What is legacy giving?
Legacy giving refers to donations that supporters plan to give to KKIDS,Inc. after their passing. Legacy giving is also commonly referred to as planned giving as donors often plan these gifts years before they are distributed to the designated parties.
For many donors, legacy giving will consist of monetary donations, but some donors will give real estate or choose to set up a charitable annuity or trust rather than make a direct donation. While the specifics of each gift and how it is distributed will vary, these gifts can have the potential to supply KKIDS,Inc. with meaningful funds for years to come and honor the legacy of the donor who made the contribution.
Why is legacy giving important?
Legacy giving can benefit both KKIDS,Inc. and donors. Donors who choose to participate in legacy giving can experience positives, such as:
- The ability to cement their legacy. Legacy giving ensures donors will be remembered for their generosity and commitment to your nonprofit’s purpose long after their passing. This can be especially important to mid-level donors who lack the funds to make a major gift during their lives but can make the impact they want through a legacy gift.
- Tax breaks. Many wealthy donors join a legacy giving program both out of their commitment to their favorite nonprofit and the numerous tax benefits that participating can bring their families.
- Control over their donation’s use. Often, donors hesitate to give to nonprofits if they are unsure what impact their contributions will make. With legacy giving, donors can add stipulations in their wills for how their gift will be spent. This can help donors feel rest assured that their legacy will be preserved the way they would have wanted.
For nonprofits, why is legacy giving an important revenue source? It is because it:
- Adds an additional revenue source for organizations to secure their fiscal stability
- Builds an endowment to provide an ongoing source of income each year in perpetuity
- Augments the other “asks” and deepens the connection with donors
- Broadens your donor base to allow donors to make impactful gifts by providing a diverse way to give assets
There are so many reasons to add legacy giving as an option for your donors. Why limit donations to current gifts of cash and securities?
Many donors don’t have the capacity to give major gifts on an annual basis, but they can make a major gift by using other types of assets, like art and life insurance policies, and more thoughtful planning through estate gifts and endowments. By promoting legacy gifts you are broadening your base of donors that can give to you in ways other than cash or securities.
What are the types of legacy giving?
If you want to provide your donors with an opportunity to make an impact, while also creating a sustainable revenue source for your organization, starting a legacy giving program is the way to go—and it doesn’t have to be overwhelming.
Let’s break down the different types of legacy giving so your nonprofit can get comfortable with the more complex side of this giving method:
- Bequests. Bequests are the most popular and simplest type of legacy giving. In their wills, donors will name what they want to give to your nonprofit, whether it’s a specific amount of funds, stocks, a piece of art, or even a percentage of the value of their estate. Keep in mind that while your nonprofit can encourage donors to create a will, you cannot participate in actually creating it.
- Life insurance. When taking out a life insurance policy, donors can name a nonprofit as one of its beneficiaries. Donors who currently have life insurance policies they don’t need anymore can also participate in legacy giving by donating their policy’s accumulated value to your nonprofit.
- IRAs. Some of your donors may be interested in joining a tax-deferred retirement plan. They can use this as a method to participate in your legacy giving program by either naming KKIDS,Inc. a beneficiary or as a recipient of the percentage of the proceeds.
- Charitable gift annuities. Large nonprofits may set up charitable gift annuities for their donors. With this method, donors make a large gift during their lifetime, and in exchange, the nonprofit provides them a fixed income for the rest of their life. When the donor passes, the nonprofit will receive the remaining funds.
- Retained life estates. Instead of making a monetary donation, donors can give nonprofits a piece of property they own, while still retaining the right to use it during their lifetime. After the donor passes, the nonprofit can choose to keep or sell the property.
There are actually even more ways to make a legacy gift than just these options.
If you are interested in leaving a legacy gift for the ongoing ministry and outreach of KKIDS,Inc. please click on this link and insert LEGACY GIFT in the heading: