By Matt Vuorela / Chief Executive Officer of Steier Group
In today’s philanthropic landscape, donors and organizations alike are thinking more intentionally about the future. They want to do more than write a check – they want to create a lasting impact. That’s where legacy giving and planned giving come in.
These two terms are often used interchangeably, yet they carry distinct meanings and implications for both donors and nonprofits. Understanding those definitions and differences can help you give more meaningfully, plan more strategically and ultimately make a greater difference.
In this article, we’ll clarify what legacy giving and planned giving mean, how they differ and how you can use them to build a lasting charitable legacy – with expert guidance from the Steier Group, a leader in faith-based and nonprofit fundraising.
Legacy Giving vs Planned Giving: Defining the Terms
What Is Legacy Giving?
Legacy giving is when donors arrange for gifts to take effect after their death, often through a will, trust or estate plan. These gifts usually are deeply personal and meaningful for the donor, whose generosity is driven by their values, the organization’s mission, the desire to make an enduring impact and often gratitude.
For example, a lifelong parishioner might leave a portion of her estate to her church to ensure that future generations can worship, learn and serve as she once did. Legacy gifts are more than a transfer of wealth. They’re about impact, remembrance and faith in the mission of the organizations we love.
What Is Planned Giving?
Planned giving is the broader umbrella term encompassing any charitable gift that’s arranged in advance, whether it takes effect now, later or in stages. These gifts are often structured to provide tax benefits or ongoing income, and they can include bequests, charitable trusts, annuities, life insurance policies and retirement assets.
Where legacy giving often looks to the future, planned giving blends generosity with smart financial strategy, integrating charitable goals into broader estate and tax and legal considerations.
The Key Difference Explained
In short: All legacy gifts are planned gifts, but not all planned gifts are legacy gifts.
| Planned Giving | Legacy Giving | |
| Timing | Can take effect during life or after death | Takes effect only after death |
| Common Motivations | Financial planning, stewardship, generosity | Remembrance, lasting impact, generosity |
| Structure | Uses a variety of vehicles, such as trusts and annuities | Typically arranged through wills and estate plans |
| Donor Control | Donor can revise plans or adjust contributions as circumstances change | Donor can update plans during life, but the final gift is carried out exactly as written at death |
Nonprofits often use the terms together because they share a common goal: to help donors make meaningful, enduring contributions in ways that align with their values and financial realities.
Why It Matters: Benefits for Donors and Nonprofits
For Donors
Planned and legacy giving allow individuals to leave a mark that outlives them. These gifts can support causes close to the heart, whether that’s education, healthcare, a religious organization or a community organization. These gifts also offer practical benefits like tax savings and estate planning advantages.
Donors can structure their gifts to provide income during retirement, care for family members or ensure flexibility should their circumstances change. Most importantly, these gifts tell a story – one of generosity, faith and foresight.
For Organizations
For nonprofits, planned and legacy gifts create stability and sustainability. They help organizations plan confidently for the future, launch long-term initiatives and deepen relationships with their most loyal supporters.
A strong planned giving program is about trust. It builds a bridge between generations, ensuring that today’s mission continues tomorrow.
The Steier Group helps nonprofits, schools and parishes strengthen those bridges through organizational support and program development, crafting planned giving programs that reflect gratitude, stewardship and vision.
Common Types of Planned and Legacy Gifts
Planned and legacy giving offer a wide array of tools donors can use to shape their charitable impact. These types of gifts and giving methods allow individuals to select the approach that aligns with their goals, family needs and financial strategies.
Bequests and Wills
The most common legacy gift is a bequest, which is a simple provision in a will that designates a portion of an estate to a charity. For example, a donor might leave 10% of their estate to a local Catholic school campaign, ensuring scholarships for years to come.
Charitable Gift Annuities
In this arrangement, the donor transfers assets (like stocks or property) to a charity in exchange for lifetime income. Upon their passing, the remaining funds support the organization’s mission.
Charitable Remainder and Lead Trusts
A charitable remainder trust provides income to the donor or beneficiaries for life, with the remainder going to charity. A charitable lead trust does the reverse – it provides income to the charity for a set time, then returns the remaining assets to heirs.
Life Insurance Donations
A donor can name a charity as a beneficiary or transfer ownership of a policy outright. This simple yet powerful gift can significantly benefit a nonprofit at little cost to the donor during their lifetime.
Retirement Assets
Naming a charity as a beneficiary of an IRA or 401(k) can reduce taxes on the estate while providing meaningful support to a mission that matters.
Retained Life Estate
Donors can deed a home to a charity while continuing to live in it. Upon their passing, the charity assumes ownership, using or selling the property to further its mission.
How to Choose the Right Giving Path
Step-by-Step Guide for Donors
Here’s a clear roadmap for how to make a gift that reflects both your values and your long-term goals:
- Identify your values and causes. What missions speak to your heart?
- Clarify your financial and family goals. Consider what you want to provide for loved ones and what legacy you want to leave behind.
- Consult trusted professionals. Work with your financial advisor, attorney and a representative from your chosen nonprofit.
- Select your giving vehicle. Choose the method – bequest, trust, annuity or another – that best fits your goals.
- Communicate your intentions. Let the organization know your plans so they can honor your wishes.
- Review periodically. Life changes, and your giving plan can, too. Most planned gifts are flexible and revocable.
Key Questions to Ask Yourself
Do I want to give now, later or both? Consider whether you hope to see your impact during your lifetime or prefer your gift to take effect after your passing – or a combination of the two.
How involved do I want to be in managing my gift? Some options, like bequests, require little maintenance. Others, like trusts or annuities, offer more structure and engagement.
What kind of impact do I want my legacy to have? Think about the ministries, programs or missions you most want to support and the story you want your generosity to tell.
How will my gift support both my family and my favorite organizations? Clarifying your priorities helps you balance care for loved ones with your charitable goals.
Who should I consult for guidance? Speaking with a financial advisor, attorney and the organization you wish to support ensures your plan aligns with your values and long-term goals.
Organizational Support and Program Development
For nonprofits, a successful planned giving program begins with communication. Donors need clear, compassionate information, not pressure.
Organizations can start by:
- Developing accessible educational materials about planned and legacy gifts.
- Training staff and volunteers to discuss giving options with empathy.
- Creating a legacy society to recognize and honor those who include the organization in their plans.
- Sharing donor stories that celebrate generosity and inspire others.
- Maintaining transparency, trust and ongoing gratitude.
The Steier Group has helped hundreds of churches, schools and other nonprofits with these programs and endowment strategies, ensuring that their messaging, stewardship and systems reflect both professionalism and mission.
Tax and Legal Considerations
Planned and legacy gifts often come with potential tax advantages. Depending on the structure, donors may qualify for income, capital gains or estate tax benefits.
However, every situation is unique. That’s why it’s essential to work with professionals like financial advisors, estate attorneys and nonprofit development officers who can tailor the strategy to your personal goals. Always ensure compliance with state and federal laws, and document your intentions clearly.
Conclusion: Making Your Legacy Count
Whether you call it legacy giving or planned giving, the heart of the matter is the same: using your blessings to bless others.
These gifts reflect a donor’s values, faith and vision for the future. They sustain missions, fund dreams and create stories that last long after we’re gone.
The Steier Group partners with nonprofits and faith-based organizations across the country to help them inspire and steward such gifts, and to build cultures of generosity that span generations.
So, start the conversation. Talk with your advisors. Reach out to your favorite nonprofit. Your plan today can become someone else’s hope tomorrow.
Frequently Asked Questions
Is planned giving the same as legacy giving?
Not exactly. All legacy gifts are planned gifts, but planned giving also includes donations that take effect during a donor’s lifetime, such as charitable gift annuities or trusts.
What’s the difference between estate taxes and inheritance taxes?
Estate taxes are paid by the estate before assets are distributed. Inheritance taxes are paid by the recipients after they receive assets. Charitable organizations are exempt from both.
Do I need a large estate to make a legacy gift?
No. Anyone can include a charitable bequest in their will. Even a small percentage can make a significant difference!
Can I change or revoke my planned gift later?
In most cases, yes. Unless the gift is irrevocable (such as certain trusts), you can amend your plans as your circumstances evolve.
