A Letter of Intent (LOI) for Planned Giving is a useful tool for donors who want to formalize their commitment to a charitable organization. While not legally binding, it communicates your philanthropic intentions and helps the charity prepare to receive your future gift. Here are seven key things to know about a Letter of Intent for Planned Giving.
1. What Is a Letter of Intent (LOI)?
A Letter of Intent is a document that informs a charity of your decision to include them in your estate plans. It outlines the details of your planned gift, including the type of gift, its purpose, and any specific wishes you have. Unlike a will, it’s not a legal document, but it plays an important role in clarifying your intentions.
2. It’s Not Legally Binding
An LOI is a statement of your intention to give, but it does not create a legal obligation. This means you can modify or revoke the letter at any time. Its primary purpose is to inform the charity of your commitment so they can plan accordingly and honor your wishes.
3. Why Use a Letter of Intent?
An LOI provides clarity and documentation for both you and the charity. It ensures that your charitable intentions are understood and helps the organization prepare for your future gift. It also allows the charity to acknowledge your generosity and involve you in donor recognition opportunities if desired.
4. Types of Planned Gifts Covered
A Letter of Intent can apply to various types of planned gifts, including:
- Bequests in your will or trust
- Beneficiary designations on life insurance policies, retirement accounts, or financial assets
- Charitable gift annuities
- Charitable remainder trusts
- Real estate or other tangible assets
5. Include Specific Wishes or Restrictions
If you want your gift to support a specific program or purpose within the organization, the LOI is the place to outline those wishes. You can also include instructions on how you’d like your gift to be recognized or if you prefer to remain anonymous.
6. Recognition Preferences
A Letter of Intent typically allows you to state your preference for recognition. You can choose to be publicly acknowledged in donor lists and materials or opt for anonymity. This ensures the charity respects your wishes regarding how your gift is celebrated.
7. It Helps the Charity Plan for the Future
By sharing your planned giving intentions through an LOI, you help the charity forecast future funding and plan for long-term sustainability. This advance knowledge supports the organization’s strategic planning and ensures your legacy aligns with their mission.
Is a Letter of Intent Right for You?
If you’ve decided to leave a planned gift to a charity, a Letter of Intent is a simple and effective way to document your commitment. It ensures your wishes are clear, helps the charity prepare, and allows you to be part of their future success.
By understanding these seven key aspects of a Letter of Intent for Planned Giving, you can take an important step toward securing your philanthropic legacy.
To learn more about planned giving, including a Letter of Intent for Planned Giving template, visit our Planned Giving Information Hub.
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