What is a Legacy Gift?

What is a legacy gift?

A legacy gift (also known as a bequest or a planned gift) is a planned future gift that designates some part of your estate as a donation to a cause that is important to you. Legacy giving can take a number of forms and can be monetary, property, stocks, or material goods. These gifts can be small or large and regardless of size, will positively impact future generations.

Why make a legacy gift?

Individual generosity has the power to change the world. Individuals make planned gifts to organizations for a variety of reasons. Commonly, donors make these gifts because they believe in the organization’s mission and want to support the work far past their own lifetime. Some make gifts in remembrance of a loved one, and others make a planned gift because they can make a larger gift in their will than they could during their lifetime.

Are there different ways to make a legacy gift?

More than half of people who pass away do not have a will. Of people who do make a will, only about 7% include a bequest to an organization.

The first step to leaving a legacy gift is to make a will. It is recommended that you consult an attorney or estate planner to ensure your will is created correctly and without any undue influence from others.

There are many ways to make a legacy gift:

Outright Gift: Outright gifts can include cash, securities (stocks, bonds, and mutual funds), real estate, tangible personal property, and retirement plan assets. A Qualified Charitable Distribution is particularly valuable for people who have large balances in an IRA account and don’t want to pay taxes on the Required Minimum Distribution that begins at age 72. They can make a gift to an organization and that comes out of the IRA tax-free. The limit for gifting is $100,000 annually.

Bequest by Will: When designating a portion of your estate, you may be eligible for a substantial reduction in federal gift and estate taxes.

Beneficiary Designation: Making a charitable organization a full or partial beneficiary of your retirement accounts is an easy way to make a legacy gift without modifying your estate plan. These are advantageous types of assets to leave to charity because they can be taxed heavily when left to heirs. Leaving a retirement plan to an organization ensures that 100% o your gift will support your charitable interests.

Life Insurance: Naming an organization as a beneficiary of your policy entitles your estate to an offsetting charitable deduction. You can also name an organization as the owner and beneficiary of an existing or new life insurance policy, and you receive an immediate tax deduction that typically approximates the cash surrender value of the policy. Premium payments thereafter are deductible as a charitable contribution.

Charitable Gift Annuity: You can establish a charitable gift annuity for as little as $10,000 in cash or securities. By doing so, you receive an immediate tax deduction and leave a legacy that will support the causes important to you forever and your beneficiary will receive a guaranteed payment for life.

Charitable Remainder Trust: This is an irrevocable trust that generates a potential income stream for you, as the donor for up to 20 years, or other beneficiaries for life, with the remainder of the donated assets going to your favorite charitable organizations.  

Charitable Lead Trust: This is an irrevocable trust designed to provide financial support to one or more charities for a period of time, with the remaining assets eventually going to family members or other beneficiaries.

Donor-Advised Funds: A donor-advised fund, or DAF, is a giving vehicle that allows donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. One of the main benefits of a donor-advised fund is that it allows individuals with philanthropic intent to have their charitable assets professionally managed and distributed to desired causes at a fraction of the cost of a private foundation.

How can I make a legacy gift to Big Brothers Big Sisters Miami Valley?

Gifts can be made to Big Brothers Big Sisters’ operating fund to serve immediate needs, or they can be made to the Big Brothers Big Sisters of the Greater Miami Valley Foundation (endowment) to be entrusted for future generations.

The Big Brothers Big Sisters’ endowment was started in 1980 by visionary board members including Walter Bailey, Jerry Kirby, Jane Goldhamer, and Kennedy Legler, Jr. The endowment is governed by a five-member board of directors and a professional investment advisor. Big Brothers Big Sisters receives approximately 5% of the total asset value annually which supports the annual operating budget.

What could be the impact of your legacy gift?

When you make plans in your estate to leave a gift to Big Brothers Big Sisters, whether for our foundation or for annual use, you honor our history of serving youth since 1958 while ensuring the future of thousands of children who will become changemakers, activists, and leaders through the power of mentoring.

BBBS Miami Valley unites young people (Littles) with caring, positive adult role models (Bigs) in professionally supported one-to-one mentoring friendships. Together, they clear a path to success by breaking societal barriers, closing opportunity gaps, and overcoming adversities like poverty and identity-based discrimination in our communities. BBBS maximizes their social impact with proven figures such as an 18:1 ROI. For every $1 invested in BBBS Miami Valley $18 is returned into the community. The evidence-based program builds social and emotional support, confidence and resilience that help to ensure young people are college & career ready and have a healthy physical and mental wellbeing. The organization serves diverse communities in Greene, Miami, Montgomery, and Preble counties and all programs are free to the families the organization serves. The future of the organization involves expanding proven services and piloting new game-changing approaches. We believe mentoring is important now, and in the future. It’s important to us to empower the youth of today and tomorrow. Talk about a BIG Impact!

For more information, contact Anne Pfeiffer, CEO at apfeiffer@bbbsmiamivalley.org or (937) 220-6860.