TLDR
Most mid-sized nonprofits underinvest in planned giving not because the opportunity isn't there, but because it feels complex and distant. A basic bequest program — a legacy society, simple gift acceptance policies, and a disciplined habit of asking loyal donors if they've included your organization in their plans — can be built by one development staff person in a few months and will generate realized gifts for years.
Most mid-sized nonprofits have donors who would include them in a will if asked. Many of those same donors have given for ten or fifteen years, believe deeply in the work, and have modest to significant estate assets. Nobody has ever asked them.
A planned giving program doesn’t require a dedicated staff position, complex legal infrastructure, or a sophisticated marketing operation. It requires a basic understanding of gift types, a small set of policies, a legacy society structure, and the discipline to have the conversation with the right donors.
What Planned Giving Is
Planned giving — sometimes called legacy giving or deferred giving — refers to charitable gifts made through estate planning vehicles rather than through annual giving. The gift is typically received by the organization after the donor’s lifetime or after a defined term.
The most common types:
Bequests: A specific gift named in a will or trust. The most common form of planned gift and the most accessible. The donor includes language in their estate documents designating a specific amount, a percentage of the estate, or the residual estate (after other bequests) to your organization.
Charitable Remainder Trusts (CRTs): The donor transfers assets to a trust, receives income from the trust during their lifetime (or for a term of years), and the remainder passes to the organization upon termination. These are complex, typically involve significant assets ($100,000+), and usually require the donor’s estate attorney or financial advisor to set up.
Life Insurance: The donor names your organization as a beneficiary of a life insurance policy, or transfers ownership of an existing paid-up policy to your organization. Simpler than trusts; the gift is received upon the donor’s death.
Donor Advised Fund (DAF) succession recommendations: A donor can specify in their DAF agreement that the remaining balance be directed to specific organizations upon their death. This is separate from their annual DAF grant-making.
Retirement account beneficiary designations: Naming your organization as a beneficiary of an IRA, 401(k), or other retirement account. Often tax-advantageous because retirement assets pass to charities free of income tax.
For most small-to-mid-sized nonprofits, the realistic focus is bequests and beneficiary designations. The other vehicles are valuable when they arise, but the building of a planned giving program should start with the most accessible and most common gift type.
Why Most Mid-Sized Nonprofits Underinvest
The reasons are understandable but not sound.
It feels distant: Planned gifts are received years or decades after the commitment. Development operations under revenue pressure focus on what closes this fiscal year.
It feels complex: The legal terminology around trusts and estate planning is unfamiliar. Many EDs and Development Directors worry about saying the wrong thing.
It feels morbid: The conversations necessarily touch on mortality. Many staff are uncomfortable with that.
The counterarguments: the average bequest is many times larger than a donor’s annual gift — often by an order of magnitude or more. The time investment in a planned giving program is modest relative to the eventual return. And the conversation, handled well, is not morbid — it’s honoring the donor’s long-term commitment to work they believe in.
The Bequest: Starting Where Most Organizations Should
A bequest is an organization’s instruction in a will, trust, or codicil. The donor tells their estate attorney what they want to leave to your organization, and it happens upon their death.
There are three main types of bequest language:
Specific bequest: “I give to [Organization Legal Name], Tax ID [EIN], the sum of $25,000.”
Percentage bequest: “I give to [Organization Legal Name] ten percent (10%) of my residuary estate.”
Residual bequest: “I give all the rest, residue, and remainder of my estate to [Organization Legal Name].”
Percentage and residual bequests often produce larger gifts because they’re tied to the estate’s actual value rather than a fixed amount.
You should have sample bequest language ready to provide when donors ask. Include your legal name and EIN. The donor’s attorney will refine the language for their specific estate documents.
How to Market Bequest Giving Without Being Morbid
The framing that works is legacy, not death.
Legacy society: Create a named society for donors who have included your organization in their estate plans. The name should connect to your mission (“The [Mission Word] Legacy Society,” “The Founders Circle”) and should feel like an honor, not a task.
Invitation language: “Have you considered including [Organization] in your estate plans?” is a simple, non-threatening opening that most loyal donors respond to thoughtfully. It assumes positive intent. It doesn’t demand action. It opens a conversation.
Impact framing: “Your annual gifts have supported our work for 12 years. Some of our most loyal donors tell us they want to ensure this work continues for the next generation, and they’ve done that by including us in their estate plans.” This connects planned giving to the donor’s existing relationship with the mission, not to abstract estate planning concepts.
Timing: Planned giving conversations belong with donors who are in the appropriate life stage (generally 60+, though some donors think about planned giving earlier) and who have demonstrated long-term loyalty. A first-time donor is not a planned giving prospect. A ten-year donor who gives annually and attends events is.
Channels: Planned giving mentions belong in:
- The donor newsletter (a sidebar or feature story about the legacy society, not the front page)
- Acknowledgment letters for major donors or long-tenure donors
- The organization’s website, under a “Ways to Give” or “Legacy” page
- In-person conversations with high-potential prospects
What planned giving should not be: a transactional ask tacked onto year-end appeals. The giving society context frames it as a distinct and meaningful decision.
The Disclosure Process: When Donors Tell You
When a donor tells you they’ve included your organization in their estate plans, this is called a bequest intention notification. It is not a gift — it’s a statement of intent, which can be changed at any time.
What the organization does:
-
Thank them personally and meaningfully. A call from the ED is appropriate for almost every notified bequest intention.
-
Send a formal recognition letter welcoming them to the legacy society, confirming their membership, and explaining any benefits.
-
Record the intention in your donor management system. The notation should include: the type of planned gift, the date notified, the amount or percentage if known (often unknown for bequests), and the name and contact information for their estate attorney if provided.
-
Invite them into the legacy society. Send the member benefits, add them to any legacy society communications.
-
Do not pressure them to disclose the amount. Many donors are uncomfortable sharing the specific value of their planned gift, and many wills change over time. The important record is the existence and type of intention, not the projected value.
Gift Acceptance Policies
A gift acceptance policy is the organization’s written policy on what types of gifts it will accept and under what conditions. Having one protects the organization from accepting gifts that create liability or administrative burden without corresponding benefit.
At minimum, your gift acceptance policy should address:
Cash and publicly traded securities: Accept without restriction.
Bequests: Accept all types (specific, percentage, residual), with a statement that the organization reserves the right to disclaim gifts that are legally problematic or inconsistent with mission.
Real estate: Most smaller organizations should not accept real estate without careful review. Real estate gifts carry environmental liability, carrying costs (taxes, maintenance), and potential difficulty in liquidating. Your policy should require board approval and legal review before acceptance, and may specify that only readily saleable, unencumbered property will be accepted.
Closely held business interests: Require board approval. These can be complex to value and difficult to liquidate.
Retirement assets and life insurance: Accept as beneficiary designations.
Charitable remainder trusts and other split-interest gifts: Consider carefully whether you have the capacity to administer them. Many small nonprofits accept these gifts but work with a community foundation or larger organization to handle administration.
The policy should also address restrictions: under what conditions will you accept restricted gifts, and who has authority to sign a gift agreement with donor-specified restrictions?
The Legacy Society: Naming, Benefits, and Cultivation
The legacy society is the organizational structure that houses your planned giving relationships. Its functions:
Recognition: Planned givers receive formal recognition in the annual report (with permission) and in any legacy society communications. This signals to other donors that the society exists and that planned giving is expected and honored.
Community: A small annual gathering — a dinner, a behind-the-scenes tour, a reception with program staff — for legacy society members creates a sense of community and belonging among donors who’ve made long-term commitments. This doesn’t need to be expensive to be meaningful.
Cultivation: Legacy society members are among your highest-value relationships. They should receive the same stewardship attention as major donors. Personal calls from the ED, impact reports, advance notice of significant organizational decisions.
Prospecting: Legacy society materials serve as soft marketing to other loyal donors who see the society mentioned. “Join the [Name] Legacy Society” in the annual report plants a seed without requiring a direct ask.
Tracking Planned Giving Intentions in Your CRM
Planned giving intentions need to be tracked in your donor management system as carefully as any other gift type.
What to record:
- Gift type: bequest, beneficiary designation, life insurance, CRT, etc.
- Status: notified intention, confirmed in writing, received (estate in process), completed
- Approximate value or range: often unknown, but record if shared
- Date intention was communicated
- Source of notification: donor self-reported, attorney contact, estate notice
- Notes on the donor conversation and any restrictions indicated
Track planned gifts separately from annual giving so they don’t inflate your current-year retention metrics or create false impressions in revenue reports. Many donor management systems have a planned giving module or a custom field set for this purpose.
When a bequest intention is received from an estate, that becomes a gift record — an actual pledged receivable, with the amount once determined by the estate settlement process.
GrantPipe tracks planned giving intentions alongside your full donor history, so legacy society members are visible in the same system where you manage annual fund renewals, stewardship touchpoints, and restricted fund allocations. The audit trail logs every interaction and gift record update, giving you documentation of the full donor relationship over time.
For organizations building their first planned giving program, the Major Donor Cultivation Playbook includes a planned giving outreach framework. Start a free trial to see how your planned giving pipeline connects to your overall development picture.
Free resource
Get the Nonprofit Grant Compliance Checklist
A practical checklist for post-award grant compliance: restricted funds, reporting cadence, audit prep, and common failure points. Delivered by email.