Planned Giving vs. Regular Donations: What’s the Difference?

Charitable giving comes in many forms, from spontaneous donations to carefully planned gifts. While regular donations and planned giving both support important causes, they differ significantly in purpose, timing, and impact. Understanding these differences can help you choose the approach that aligns best with your financial goals and philanthropic vision.

What Is Regular Donation Giving?

Regular donations refer to immediate gifts made to a charity, often in response to a specific need, campaign, or personal impulse. These can include:

• One-time donations: Contributing a specific amount to support a cause or event.
• Recurring donations: Monthly or yearly contributions that provide consistent support to an organization.
• In-kind donations: Donating goods or services instead of money, such as food, clothing, or volunteer time.

Regular donations are straightforward, flexible, and ideal for addressing urgent needs or providing ongoing support to a charity’s operations.

What Is Planned Giving?

Planned giving, or legacy giving, involves including charitable contributions in your long-term financial or estate planning. These gifts are typically executed after your lifetime or structured to provide benefits to both the donor and the charity over time. Common examples include:

• Bequests: Naming a charity in your will to receive a specific amount, percentage, or asset.
• Charitable trusts: Setting up a trust to benefit a charity while providing income to your beneficiaries.
• Beneficiary designations: Naming a charity as the beneficiary of a retirement account, life insurance policy, or investment account.

Planned giving is ideal for creating a lasting impact, often supporting long-term programs, endowments, or capital projects.

Timing: Immediate vs. Future Impact

The most obvious difference between regular donations and planned giving is timing. Regular donations provide immediate funding for a charity’s needs, such as disaster relief, program expansion, or day-to-day operations.

Planned giving, on the other hand, is about the future. These gifts often go toward sustainability efforts, endowments, or long-term goals that extend beyond the donor’s lifetime.

Benefits for the Charity

• Regular Donations: Charities rely on these for their operating budgets and to respond to urgent needs. Consistent donations help sustain programs and pay for ongoing expenses.
• Planned Giving: These contributions provide financial security and allow charities to invest in long-term projects, strategic growth, and endowments that ensure stability for years to come.

Benefits for the Donor

• Regular Donations: Flexible and accessible for anyone, regular donations allow you to support causes as your budget permits. They may provide immediate tax deductions for eligible contributions.
• Planned Giving: Offers significant tax benefits, such as reducing estate taxes or avoiding capital gains taxes on appreciated assets. Additionally, planned giving enables donors to leave a legacy that reflects their values and priorities.

Flexibility: Which Is Easier to Change?

• Regular Donations: Highly flexible and easy to adjust. You can change the amount, frequency, or recipients at any time.
• Planned Giving: While generally more structured, many planned gifts, such as those made through a revocable trust or will, can be modified or revoked during your lifetime.

Combining the Two for Maximum Impact

You don’t have to choose between regular donations and planned giving—many philanthropists use both to balance immediate and long-term support. For example:

• Use regular donations to help charities meet short-term needs.
• Plan a bequest or charitable trust to support the organization’s future growth.

How to Decide Which Is Right for You

Consider the following when choosing how to give:

• Your financial situation: Regular donations are ideal for smaller, ongoing contributions, while planned giving may involve more complex financial planning.
• Your goals: If you want to see immediate impact, regular donations may be the way to go. For a lasting legacy, planned giving is a better fit.
• Your relationship with the charity: Planned giving often involves deeper engagement with an organization to understand their long-term needs and goals.

Why Understanding the Difference Matters

Both regular donations and planned giving play vital roles in supporting charities. By understanding the distinctions, you can craft a giving strategy that maximizes your impact and aligns with your personal and financial goals. Whether you choose to give now, later, or both, your contributions will help drive meaningful change.

Planned giving and regular donations are not mutually exclusive. Together, they create a balanced approach to philanthropy, addressing immediate needs while securing the future of the causes you care about most

Ready to Explore Planned Giving?

Learn more at the Buried in Work Planned Giving Hub.