Planned Giving FAQ: 19 Questions Nonprofits Ask About Bequests, CGAs, and Legacy Programs

Who this is for

This FAQ is for development directors, executive directors, and board members at mid-sized US nonprofits who want a credible answer to “should we have a planned giving program?” or who already have one and are wondering whether to expand it. It is also useful for board members evaluating a proposed gift acceptance policy or major gift officers being asked to add legacy conversations to their portfolios.

It assumes no prior planned giving expertise. The terms are defined in plain language and the legal and tax points are accurate as of late 2026, but nothing here is legal or tax advice — donors making planned gifts should always consult their own attorney and tax advisor.

How to navigate

The early questions cover what planned giving is and the basic vehicles. The middle covers operations — gift acceptance policies, identifying donors, asking, tracking. The later questions cover the long-term build: stewardship, scaling, and how to know when to bring complex programs in-house. Skim the table of contents and jump to what you need.

A reminder about scale: most planned giving “best practices” published online describe programs at universities and large national charities with dedicated planned giving officers and seven-figure marketing budgets. The advice in this FAQ is calibrated for organizations with a one or two-person development office and an annual budget between $500K and $10M. Different scale, different rules.

Frequently asked questions

What is planned giving?

Planned giving is fundraising from gifts that are arranged now but transfer to the nonprofit at a future date — typically at the donor’s death — or that combine a current gift with future tax or income benefits. The most common vehicles are bequests in a will or living trust, beneficiary designations on retirement accounts and life insurance policies, charitable gift annuities, and charitable remainder trusts. Planned giving is sometimes called legacy giving, gift planning, or deferred giving. It matters because the gifts are typically much larger than annual gifts from the same donor, and because the donor pool — long-term loyal donors with no children or with adult children — is larger than most development teams realize.

What is a bequest?

A bequest is a gift made through a donor’s will or living trust that takes effect at the donor’s death. Bequests can be specific (a named asset or dollar amount), residual (a percentage of what remains after other bequests and debts are paid), contingent (taking effect only if other beneficiaries do not survive), or general (a fixed amount paid from any source). Residual bequests are the most valuable to nonprofits over time because they grow with the donor’s estate. Bequests cost the donor nothing during life, are revocable, and require no minimum amount — which makes them the easiest planned gift to ask for and the most common to receive.

What is a charitable gift annuity?

A charitable gift annuity (CGA) is a contract between a donor and a nonprofit. The donor transfers cash or appreciated securities to the nonprofit. In return, the nonprofit pays the donor (and optionally a second beneficiary) a fixed income for life. When both income beneficiaries die, the remaining principal goes to the nonprofit. The donor receives an immediate partial tax deduction. CGAs are regulated at the state level, and most states require the issuing nonprofit to register and maintain reserve assets. The American Council on Gift Annuities (ACGA) publishes suggested rates that most issuing charities follow. Mid-sized nonprofits often partner with a community foundation to issue CGAs rather than running the program in-house.

What is a charitable remainder trust?

A charitable remainder trust (CRT) is an irrevocable trust set up by the donor (not the nonprofit) that pays income to the donor or another beneficiary for a term of years or for life, with the remainder going to one or more named charities at the end of the term. There are two main types: the charitable remainder annuity trust (CRAT), which pays a fixed dollar amount, and the charitable remainder unitrust (CRUT), which pays a percentage of the trust assets revalued annually. CRTs are typically funded with $250,000 or more in appreciated assets — real estate, closely held stock, or marketable securities — to make the legal and administrative costs worthwhile.

What is a beneficiary designation gift?

A beneficiary designation gift is made by naming a nonprofit as the beneficiary (or partial beneficiary) of a retirement account, life insurance policy, donor-advised fund, or commercial annuity. The donor changes a form with the financial institution; no will or trust amendment is required. These gifts are revocable, simple, and tax-efficient — particularly for retirement accounts, where leaving an IRA to a charity rather than to children avoids both estate tax and the income tax that heirs would owe on distributions. Beneficiary designation gifts are often called the “simplest planned gift” and should be in every basic legacy program because the donor can establish one in 10 minutes online.

How big is the average planned gift?

The most reliable benchmark is from Giving USA and the Lilly Family School of Philanthropy: charitable bequests in the United States totaled approximately $45.84 billion in 2023, the second-largest single source of bequest giving on record. The average realized bequest at the nonprofit level falls in a wide range depending on donor income, but a defensible working figure for a mid-sized nonprofit’s planning is $35,000 to $50,000 per realized bequest, with a long tail of much larger gifts. CGAs typically have a minimum funding amount of $10,000 to $25,000. CRTs typically start at $250,000.

How long does it take to receive a bequest after a donor dies?

Estate settlement in the United States typically takes 9 to 24 months from the date of death. Simple estates with clear wills and no contested provisions may close in 9 to 12 months. Complex estates — closely held businesses, multiple real estate holdings, contested heirs, federal estate tax filings — often run 18 to 36 months. The nonprofit typically receives a notice from the estate’s executor or attorney within 60 to 120 days, followed by interim distributions and a final distribution. Track every notified bequest in a separate pipeline with status, expected amount, and last-contact date with the estate’s representative.

Should we offer charitable gift annuities?

Probably not, at first. CGAs require state registration in many states, ongoing reserve fund management, actuarial accounting, and a reliable way to make payments to annuitants for the rest of their lives. The administrative cost only makes sense above a certain volume — usually 15 or more active CGAs. For most mid-sized nonprofits, the better path is to partner with a community foundation that issues CGAs in your name. Your donor gets the same tax benefit and lifetime income; you get the residual value at the end without the regulatory burden. Once your program reaches scale, you can evaluate whether to bring CGAs in-house.

What is a gift acceptance policy?

A gift acceptance policy is a board-approved written document that defines what kinds of gifts your organization will accept, what kinds it will not, and the process for evaluating unusual gifts. It typically covers cash, marketable securities, real estate, closely held stock, life insurance, retirement accounts, charitable trusts, gift annuities, tangible personal property, and cryptocurrency. The policy specifies who has authority to accept which types of gifts and at what dollar thresholds, and it names the staff or board committee responsible for reviewing complex gifts. A clear policy protects you from accepting illiquid, encumbered, or reputationally risky gifts that cost more to manage than they are worth. It is the first document a planned giving program needs.

How do I identify potential planned giving donors?

The strongest signal is loyalty over recency or amount: donors who have given for 10, 15, or 20 consecutive years are far more likely to make a planned gift than donors who recently made a major gift. Other useful signals include age (most planned gift commitments are made between ages 55 and 75), absence of children (or adult children with established financial security), prior expression of interest (donors who responded to legacy mailings or attended legacy events), and giving frequency (recurring monthly donors index high). Run a query against your CRM for donors with 10+ consecutive years of giving and start there. The list will be smaller and more qualified than any wealth-screened list.

What is a legacy society?

A legacy society is a recognition program for donors who have informed the nonprofit that they have included it in their will, trust, or other planned gift. Membership is symbolic — there is no required minimum gift size — and the only entry requirement is documentation of intent. Most legacy societies offer recognition in publications, an annual luncheon or recognition event, occasional updates from leadership, and a tangible item like a pin or certificate. The purpose is twofold: stewardship for current members, and visibility that prompts other loyal donors to join. Naming the society after a founder, a place, or a date associated with the organization adds dignity and makes the membership feel meaningful.

How do I ask for a planned gift?

Most planned gift conversations begin with a question, not an ask: “Have you considered including a charitable gift in your estate plans?” If the donor says yes, the next question is whether the nonprofit is among the charities being considered. If the donor says no, the conversation often becomes educational — what a bequest is, what a beneficiary designation is, how simple they are. Direct asks for specific gift amounts are rare in planned giving; most asks are for inclusion at any level. The conversation works best in person or by phone, framed around the donor’s values and life story rather than the nonprofit’s funding needs.

What is the IRA charitable rollover?

The IRA charitable rollover, formally known as a Qualified Charitable Distribution (QCD), allows a donor age 70½ or older to transfer up to $105,000 per year (2024 figure, indexed annually) directly from a traditional IRA to a qualified charity. The distribution is excluded from the donor’s taxable income and counts toward the donor’s required minimum distribution (RMD) for the year. QCDs do not produce a charitable deduction because the income was never taxed in the first place — but for donors who do not itemize, that is more valuable than a deduction. QCDs cannot fund split-interest gifts (CGAs, CRTs, donor-advised funds) except under a one-time $50,000 exception added in 2023.

How do I track planned giving intentions?

Three artifacts: a planned gift intention record per donor, a documentation file (the donor’s letter, the will excerpt if shared, or a signed statement of intent form), and a pipeline view that shows expected gifts by stage — informed, documented, notified, in probate, distributed. The intention record should include vehicle type, expected amount or percentage, contingencies, the donor’s attorney or estate planner if shared, and notes on any restrictions. Most nonprofit CRMs handle this with a custom record type or a flagged “planned gift” classification. Spreadsheets work for the first 30 to 50 intentions. Beyond that, a structured tracker prevents lost prospects when staff turns over.

Are planned gifts restricted?

They can be, but most are not. Donors making bequests rarely add detailed restrictions; the most common restriction is “for general operating purposes” or “where the need is greatest.” When restrictions appear, they are typically for endowment, scholarships, capital projects, or specific programs the donor cared about during life. Document every restriction in your fund accounting system and ensure spending complies. Unrestricted bequests should usually flow to a board-designated reserve or quasi-endowment rather than current-year operations, so the gift compounds and produces value for years rather than masking a budget gap once.

What is a stewardship plan for planned gift donors?

Planned gift donors need stewardship more than annual donors, not less, because the gift is decades from realization and revocable until death. A working plan includes: handwritten thank-you within 7 days of the intention being shared, an annual update letter from the executive director or board chair, an invitation to one legacy society event per year, a personal call from the development director on the anniversary of the commitment, and inclusion in the nonprofit’s leadership communications. The goal is for the donor to feel known by name and to know that their commitment is held with care. A donor who feels neglected can change their will.

Should we use a planned giving consultant?

Probably not for the basics. A simple bequest program can be launched in-house with a one-page gift acceptance policy, a section on the website, and one annual mailing or email to long-term donors. Consultants add value when you are setting up a CGA program, evaluating a complex non-cash gift (real estate, closely held stock), training the board to discuss legacy with their networks, or building a marketing program targeting professional advisors. Pick consultants by case studies at organizations of similar size, not by certifications. The Partnership for Philanthropic Planning (PPP) and the Association of Fundraising Professionals (AFP) maintain directories.

How long does it take to build a planned giving program?

Realistic timeline for a mid-sized nonprofit starting from zero: 3 to 6 months to build the infrastructure (gift acceptance policy, website page, intention tracking, basic donor communications), 12 to 18 months to identify and cultivate the first cohort of donors, and 5 to 10 years before realized gifts start arriving in numbers that meaningfully change the budget. The work is slow and the patience is real. The compensation is that planned gifts compound — a steady stream of $50,000 bequests at 6 to 10 per year is transformative for an organization with a $3M annual budget.

How does GrantPipe support planned giving?

GrantPipe tracks long-term donor relationships, planned gift intentions as a custom record type, restricted-fund allocations from realized bequests, and the multi-year stewardship cadence that legacy programs require. Pipeline views, anniversary reminders, and segmented mail-merge fields let a one-person development office run a serious legacy program without building it on top of spreadsheets. For organizations launching their first program, the platform pairs with a recommended written gift acceptance policy and a basic website module — the bones of a credible legacy society without the cost of a CGA-platform vendor.

Where to go next

For step-by-step setup, see the planned giving program setup guide. For donor cultivation conversations that often lead to legacy commitments, see the major gift cultivation guide and the donor stewardship 12-month plan.