Bequests and planned gifts: legacy giving for small charities

This guide is for small charities that have never thought of themselves as getting "planned gifts," which may be most of them. A planned gift is a gift a donor arranges now that usually reaches the charity later, most often through a will or by naming the charity as a beneficiary of an account. A bequest is a gift in a will. After reading, you'll know how the common kinds of legacy gift work, what to put on your website so a donor's lawyer can get it right, how to talk about legacy giving without being pushy, a little about the more complex options, and how to thank and look after legacy donors.

You don't need a planned giving officer or a big endowment to receive legacy gifts. Many come from loyal, ordinary donors who simply want the work to continue.

The common kinds of legacy gift

• A gift in a will (bequest). The donor's will leaves the charity a set amount, a percentage of what's left after other gifts and debts (the "residue"), or a specific item.
• A beneficiary designation. The donor names the charity as a beneficiary of a retirement account, life insurance policy or bank account, using the provider's form. It doesn't need a will.
• A gift through a living trust. Similar to a will, for donors who use a trust to pass on their property.

For donors, the tax picture is between them and their advisers. The IRS notes that the deductions allowed in working out a taxable estate may include "property that passes to surviving spouses and qualified charities." The IRS's estate tax page gives a filing threshold of $15,000,000 for deaths in 2026, so a federal estate tax return is needed only for very large estates. Many donors give simply because they care.

Make it easy to get right

When a donor's lawyer writes a will, they need to identify your charity exactly. Put a short "Leave a gift in your will" section on your website with:

• your full legal name, exactly as on your articles of incorporation and IRS letter;
• your EIN (employer identification number);
• your mailing address;
• a contact person for questions, with an email or phone number;
• suggested wording, for example: "I give [amount, percentage of my estate, or description of property] to [legal name], a nonprofit corporation organized in [state], with EIN [number], for its general charitable purposes."

Check that your name and status are current in the IRS's Tax Exempt Organization Search, because executors and lawyers often check there.

Unrestricted or for a purpose?

A gift "for general charitable purposes" is the most useful, because you can use it where it's needed most when it arrives, which may be decades from now.

If a donor wants to support a specific program, encourage wording with flexibility, such as "for [program], or if that is no longer practical, for the general purposes of [legal name]." A purpose that's too narrow may be impossible to honor years later. Our restricted funds guide explains what happens when a gift can't be used as the donor asked.

How to talk about legacy giving

You don't need a campaign. Most legacy gifts come from people who have given regularly for years. Simple, low-pressure steps:

• Mention it once or twice a year in your newsletter or annual report: "Many supporters have remembered us in their wills."
• Add a line to your website and your donation page.
• Include a box on response forms: "I'd like information about leaving a gift in my will" and "I've already included you in my will."
• Talk about it naturally with long-time donors and board members, without pressure and never with someone who seems unwell or confused.

Respect donors' privacy. Many people don't want to discuss their will, and some never tell the charity at all.

When a legacy gift arrives

Often the first you hear is a letter from an executor or a lawyer. Then:

1. Reply promptly, confirming your legal name, EIN and address, and who to deal with.
2. Ask for a copy of the relevant part of the will or the beneficiary form, and when to expect the gift.
3. Record it carefully, including any restriction, and tell the treasurer.
4. Thank the family or executor, warmly and in writing, if appropriate.
5. Report it to the board. Decide, under your policies, how unrestricted legacy gifts will be used: many boards put them toward reserves or long-term projects rather than everyday costs.

For gifts of property, stock or other non-cash assets, see our non-cash gifts guide. Our gift acceptance policy template helps your board decide in advance which gifts it will accept, such as real estate.

Other planned gifts, briefly

Some donors, usually with their advisers, set up more complex gifts. You don't need to offer these, but it helps to recognize them:

• Charitable remainder trusts pay the donor (or others) an income for a period, then the rest goes to charity. The IRS describes two types: an annuity trust, which pays a fixed dollar amount each year, and a unitrust, which pays a percentage of the trust's value, recalculated each year. Payouts must be at least 5% and no more than 50% a year, and what eventually passes to charity must be at least 10% of the initial value of the property placed in the trust.
• Gifts from retirement accounts during life. Donors aged 70½ or older can give directly from an IRA. Our guide to DAFs, IRA gifts and matching gifts explains qualified charitable distributions.
• Gifts of life insurance or of a home, with the right to live in it for life. These need specialist advice for both donor and charity.

If a donor proposes one of these, thank them, and suggest they work with their own adviser. Ask a lawyer or accountant to review anything that would bind your charity, such as serving as trustee.

Thank and look after legacy donors

• Thank donors who tell you they've included you, personally and in writing, even though the gift is in the future.
• Ask how they'd like to be recognized, if at all. Some charities list legacy donors (with permission) in the annual report; others keep them private.
• Keep them close. Send updates and invitations as you would to any loyal donor. Our donor stewardship guide has a yearly calendar.
• Keep records of who has told you about a planned gift, with their permission, in a secure place.

Your legacy giving checklist

• Our website shows our exact legal name, EIN, address and a contact for legacy gifts
• We have suggested will wording that gives the gift flexibility
• Our name and status are current in the IRS Tax Exempt Organization Search
• We mention legacy giving gently, once or twice a year
• We never give donors legal or tax advice, and suggest they use their own adviser
• We know what to do when an executor writes to us
• The board has decided how unrestricted legacy gifts will be used
• We thank and keep in touch with donors who tell us they've included us