Primer on Charitable Bequests
What Is a Bequest?
A bequest is a gift of a person’s assets—either cash or noncash property—left to individuals or organizations through a will or living trust after applicable taxes and expenses. Bequests are some of the most common planned gifts received by charitable organizations.
Bequests are usually revocable, meaning they can be changed or canceled at any time during a person’s lifetime. They can be structured in many ways:
- Residuary Bequest: This is the remainder of an estate after all other specific gifts and obligations have been fulfilled. Residuary bequests often form the largest share of a charitable bequest and are what’s left once family, friends and other commitments have been satisfied.
- Specific Dollar Amount: This cash gift can be unrestricted or directed toward a particular area of interest.
- Specific Property: This refers to the donation of a particular asset, such as real estate, stocks or other items of value. These assets can be transferred through a will or living trust but may fail if the asset is now owned at death or properly transferred to a trust.
- Percentage Bequest: A donor may choose to leave a fixed percentage of their estate to a charitable organization. This approach means the gift will scale with the size of the estate and is often stated as a percentage or share of the residual estate.
While many charitable organizations focus on specific dollar amounts, this approach can sometimes be limiting. Statistically, most charitable bequests are structured as specific gifts (like cash or specific assets); however, residuary bequests account for 70% of the total value of all bequests.
Why Bequests Are Appealing
Bequests can offer several advantages:
- Tax Benefits: There is no limit to the amount that can be deducted from federal estate and gift taxes for charitable bequests. In most states, charitable gifts are also exempt from state estate taxes.
- Flexibility and Control: Donors retain full control over their assets during their lifetime, and changes can be made to their will or trust at any time, unless the donor is incapacitated.
- Resilience: Charitable bequest income tends to remain stable, even during economic downturns, making it a reliable source of funding.
The Nonprofit’s Role
Adults can create or update their wills at any age, and many do so multiple times throughout their lives. However, research shows that more than half of all charitable bequests come from wills signed after age 85. This highlights the importance of long-term relationships with donors and ongoing conversations about planned giving. Having the age of your donors in your file is an important tool for a successful bequest program. Sharpe Data can help you identify the ages of your donors and append them to your file. We can also provide a Deceased Update for your donor file, which is essential information for planned giving fundraising.
Sharpe Group has several publications to help you communicate with your donors about bequests. These printed on-demand booklets and brochures can be personalized with your organization’s branding.
Helpful Tools:
- Sharpe Data
Append age, wealth, gender, marital status and other important data to your files. Flag potential deceased donors for follow up.
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- On-Demand Printed Brochures:
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- On-Demand Printed Booklets:
- “24 Things People ‘Know’ About Wills That Aren’t Really So”
- “A Guide to Charitable Giving”
- “Better Estate Planning”
- “Giving Through Your Will”
- “How to Protect Your Rights With a Will”
- “How to Make a Will That Works”
- “Planning for the Future”
- “Planning Your Bequests”
- “Tips and Traps When Naming Your Beneficiaries”
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- On-Demand Printed Pocket Guides:
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Ask about fully custom printed newsletters, postcards and other publications. Contact us here.
- Sharpe Planned Giving Websites
Provide a planned giving microsite to help your donors learn how to give through their will.
Click here to request a demo.