August might conjure images of lazy, hazy days of summer, but nonprofits know the busiest time of year for giving is right around the corner. While annual donations are often top of mind, August is actually an ideal time for longer-term thinking and focusing on planned giving.
This is National Make-A-Will Month, with estate planning a key part of legacy giving. Bequests, gifts of cash or other assets made through a donor’s will or trust, are the most common type of planned giving, and often the simplest. They can be tax-efficient, meaningful and impactful. That doesn’t mean the conversations around legacy giving are always easy, but for donors, families and fundraisers, they are well worth having. And there are plenty of discussions to be had. Only about one-third of people have a will, and among the other two-thirds, most say it’s just procrastination that’s kept them from making one.
A key finding of Giving USA 2024 is the significant increase in donations by bequest last year. Americans donated a total of more than $557 billion to charity in 2023, and almost $43 billion of that, or some 8%, was giving by bequest. That’s an increase of 4.8% from the year before.
There is tremendous potential for that to increase in the coming years. It’s been widely reported that the largest wealth transfer in history is under way, with Baby Boomers passing an estimated $84 trillion in assets to the next generations over the next 20 years. While most of that will be left to heirs, almost $12 trillion of the Great Wealth Transfer is expected to go to charities.
When an organization is named in a will, you’ll sometimes hear “we had no idea” or “we weren’t expecting that.” But it turns out there are some reliable indicators to point to who is most likely to have included charities in their estate plans, or to be especially receptive to the idea of doing so. Simply put, there is a strong connection between annual and bequest giving.
One of the most comprehensive and accessible nonprofit guides to Planned Giving that we’ve seen comes from DonorSearch, which we’re happy to share here. And our team has successfully partnered with clients across a range of nonprofit sectors to create or expand their planned giving programs, developing the strategies and messaging to attract these all-important legacy gifts. It’s always rewarding to hear legacy donors express the reasons for including an organization in estate planning.
It is all about making a difference, and planned giving can make that positive impact for generations to come.
Nonprofits are right to remind donors that general information about planned giving is not meant to be specific legal, tax or investment advice, and that they should consult their own advisors.
But whatever the specifics of an individual situation, the broader message is that generosity in the form of a lasting legacy that reflects a donor’s values, carries out wishes and sets an example for others. That is a message we can all embrace.