Giving - Planned Giving
Introduction

This FAQ document covers the basic aspects of planned giving. If you need additional information contact Mike Stephenson, Canon for Development, (312) 751-6725.

There are links to additional planned giving information here.

What is planned generosity?

Planned generosity is a prayerfully considered, systematic process of giving oneself in joyful service to advance the Gospel of Christ. Planned generosity includes gifts of time and money, both now and in the future, that express love for God and gratitude for all that God gives. A common component of planned generosity is planned giving.

A planned gift is one that is timed to minimize tax liability--whether income, capital gain, or estate taxes. For example, a donor often will give appreciated stock rather than cash proceeds to avoid capital gains tax on the sale of the stock.

An estate gift, e.g., a bequest in a will, is both a planned gift and a deferred gift. A charitable gift is considered to be “deferred” whenever the beneficiary, in this case the church, doesn’t receive the gift until some future date. Deferred giving is easily the most significant element of planned giving for most churches.

When is a good time to talk about planned giving?

It makes sense to talk about planned giving when exploring end-of-life issues. In general, the most basic level of planned giving pertains to ways in which donors may remember the church in their will. This is intimately linked to the question of how donors wish to be remembered.

It is vital that decisions about bequests be made while a person is living; otherwise, the state of Illinois will have legal jurisdiction over the disbursement of the estate of the deceased.

Why is planned giving important?

Giving to the church isn’t ultimately about money: it’s about ministry. In order to expand its ministries, the church must develop more resources, financial and otherwise. Giving is also about relationship with God—how people make space in their hearts and lives for spiritual growth. For many people, their most generous financial gift is the one they make at the conclusion of their life.

Planning an estate gift can reduce tax liability, now and in the future, to donors and donors’ heirs. For almost everyone, planned giving just makes sound financial sense.

Seventy percent of Americans do not have a will. However, thinking about a planned gift may motivate a person to write a will. A will planning kit, graciously provided by the Episcopal Church Foundation, is available from the diocesan center.

In this country, a huge transfer of wealth is taking place, and most of the recent changes to the tax laws benefit the very wealthy and their heirs. It is uncertain whether the next generation will be as generous as this one; regardless, this is a time when leaders in the church should be very intentional about asking parishioners to include local churches and the diocese in their estates.

What would be some examples of planned gifts?

Appreciated securities—Gifts of stock are deductible at market value rather than cost; this can make the donation of this type of financial instrument attractive from the perspective of tax accounting.

Real property—It is possible to give a full or partial interest in real estate each year to a charity and continue to use the property. There is an immediate deduction available based on the donor's life expectancy.

Personal property—Personal property is sometimes a viable gift possibility, but there are some limitations. In general, the donated property must be used to support the work of the church.

Life insurance and retirement accounts—Another easy gift option is giving a fully-paid life insurance policy to the church. Similarly, someone may give all or part of a retirement account.

What are life income gifts?

Not all planned giving involves bequests. There is a whole category of planned giving called “life income gifts.” The instruments associated with this mode of giving include charitable gift annuities, remainder trusts, and lead trusts. The charitable gift annuity is the most common of these. In this case, a donor purchases an annuity that pays that person a fixed amount for a specified length of time. At the end of that period, the church receives whatever is left in the account established by the gift.

What advice would you offer to individuals regarding planned giving?

Consider what the church means to you—its importance in your life, to the community, and to the world. Your gifts to the church are a means of expressing your love for God and your gratitude for all that God has given you.

Make an estate plan, i.e., calculate what you are leaving behind and create a plan for distributing it. For most people, an accountant or attorney should be involved.

As you write your will, if you haven’t done so already, please consider a bequest to your local church. For example, you might “endow your pledge” by leaving resources sufficient to yield the equivalent of your annual pledge as investment income in perpetuity.  Please also consider giving a portion of your donation to the diocese. The diocesan center plays a unique role in supporting local congregations, and its endowment presents a special opportunity for investing in crucial ministries not funded by other church organizations.

What advice would you offer to congregational leaders regarding planned giving?

People almost always give more generously when they know how the funds will be used. Most churches need a long-range financial plan. It should include regular operating expenses, funds to support specific ministries, and the amounts needed for building maintenance and major repairs and renovations.

Encourage people to talk candidly about the church’s finances. Some may complain that “the church is always talking about money.” Such a remark would be a wonderful opportunity to remind individuals that it isn’t finally money the church is talking about: it’s ministry. But the church needs money to make that happen.

Prepared by the Rev. Canon Michael P. Stephenson, Canon for Development, Episcopal Diocese of Chicago.

For additional information about planned giving, please investigate the following pages:

Planned Giving Made Easy is a presentation on the theological foundations, goals, and practical aspects of planned giving.

Is Your Congregation Ready for Planned Giving? suggests some key questions to consider in evaluating whether it's time to initiate a structure oriented toward planned donations in your church.

Establishing a Planned Giving Program is a detailed treatment of issues relevant to sophisticated groups seeking planned donations.

Charitable Giving Basics provides a user-friendly overview of some financial vehicles important for potential donors to understand.

This planned giving structural sample is taken from the California State University, Dominguez Hills Advancement Gift and Stewardship Policy Manual.

Fundraising 101 offers some valuable insights on the topic of planned giving.

Intentional planned giving efforts are often closely related to beginning or augmenting an endowment; please review the Introduction to Endowment Funds.

For assistance contact the chair of the Planned Giving Committee, George Miller.

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