Planned giving (also called legacy giving) means gifts a donor arranges now that often mature later, frequently at death or through a retirement or estate vehicle. For a small nonprofit, the cheapest and highest-yield place to start is the humble charitable bequest, a line in someone's will or trust that names your organization. Bequests make up the large majority of all planned gifts, and the average bequest is many times larger than a typical annual donation, which is why even tiny orgs benefit from asking.
You do not need a foundation, an endowment, or a planned-giving officer to begin. A credible starter program is four things: (1) language inviting bequests and beneficiary designations on your website and appeals, (2) a simple way to record and thank donors who tell you they have included you, (3) a named legacy society to recognize them, and (4) a short policy for accepting (or declining) more complex gifts. The tax-heavy vehicles below, qualified charitable distributions (QCDs), charitable gift annuities (CGAs), and donor-advised funds (DAFs), can come later or be handled by a partner.
Not tax or legal advice
Dollar limits, age thresholds, and tax outcomes below are summarized for orientation and change frequently. Every figure marked "as of 2026 — verify" should be confirmed against current IRS guidance, and every donor should be told in writing to consult their own attorney, CPA, or financial advisor. Your nonprofit should never advise a donor on their personal tax or estate situation.
What planned giving actually includes
"Planned giving" is an umbrella term for gifts that are arranged through a will, trust, retirement account, insurance policy, or a specialized giving vehicle, rather than written as a check today. The National Council of Nonprofits and most practitioner sources group them into a few buckets, ordered here roughly from simplest to most complex for a small org to handle:
| Vehicle | What it is | Effort for a small org |
|---|---|---|
| Charitable bequest | A gift named in a will or living trust | Low, just invite it |
| Beneficiary designation | Naming your org on an IRA, 401(k), or life insurance policy | Low |
| QCD from an IRA | A direct transfer from an IRA by a donor age 70.5+ | Low to moderate |
| Donor-advised fund (DAF) grant | A grant recommended from a donor's DAF account | Low, just be findable |
| Charitable gift annuity (CGA) | Donor gives assets in exchange for fixed lifetime payments | High, needs counsel |
| Charitable remainder trust (CRT) | A trust that pays the donor, then your org | High, donor's advisors lead |
The strategic point: roughly the first four rows cost you almost nothing to enable and capture the overwhelming majority of planned-gift dollars for community organizations. Bequests alone account for over 90% of planned gifts (Giving USA / FreeWill, as of 2026 — verify). Gift annuities and remainder trusts are powerful but are best run with professional help, see major gifts for how these fit a relationship-based ask.
Bequests: the planned-giving workhorse
A bequest is simply a provision in a donor's will or revocable living trust that leaves your nonprofit a gift. It is revocable, costs the donor nothing during life, and is the single most common planned gift. Charitable bequests have represented on the order of 8 to 10% of all U.S. giving in recent years, totaling tens of billions of dollars annually (Giving USA, as of 2026 — verify).
There are four common forms a donor can choose, and you should offer suggested language for each:
- Specific bequest: a stated dollar amount or named asset ("I give $25,000 to...").
- Percentage bequest: a share of the estate ("I give 10% of my estate to..."). Often preferred because it scales with the estate and does not need updating.
- Residual bequest: what remains after other gifts and expenses are paid.
- Contingent bequest: a gift that takes effect only if other beneficiaries do not survive the donor.
Provide ready-to-paste sample language and, critically, your full legal name, mailing address, and EIN, the most common reason a generous bequest fails is an organization that cannot be identified. Tools like FreeWill let nonprofits offer supporters a free online will so they can complete a basic estate plan and include your org in the same sitting; this removes the biggest practical barrier (people never get around to making a will).
Bequest-ready checklist
- Publish your exact legal name, address, and EIN on a "Gifts in your will" page
- Offer sample bequest language for specific, percentage, residual, and contingent gifts
- Add one line to appeals and your website: "Have you remembered us in your will?"
- Offer a free will tool (e.g., FreeWill) and link it prominently
- Tell donors to confirm beneficiary language with their own attorney
Beneficiary designations: the easiest gift to ask for
Many donors do not realize that the assets passing through their will are often a minority of their estate. Retirement accounts (IRA, 401(k), 403(b)) and life insurance pay out by beneficiary designation, a form filed with the custodian, not by the will. That makes them one of the simplest planned gifts to arrange: a donor logs in, adds your organization as a full or partial beneficiary, and is done.
There is a tax angle worth understanding (and worth letting the donor's advisor explain): traditional IRA and 401(k) dollars left to an individual heir are generally taxable as income to that heir, but the same dollars left to a qualified charity pass free of income tax (IRS guidance on charitable beneficiaries, as of 2026 — verify). For that reason advisors frequently suggest leaving heirs the after-tax assets (like a home or brokerage account) and steering pre-tax retirement assets to charity. Your job is not to give that advice, it is to make the ask easy and provide your legal name and EIN.
Practical script for your materials: "You can support us beyond your lifetime in minutes, ask your IRA, 401(k), or insurance provider for a beneficiary form and name [Legal Name], EIN [xx-xxxxxxx], for a percentage of your choosing. Please let us know so we can thank you."
QCDs from IRAs: a gift donors can make right now
A qualified charitable distribution (QCD) is one of the few planned-giving moves that produces a gift today rather than at death, so it deserves a place in your annual fundraising too. A donor who is at least age 70.5 can direct their IRA custodian to send money directly from a traditional IRA to your charity. The amount is excluded from the donor's taxable income, and for donors subject to required minimum distributions (RMDs), a QCD can satisfy the RMD (IRS Pub 590-B, as of 2026 — verify).
Key parameters to state carefully and hedge:
- Age: donor must be 70.5 or older at the time of the distribution (as of 2026 — verify).
- Annual limit: up to $111,000 per individual for 2026, indexed for inflation (so a married couple with separate IRAs may each give up to that amount) (IRS, as of 2026 — verify).
- Direct transfer required: the funds must go straight from the IRA custodian to the charity. If the donor takes the money first, it does not qualify.
- No double benefit: a QCD is excluded from income, so the donor does not also take a charitable deduction for it.
- One-time split-interest option: a donor may make a single QCD of up to $55,000 for 2026 to fund a charitable gift annuity or charitable remainder trust (as of 2026 — verify).
Why QCDs matter more in 2026
Under the 2025 tax law (the One Big Beautiful Bill Act), beginning in 2026 itemizers can deduct charitable gifts only to the extent they exceed 0.5% of AGI, and non-itemizers get a new above-the-line deduction capped at $1,000 (single) / $2,000 (joint) (as of 2026 — verify). Because a QCD is excluded from income rather than deducted, it sidesteps both the floor and the cap, making it more attractive for older donors. This is general information, not advice, direct donors to a tax professional and IRS Pub 526 and Pub 590-B.
Gift annuities and donor-advised funds
Charitable gift annuities (CGAs) are a contract: a donor transfers cash or assets to your nonprofit, and in return your organization pays the donor (or another beneficiary) a fixed amount for life. Whatever remains when the income beneficiary dies belongs to your org. CGAs can be wonderful for loyal older donors who want both an immediate gift and reliable income, but they create a long-term financial liability and are regulated at the state level. Most small nonprofits should not self-administer CGAs, instead, partner with a community foundation or use specialized counsel and software (Crescendo, FreeWill, or PGCalc-style tools). Do not market CGA rates without professional support.
Donor-advised funds (DAFs) are a giving vehicle, not a deferred gift, but they belong in any planned-giving conversation. A donor contributes to a fund held at a sponsor (a community foundation or a commercial sponsor like a brokerage's charitable arm), takes their deduction when they contribute, then recommends grants to charities over time. From your side, a DAF grant looks like a check from the sponsor. To capture DAF giving you mainly need to be findable and easy to grant to: list your legal name and EIN, add a "Give from your DAF" note, and steward DAF donors like any major donor. Note that QCDs cannot be sent to a DAF (as of 2026 — verify), and a DAF cannot be used to fulfill a legally binding pledge, so keep pledge language soft.
Starting a simple legacy program and society
You can launch a credible legacy program in a quarter, with no new staff. The goal at the start is not to close complex gifts; it is to invite, record, and recognize intentions. Work in this order:
- Decide who to ask. Your best bequest prospects are not your wealthiest donors, they are your most loyal ones: long-tenured donors, volunteers, and board members. Consistency of giving predicts bequests far better than gift size.
- Make the ask visible. Add a "Leave a legacy" or "Gifts in your will" page, a line in your newsletter, and a check box on response cards: "I have included [Org] in my estate plans" / "Please send me information."
- Adopt a one-page gift acceptance policy. Spell out what you accept automatically (cash bequests, beneficiary designations, marketable securities) and what requires board review (real estate, CGAs, restricted gifts, anything with a liability). This protects you, see governance & compliance and your financial controls.
- Create a legacy society. Give it a name tied to your mission or founding year, and offer simple, meaningful recognition: a listing (if the donor consents), a yearly lunch or note, and a lapel pin or certificate. Membership requires only that the donor tells you they have included you, no proof or amount needed.
- Steward relentlessly. A bequest intention can be revoked at any time, so the relationship matters more than the paperwork. Thank, update, and involve legacy donors for the rest of their lives.
Quarter-one legacy launch checklist
- One-page "Gifts in your will" page with legal name, address, EIN, and sample language
- Free online will tool linked (e.g., FreeWill)
- Estate-intention check box added to appeals and online forms
- One-page board-approved gift acceptance policy
- Named legacy society with simple recognition and an internal tracking list
- A plan to thank and update each legacy donor at least yearly
For the relationship and board pieces, pair this with donor development and your strategic plan so legacy targets are realistic.
Worked example: what one bequest can do
Numbers below are illustrative, every estate and tax situation differs, so treat this as a model, not a promise. Meet "Marian," a retired teacher who has given $500 a year for 18 years to a small literacy nonprofit. In lifetime gifts she has contributed about $9,000, valuable, but modest. When the org adds one line to its newsletter ("Have you remembered us in your will?") and offers a free online will tool, Marian completes a will and leaves a 10% residual bequest.
| Detail | Figure |
|---|---|
| Marian's annual gift | $500 |
| Years giving | 18 |
| Total lifetime cash gifts | ~$9,000 |
| Estate value at death (after debts) | $650,000 |
| Residual bequest to nonprofit (10%) | $65,000 |
| Bequest as a multiple of lifetime giving | ~7x |
The $65,000 bequest is roughly seven times everything Marian gave in her lifetime, consistent with national data showing the average bequest in the tens of thousands of dollars while annual gifts are in the hundreds (FreeWill / Giving USA, as of 2026 — verify). Now scale it. Suppose the org's legacy society reaches just 10 committed members of Marian's profile:
| Scenario | Members | Avg. bequest | Potential future gifts |
|---|---|---|---|
| Conservative | 10 | $45,000 | $450,000 |
| Mid | 10 | $65,000 | $650,000 |
That is potentially a half-million dollars or more in unrestricted future revenue, generated almost entirely by a newsletter line, sample language, a free will tool, and good stewardship. The point of the example is not the exact figure (gifts mature over years and intentions can change); it is the leverage: planned giving converts loyalty you already have into transformational gifts at almost no cost. Build the operating discipline to receive and steward those gifts well, see operating reserves for how legacy income can seed long-term stability rather than plugging this year's gaps.
Fund your mission from everyday local spending, while you build a legacy program
Legacy gifts mature over years. In the meantime, recurring unrestricted revenue keeps the lights on. With Good Circles, supporters pick your cause once, then a share of their everyday local spending funds you automatically, an estimated $72 per active supporter per year (about $36,000/year from 500 supporters). It is recurring, unrestricted, and free for nonprofits. Figures are estimates that vary with supporter activity.
Claim a Founding Nonprofit spot →Sources & tools
Free first
- IRS Publication 526 (Charitable Contributions) — The IRS's plain-language guide to what is deductible, substantiation rules, and 2026 changes like the 0.5% AGI floor for itemizers.
- IRS Publication 590-B (IRA Distributions / QCDs) — The primary source for qualified charitable distribution rules, including the age 70.5 requirement and annual limits, verify current figures here.
- National Council of Nonprofits — Free explainers and templates on gift acceptance policies, fundraising, and compliance for small and mid-sized organizations.
- FreeWill (free online will tool) — A free will-writing tool nonprofits can offer supporters so they can complete a basic estate plan and include your org in the same sitting, removing the biggest barrier to bequests.
Paid — optional labor-savers
- FreeWill / Crescendo planned-giving platforms — Subscription tools for bequest marketing, beneficiary designations, gift calculators, and QCD facilitation. Worth it when Worth it once legacy giving is a real priority and you want to systematize asks, calculators, and donor tracking beyond a spreadsheet.
- Planned-giving counsel / gift annuity administration — Specialized attorneys, consultants, or a community foundation partner to design and administer charitable gift annuities and complex estate gifts. Worth it when Worth it before you ever offer a charitable gift annuity, accept real estate, or handle a complex restricted estate gift, these carry legal and financial liability you should not self-administer.
Last verified 2026-06-16. Figures and rules change — verify at the source before you act.
FAQ
What is the difference between planned giving and a regular donation?
A regular donation is a gift you make today, typically cash. Planned giving covers gifts arranged through a will, trust, retirement account, insurance policy, or a specialized vehicle, and many of them mature later, often at death. The most common planned gift by far is a charitable bequest named in a will or living trust, and bequests make up over 90% of all planned gifts. A small nonprofit can start simply by inviting bequests and beneficiary designations, which cost almost nothing to enable.
Who can make a QCD and how much can they give in 2026?
A donor who is at least age 70.5 can make a qualified charitable distribution by directing their IRA custodian to send funds directly to a qualified charity. The funds must go straight from the IRA to the charity, not to the donor first. For 2026 the annual limit is up to $111,000 per individual, indexed for inflation, and a donor may make a one-time QCD of up to $55,000 to fund a charitable gift annuity or charitable remainder trust. These figures should be verified against current IRS guidance, and a QCD is excluded from income rather than deducted, so the donor does not also take a charitable deduction for it.
Does a small nonprofit need staff or an endowment to start a legacy program?
No. A credible starter program is four things: sample bequest language plus your legal name, address, and EIN on your website and appeals; a simple way to record and thank donors who tell you they have included you; a named legacy society for recognition; and a one-page gift acceptance policy. You can launch this in a quarter with no new staff. Complex vehicles like charitable gift annuities can wait or be handled through a community foundation or specialized counsel.
Why are retirement assets often the best thing to leave to charity?
Traditional IRA and 401(k) dollars left to an individual heir are generally taxable as income to that heir, but the same dollars left to a qualified charity pass free of income tax. That is why advisors often suggest leaving heirs after-tax assets like a home or brokerage account and directing pre-tax retirement assets to charity through a beneficiary designation. A beneficiary designation is also one of the easiest gifts to arrange because it is a quick form filed with the account custodian rather than a change to the will. Donors should confirm specifics with their own tax advisor.