How to Leave a Gift to Charity

Planned Giving in Your Last Will

An important part of the estate planning process is deciding how you would like to distribute your assets, such as any savings, investments, real estate, or personal property, using your Last Will and Testament.
One of your goals may be to leave assets to a charity or non-profit organization. This form of donation is known as an endowment, legacy gift, or planned giving.
Setting up an endowment in your Last Will is a good way for you to leave a personal legacy and support a cause that has meaning to you. There are many options for planned giving, so it’s useful to know what assets you can leave to charity and what type of donation will suit your financial position.

Benefits of Donating to Charity in Your Last Will

There are many reasons to consider planned giving in your Last Will that can benefit both you and the people and charities that you leave gifts to.
Donating to a charity in your Will can:
Help sustain charities and touch people’s lives. Charities and non-profit organizations have limited budgets and often depend on private funding to continue doing their work. Leaving a legacy gift in your Last Will can help maintain a charitable organization and touch people’s lives for years to come.
Leave a personal legacy. Planned giving is an opportunity to contribute to a cause that’s meaningful to you. An endowment to a foundation that made a difference in your life will allow your memory to live on.
Offer financial benefits. Depending on the type of gift you make, you or your estate can enjoy certain tax advantages.
For example, to lower your tax burden during your lifetime, you can create a life insurance policy with a charity as the beneficiary, and claim the annual cost as a charitable donation. If you’d like to reduce your estate tax burden after your death, you can make a monetary donation in your Last Will.
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Types of Legacy Gifts

You have many options for planned giving, so it’s important to be clear in your instructions so that your last wishes are properly carried out.
The most common types of legacy gifts are:
  • General gift: a specific amount of money or percentage of your estate
  • Residuary gift: any remaining assets after all other requests have been fulfilled
  • Specific gift: the donation of a particular item, such as furniture or a vehicle
  • Contingent gift: a donation based on certain conditions being met, such as your main beneficiary passing away before you

Types of Assets You Can Give to Charity

Many people choose to make a monetary donation to charity in their Last Will, however, you aren’t limited to that option.
Plenty of charities and non-profit organizations will accept other assets as gifts, including:
  • Real estate, such as land or residential property
  • Personal property, including vehicles, artwork, antiques, or jewelry
  • Proceeds of your life insurance policy or your retirement plan
  • Investments such as stocks and mutual funds
  • Partnership interest in a business

Choosing a Charity for Your Legacy Gift

Many registered charities and nonprofit organizations have legacy giving programs. If you already have an organization in mind, it’s worth looking into the planned giving options that they offer.
If you need some help choosing a charity for your legacy gift, following these steps may guide your decision.
Identify the causes you value. There is a broad range of charitable causes, but most fall under the categories of environment, health, education, arts and culture, and international aid.
You may want to support an organization you’ve helped in the past, or a cause that has touched you or a loved one. You can also consider whether you’d like to donate to a local cause, or give to a national or international organization.
Evaluate your options. Once you’ve identified a cause you’d like to support, you can research the organizations that currently exist and make a list of your potential choices.
When you evaluate these charities, consider their mission statement, measurable goals, results over time, and financial transparency.
Research planned giving programs. Every planned giving program is a little bit different and can even vary within the organization depending on your location. For that reason, it’s helpful to read about the charity’s program on their website or contact them to discuss your options.

How to Include a Legacy Gift in Your Last Will

Once you’ve decided to include a legacy gift in your estate plans, you can either create a Last Will and Testament or revise your existing one.

When you’re writing your Will for the first time:

  1. Decide what type of legacy gift best suits your estate planning goals and financial position.

    For example, you can give a specific amount, leave a percentage of your estate, or donate the residue of your assets.

  2. Decide which assets, such as money or personal property, you’d like to leave to charity.

  3. Confirm your organization’s legal name, charitable registration number, and preferred wording for legacy gifts. Use the exact language so there is no ambiguity in your Will.

  4. When you create your Last Will, designate your charity as a beneficiary of your assets and assign them a gift.

  5. It’s a good idea to name an alternate beneficiary for your legacy gift in case your foundation no longer exists when you pass away.

  6. Let your charity know that you’ve thought of them in your estate plans. Charities often take the opportunity to thank donors in various ways.

When you already have a Last Will:

  • If you’re changing your main beneficiary or making a major change to the distribution of your assets, it’s a good idea to create a new Last Will. Follow the directions provided above for including a legacy gift in your new Will.

  • If you’re adding a charity as a beneficiary, you can amend or change your Last Will with a Codicil (also known as an amendment or addendum).

  • If you do not wish to make any changes to your Will, you can ask your family and friends in your End-of-Life Plan to send their condolences by donating to your favorite charity instead of sending flowers.
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The Importance of Leaving a Legacy

The survival of charities and nonprofit organizations often depends on private funding. While many people give to charities during their lifetime, a good option for you may be to leave an endowment in your Last Will. There are various ways to give back, and you can work with your charity of choice to find the type of gift that will work for you.
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