Planned giving is the process of arranging a charitable gift as part of your overall estate and financial plan — often in a way that benefits both the charity and your family. Unlike a simple bequest, planned giving strategies can reduce estate taxes, generate income during your lifetime, avoid capital gains on appreciated assets, and leave a meaningful legacy to the causes and organizations that matter to you.
Why Plan a Charitable Gift?
Many people who give regularly to their church, community foundation, university, or favorite nonprofit never consider what they might accomplish with a planned gift. A well-structured charitable arrangement can do far more than a check: it can convert a low-basis asset into an income stream, reduce the taxable estate you leave behind, fulfill a philanthropic goal that spans generations, and provide recognition or naming opportunities that reflect your values.
Planned giving is not only for the very wealthy. Modest estates can accomplish meaningful charitable goals through a simple bequest, a beneficiary designation, or a gift of appreciated stock. We work with clients at every level to identify the approach that fits their goals, family situation, and tax circumstances.
Planned Giving Strategies We Use
Charitable Bequests
The simplest form of planned giving — a bequest in your will or revocable trust directing that a specific amount, a percentage of your estate, or particular assets pass to a charity at your death. Bequests are fully revocable during your lifetime, require no current cash outlay, and reduce your taxable estate. Pennsylvania inheritance tax does not apply to transfers to qualifying charitable organizations.
Beneficiary Designations
Naming a charity as the beneficiary — or contingent beneficiary — of a retirement account (IRA, 401(k), 403(b)) or life insurance policy is one of the most tax-efficient planned giving strategies available. Retirement accounts left to individual heirs are subject to income tax as distributions are taken; assets left to a charity pass free of both income tax and estate tax. This makes retirement accounts ideal assets for charitable giving, while other assets (real estate, investments with a stepped-up basis) are left to family members.
Charitable Remainder Trust (CRT)
A charitable remainder trust is an irrevocable trust that pays income to you (or other named individuals) for life or a term of years, with the remaining assets passing to charity at the end of the trust term. Under IRC § 664, a CRT can be structured as an annuity trust (fixed dollar amount each year) or a unitrust (a fixed percentage of trust assets, recalculated annually). Benefits include an immediate charitable income tax deduction for the present value of the remainder interest, avoidance of capital gains tax on appreciated assets transferred to the trust, and a diversified income stream.
Charitable Lead Trust (CLT)
The inverse of a CRT — a charitable lead trust pays income to a charity for a term of years, with the remaining assets passing to your heirs at the end of the term. A CLT can significantly reduce gift or estate tax on assets transferred to the next generation, particularly in low-interest-rate environments. CLTs are more complex and are typically appropriate for larger estates seeking to transfer wealth to heirs at a reduced transfer tax cost.
Donor-Advised Fund (DAF)
A donor-advised fund is a charitable giving account maintained by a sponsoring organization (a community foundation, financial institution, or national charity). You make an irrevocable contribution to the fund, receive an immediate tax deduction, and then recommend grants to qualifying charities over time. DAFs offer simplicity, flexibility, and the ability to contribute appreciated assets without triggering capital gains. We help clients coordinate DAF contributions with their overall estate plan, including funding the DAF at death through a bequest or beneficiary designation.
Qualified Charitable Distributions (QCD)
Individuals age 70½ or older can transfer up to $108,000 per year (2025 limit, indexed annually for inflation) directly from an IRA to a qualifying charity under IRC § 408(d)(8). A qualified charitable distribution satisfies all or part of the required minimum distribution without being included in the taxpayer's gross income — making it more tax-efficient than taking the distribution and then making a separate charitable contribution. This is one of the most underused and straightforward charitable planning tools for retirees.
Gift of Appreciated Assets
Donating appreciated securities, real estate, or other property directly to a charity — rather than selling the asset and donating the proceeds — allows you to avoid capital gains tax on the appreciation while still deducting the full fair market value of the gift. This strategy is particularly valuable for clients who hold highly appreciated, low-basis stock or real estate.
Legacy Endowments and Named Funds
Many community foundations, hospitals, universities, and religious organizations allow donors to establish named endowments or funds that support a specific purpose in perpetuity. We work with clients to structure the gift — through a bequest, CRT, or direct contribution — and coordinate with the recipient organization on gift acceptance policies, naming agreements, and purpose restrictions.
Coordinating Charitable Gifts With Your Estate Plan
A planned gift should never be made in isolation from your overall estate plan. The choice of which assets to give, how to structure the gift, and how it interacts with your will, trust, and beneficiary designations can have significant tax and family consequences. We review your full financial and family picture before recommending any charitable strategy, and we work with your financial advisor and CPA when needed to ensure every piece fits together.
We also help clients who want to involve family members in their philanthropy — establishing a family donor-advised fund, incorporating charitable discussions into the estate planning process, or creating a trust structure that instills philanthropic values across generations.
What to Expect When You Work With Us
Free Consultation
We discuss your charitable goals alongside your overall estate plan. You will learn which giving strategies make sense for your tax situation and family circumstances.
Plan Design
We design a giving strategy that integrates with your estate plan — whether that involves a charitable remainder trust, donor-advised fund, or direct bequest. We coordinate with your financial advisor and CPA.
Implementation
We draft the trust documents or will provisions, fund the charitable vehicle, and ensure the tax benefits are properly documented.
Call (724) 733-3500 or schedule a free consultation to discuss your charitable giving goals.
Frequently Asked Questions
Do I need to be wealthy to do planned giving?
No. A simple bequest in your will or a beneficiary designation on a retirement account costs nothing to implement, can be changed at any time, and can leave a meaningful gift to an organization you care about. Planned giving strategies like CRTs are typically most effective for larger gifts, but the basic tools are available to anyone with an estate plan.
What is the best asset to give to charity?
From a tax standpoint, retirement accounts (IRAs, 401(k)s) and highly appreciated assets are generally the most efficient assets to leave to charity. Retirement accounts are subject to income tax when distributed to individual heirs; charities receive them tax-free. Appreciated assets avoid capital gains when donated. Cash and assets with a stepped-up basis at death are usually better candidates for family inheritance.
Can I change my mind after setting up a planned gift?
It depends on the type of gift. Bequests in your will or trust and beneficiary designations are fully revocable — you can change them at any time. A donor-advised fund contribution is irrevocable once made, but you retain the ability to recommend how grants are made from the fund. Charitable remainder trusts and charitable lead trusts are irrevocable once established, though the terms can sometimes be modified with court approval.
How does Pennsylvania inheritance tax apply to charitable gifts?
Transfers to qualifying charitable organizations are fully exempt from Pennsylvania inheritance tax under 72 P.S. § 9111. This makes charitable bequests doubly advantageous in Pennsylvania — they reduce both the federal taxable estate and the Pennsylvania inheritance tax base.
Should my charity be named in my will or as a beneficiary designation?
For retirement accounts, a direct beneficiary designation is almost always more efficient — it avoids probate and delivers the asset to the charity without income tax. For other assets, a will or trust bequest works well. We review both approaches during the estate planning process to identify the most tax-efficient structure for your specific assets and goals.