Major and Planned Gifts
Endowments...bequests...charitable gift annuities. These terms often come to mind when people start thinking about major gifts. They all are vehicles for planned giving.

An endowment is a fund that is invested to produce annual income. Most endowment funds are designed to be permanent, so the principal is not compromised. Either all or a percentage of the annual earnings are used to further the mission of United Way.

United Ways use their endowments to:
  • Increase annual funding of partner agency programs.
  • Provide a flexible source of funding to respond to emergencies and emerging needs.
  • Serve as a dedicated source of revenue to fund special initiatives.
  • Support operational costs.
There are two basic forms of endowment:
True endowment. A donor restricts this gift via a written agreement, sometimes for specific Project. In the written agreement, a donor can describe which portion of the gift (i.e., principal, income, or a combination thereof) may be used and for what purposes.

Quasi-endowment. An organization’s board of directors may classify a gift as such via a board resolution and may change it by subsequent board resolutions. Because a board designated endowment is not donor-restricted, the governing board may have flexibility to decide at any time to expend the principal of such funds (depending on individual state laws).

Planned giving
Planned gifts can be outright contributions of stock, real estate, or even cash. But the most common form of planned gift is a charitable bequest, a gift that can be established fairly simply. Many individuals may find planned gifts to be their vehicle of choice for advancing their philanthropic interests.

To be effective, planned gifts require the thoughtful planning of donors, their advisers, and United Way. Depending on the needs of the donor, some plans can produce an income for donors and their named beneficiaries over a lifetime. The remainder of the plan would then benefit United Way.

Planned gifts may support any aspect of United Way, including the annual campaign. However, oftentimes planned gifts are invested towards the United Way’s endowment fund.

Outright gifts
These are assets that a donor can invest right away in United Way. They include cash, real estate, securities, and other property.

Bequests are made through a will, trust, life insurance, or individual retirement plan. In establishing a bequest, a donor can allocate a specific dollar amount, percentage of the estate, or even the residue that remains after a donor’s family and other designees have received their share of the estate. Furthermore, a donor can make a bequest that is contingent upon the recipient organization fulfilling specific obligations.

For more information about major and planned giving, contact us.

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