Planned Giving for the Moderate Donor

My father was a retired Presbyterian minister. He lived a life of service and of deep satisfaction but not one that brought large financial reward. When, at age 72, he sat on the 50th reunion committee of his alma mater, a college to which he was devoted and to which he contributed regular small donations, he felt he could not make a large gift to his reunion fund — until he discovered charitable gift annuities.

A charitable gift annuity is a contract between a donor and a charity in which the charity pays a donor a fixed amount for life in return for the donor’s gift of cash, stock or real estate. Because a CGA brought with it a regular dependable income stream, my father was able to contribute what was for him a gigantic sum of $15,000, far more than the $250 he could have contributed out of income. The pride he felt in being able to make that gift was the most important part of the benefit.

Almost all charities have donors who look much like my father. They are not wealthy but they are generous and committed, and they demonstrate that commitment through regular, even if small, annual contributions. They also are prime prospects for a planned gift.

In 2000, the National Committee on Planned Giving conducted national research study about patterns of giving that found that more than 70 percent of those who put a charity in their wills and more than 60 percent of those who established charitable gift annuities or charitable trusts had incomes of less than $100,000, and more than one third of those in both categories earned less than $50,000. Immense wealth clearly is not an essential to be a planned-gift donor. And most of these donors’ estates come nowhere near the point at which the estate tax kicks in.