Planned giving is a meaningful way to leave a lasting legacy, but choosing the right charities to support can feel overwhelming. With thousands of organizations doing incredible work, how do you decide which ones align with your values and goals? This guide will walk you through how to select the charities that are the perfect fit for your planned giving strategy.
Start With Your Values
The first step is to reflect on your personal values and priorities. Ask yourself:
- What causes are most important to me?
- Which organizations have had a positive impact on my life or community?
- What kind of legacy do I want to leave?
Identifying your values will help you focus your search on causes that resonate with you, such as education, environmental conservation, healthcare, or social justice.
Research Potential Charities
Once you’ve identified your causes, create a list of potential charities. Look into their mission statements, goals, and programs to ensure they align with your vision. Pay attention to how their programs operate, their geographical focus, and their approach to addressing the issues you care about. Reaching out to charities to learn more about their work and priorities can also provide valuable insights.
Evaluate Financial Transparency and Accountability
Reputation and financial health are critical when selecting charities. Ensure the organization is using donations effectively and responsibly. Tools like GuideStar, Charity Navigator, and the Better Business Bureau’s Wise Giving Alliance can help you assess organizations. Key indicators include:
- A high percentage of funds spent on programs versus administrative costs
- Detailed annual reports and audited financial statements
- Clear, transparent communication about how donations are used
Assess Long-Term Impact
Planned giving is often a long-term commitment, so it’s essential to understand how the organization plans to use your gift over time. Evaluate whether they focus on addressing the root causes of an issue or provide immediate relief. Consider their track record and ability to adapt to changing circumstances, which can affect the longevity of their impact.
Decide on Restricted vs. Unrestricted Gifts
When making a planned gift, decide whether to restrict the funds for specific purposes or allow the charity flexibility in its use. Restricted gifts, such as funding a particular program, can provide targeted support. Unrestricted gifts give charities the freedom to allocate funds based on their most pressing needs. Both options have advantages depending on your goals.
Balance Local and Global Impact
Think about supporting a mix of local organizations and those addressing broader global challenges. Local charities often provide direct and visible impact within your community. On the other hand, global organizations can tackle systemic issues and support broader initiatives. Balancing the two can ensure your legacy contributes to both immediate and far-reaching causes.
Meet With Charity Representatives
Speaking directly with representatives from the organizations you’re considering can help you better understand their mission and vision. Questions to ask include:
- What are the charity’s long-term goals?
- How does it measure the success of its programs?
- How are planned gifts typically used?
Engaging with representatives also allows you to discuss personalized giving options, such as creating an endowment or funding specific projects.
Explore the Option of Endowments
If you want your gift to provide perpetual support, consider establishing an endowment. This type of gift allows charities to use the interest earned from your donation while preserving the principal amount. Speak with the charity to understand their policies on endowments and how they manage these funds.
Consult Professional Advisors
Incorporating planned giving into your estate plan requires careful coordination with your financial advisor or estate planning attorney. These professionals can help you identify the best methods for structuring your gifts, such as through wills, trusts, or beneficiary designations. They can also ensure you maximize any tax benefits associated with your planned giving.
Periodically Review Your Plan
Life circumstances and priorities can change over time, so it’s a good idea to review your planned giving strategy periodically. Make updates to your estate plan as needed to ensure your legacy aligns with your current goals.
Choosing the right charities for your planned giving strategy is a deeply personal process that reflects your values and the impact you want to make. By carefully researching and engaging with organizations, you can create a plan that ensures your legacy will support the causes closest to your heart.
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