A Planned Giving Primer

The idea of “planned giving” may seem complex, but it simply means making a charitable gift in such a way that you maximize the tax and financial benefits that philanthropy offers. In order to do this, planned gifts are made in consultation with financial experts as part of one’s overall financial or estate plan. These gifts may be one-time donations, a series of payments over a set period of time, or ongoing support for the charity of your choice. They may be immediate gifts for use today, deferred gifts for use in the future, or a combination of the two.

In other words, planned giving takes a variety of forms. But no matter what vehicle you choose, planned giving is designed to allow you to make the most of your charitable resources while also offering you valuable tax advantages, or even an annual income. I like to say to my clients that planned giving is a partnership: it is meant to support you while you support your cause.

There are lots of different ways to make a planned gift. While bequests account for a large percentage of planned gifts, there are many other options available to donors. These include gifts of life insurance, real property, or publicly listed securities, or even using a gift of cash to purchase a charitable gift annuity.

Each planned giving vehicle offers particular advantages, which can be explained in detail by your financial advisor. To give just one example, the government’s elimination of capital gains tax in 2006 on donations of appreciated securities (including stocks, bonds, and mutual funds) has made this an increasingly appealing option for donors who have seen large capital gains in their portfolio.

The MUHC Foundation can provide more detailed information about how all of the different planned giving options work and what benefits each of them can afford. I think the most important point to keep in mind, however, is that the flexibility of planned giving means that almost anyone, no matter what their age or means, can consider making a donation of this kind. After all, planned giving does not require great wealth: just sound financial planning.

It’s important to know which planned giving vehicle is right for you. The decision to make a planned gift is a very personal one. It depends both on one’s financial situation and one’s charitable aims. Every donor has different needs and goals. In order to take advantage of the financial benefits available, it is important to match the correct planned giving vehicle to your specific financial circumstances. It is always recommended that you contact your attorney or personal financial advisor to fully understand the financial implications of your intended gift.

The MUHC Foundation’s Planned Giving Committee is also here to answer questions about choosing the right planned giving vehicle. Please contact Dolly Shinhat-Ross, the Foundation’s Planned Giving Officer at 514-931-5656 for more information.