Perhaps you are wondering how can “planned giving” can benefit the mission of the KPN nonprofit.
Let’s begin with a planned giving definition along with information on the three primary ways donors can contribute planned gifts. In other words, here’s all you need to know about planned giving in a nutshell.
What is Planned Giving?
Planned giving is also referred to as gift planning or legacy giving.It is a donor’s intention to contribute a major gift to an organization beyond his or her lifetime. So, unlike an annual gift (an outright gift made for current use), a planned gift is for the future. Essentially, donors make arrangements for planned gifts in the present, but the gifts are actually doled out at a later date. Additionally, the major gifts contributed by a donor can be made as a part of their financial or estate plans.
So, by definition, planned giving is not limited by donors’ current wealth. Unlike the value of single donations, or donors who contribute on a recurring basis, planned giving enables you to contribute gifts that you wouldn’t ordinarily be able to make at the current time. The gifts aren’t dependent on one’s regular income. That’s why most planned gifts contributed by donors take the form of life insurance, equity, or real estate holdings (among others). Thus, even if a donor consistently contributed small gifts, their planned gift can be of a much higher value.
Top 3 Tax Vehicles for Planned Giving
In order for an individual to leave behind a major gift, planned gifts can take many different forms. They can take the form of real estate, personal property, life insurance, or even cash. However, the majority of donors seem to gravitate towards 3 primary planned giving options:
A gift (typically cash; personal property; real estate; stocks; or bonds) left behind in a will for a group, individual, or organization. There are four types of charitable bequests:
General Bequests: gifts of property taken from the assets of an estate.
Demonstrative Bequests: gifts that come from a source, such as a bank account.
Specific Bequests: gifts of personal property such as cash, jewelry, or other tangible assets.
Residuary Gifts: gifts that come from the remainder of any debts or expenses that have been paid along with other bequests that have been made.
Additionally, out of all the planned gift options a donor could choose from, bequests are the most popular. In a 2016 study conducted by Indiana University, it was reported that 42% of all planned gifts (given by donors in their subsample) were bequests.
A fixed sum of money paid to an organization each year. So, this typically takes the form of a simple contract between a donor and a charity. Also known as a charitable gift annuity, a donor transfers cash, security, or assets to a cause in exchange for a partial tax deduction. They can also receive a lifetime stream of annual income from the charity itself to this charity
A legal entity whereby an individual holds or invests property as its titular owner. This can be for one or more beneficiaries. Additionally, there are two types of charitable trusts:
Charitable Remainder Trust: a tax-exempt trust created to reduce an individual’s taxable income by dispersing their earnings to the beneficiaries of the trust over time. The remainder of the trust goes to the organization outlined in the trust.
Charitable Lead Trust: this is the inverse of a charitable remainder trust. The trust provides financial support to multiple causes over a specified period of time. The remainder of the trust then goes to the other beneficiaries (family members, friends, etc.)
Planned giving preserves a donor’s legacy. Donors first begin thinking about planned giving when they are nearing retirement age, between the ages of 40 and 60. So, donors may give to organizations that act in accordance with their personal values and beliefs. As a result, their planned gift symbolizes the relationship they’ve cultivated with the cause they’ve given to. If anything, they want their contribution to help secure the future of the organization. It also represents their commitment to positively impacting communities in actionable ways.
Leave a legacy gift to support KPN and provide life-improving programs to the men and women who served us and our country first.
Here are a few ways to make a planned gift:
Bequests: KPN in your will or trust.
Life Insurance and Retirement Plans: You can designate KPN as a full or partial beneficiary of your policies and accounts.
Your attorney or advisor may ask for the following information:
Legal Name: Knowledge Point Network .
Address: 213 Rainbow Drive #11319
Phone: (936) 446-7966
Should you have any questions or need additional assistance, contact us at [email protected]