Definition of Planned GivingPlanned giving can be defined as the act of allocating funds and/or assets to be donations at a later date — most often at death. Commonly granted through wills or trusts, planned gifts can be strictly cash, property, life insurance policies, and much more. Read additional details about planned giving’s definition here!
Definition of EthicsThis definition could quickly devolve into a close reading of an immense term, so we’re going to defer to our good friend, Merriam-Webster, this time.
— rules of behavior based on ideas about what is morally good and bad — an area of study that deals with ideas about what is good and bad behavior; a branch of philosophy dealing with what is morally right or wrong — a belief that something is very importantFor our purposes, we’ll be zeroing in on that first point. Hypothetically, if you were to encounter an ethical dilemma when acquiring a planned gift, you are likely to instinctively be able to recognize that something is off. Don’t dismiss your gut feeling. Respectfully pursue what you’re questioning and handle the situation accordingly, depending on what you uncover. There’s legal, illegal, and questionable. Questionable counts for something. Don’t ignore it. Much of what makes charity so enticing is that it feels good. It is nice to know that your actions are helping the world in some way. Whether you collect recyclables during a can drive or buy a table at a fundraising dinner, your work is making a difference. Good deeds are good all around. Planned gifts don’t deserve to be muddled by moral ambiguity. Ready to start the questions?
#1: Are there any ethical issues surrounding the planned giving tax breaks?Short answer: yes. Short answer: no. This is all entirely situational. The tax breaks for planned gifts are benefits, but they should not be the sole reason why someone is making the donation in the first place. The deciding factors in making a planned gift should be ordered as follows:
- The desire to make a charitable contribution
- Any other number of factors, including the benefit of some tax advantages
#2: Do donors ever offer more than they are realistically capable of donating?Yes, some donors might. This ethical quandary is more of a best-intentions-gone-awry scenario. Imagine a situation wherein a donor comes to you thrilled to make arrangements for a planned gift. We’ll call the donor Bob. Bob is a longtime advocate of your organization and one of your most loyal donors, and he is ready to make a legacy gift. It is great news all around; then you realize that the donation he wants to make is not realistic given the current status of his finances and assets. You’ll have to tactfully turn Bob’s plans in a more fiscally sound direction. Do the best you can by the donor. What would you want if the situation was reversed? Think about what you would do if the donor was a friend or a member of your family. When you are in the process of acquiring a planned gift, ask yourself questions, such as:
- Is the donor logically considering future financial needs?
- Does the donor have the means to give us this gift?
- Is this the ideal gift size for this particular donor?