences in the income-and estate-tax treatment of various assets, it makes sense to consider all the possibilities.

Kenyon's chief planned-giving officer, Sindy L. Craig, can brainstorm with you about different options. You can also learn more about planned giving vehicles by visiting the College's website. It is also advisable to discuss your interest in charitable gifts with your lawyer when you plan your estate, and with your financial advisor at tax time. These advisors can help you make sure you are getting maximum advantage of your gifts plan, as well as your generosity.

Nancy Herrold Strapp, who graduated from Kenyon in 1978 as a political science major and went on to earn a law degree from Cornell University, is director of mission advancement at Christian Church Homes of Kentucky. Her career includes private law practice and full-time gift planning, as well as management of nonprofit organizations. She is an active volunteer with the Leave a Legacy ™ campaign to increase planned giving nationwide.