Planned Giving Programs: Building a Legacy Strategy for Higher Education Fundraising

Most colleges and universities focus their fundraising energy on immediate, outright gifts — annual fund appeals, major gift solicitations, campaign contributions. And that makes sense when you need cash now to fund operations, scholarships, or capital projects. But there's another revenue stream that many institutions leave largely untapped: planned giving.

Planned gifts represent the single largest transfer of wealth in higher education fundraising, yet they remain underdeveloped at many institutions. Bequest giving totaled $45.84 billion in 2024, representing 8% of total charitable giving according to Giving USA 2025, and when you add charitable trusts, gift annuities, and other legacy vehicles, the numbers become staggering. The schools that build strong institutional advancement programs don't just secure their financial future — they create enduring relationships with donors who see themselves as permanent members of the institutional family.

What Planned Giving Is and Why It Matters

Planned giving encompasses any major gift that's arranged during a donor's lifetime but received later — often at death, but sometimes over a period of years. These gifts differ from outright donations in timing, structure, and often tax treatment. They're called "planned" because they require thought, legal arrangements, and usually professional advisor involvement.

The most common forms include:

Bequests: Gifts made through a will or living trust. Donors designate your institution to receive assets after their death — cash, securities, real estate, retirement accounts, or other property. This is the simplest and most popular form of planned giving.

Charitable Gift Annuities: Donors transfer cash or securities to your institution in exchange for fixed payments for life. When they pass, the remaining principal stays with your school. Donors get income, a partial tax deduction, and the satisfaction of a significant future gift.

Charitable Remainder Trusts: Similar to gift annuities but structured as trusts. Donors (or beneficiaries they name) receive income for life or a term of years, then the "remainder" goes to your institution. These work well for donors with highly appreciated assets who want to avoid capital gains taxes while generating retirement income.

Life Insurance: Donors name your institution as beneficiary of a life insurance policy, either an existing policy they no longer need or a new policy purchased specifically for this purpose. Some donors pay premiums and claim deductions; others give paid-up policies.

The distinction between outright and deferred gifts matters for planning and accounting. Outright gifts hit your revenue immediately. Deferred gifts show up as "expectancies" — documented commitments you can count on but haven't received yet. Both have value. Outright gifts fund current operations. Deferred gifts build endowment and provide long-term financial security.

Building a Planned Giving Program

You don't need a massive advancement shop to launch a planned giving effort. You need clarity about what you're offering, effective donor communications that reach the right donors, and enough expertise to handle gift planning conversations competently.

Start with marketing. Many planned giving programs fail because donors don't know they exist. You can't assume people understand charitable gift annuities or charitable remainder trusts. Most don't. Your job is to educate and inspire.

Effective planned giving marketing includes:

  • Regular communication through alumni magazines, newsletters, and dedicated mailings about legacy giving opportunities
  • Website content explaining each gift type in plain English, with calculators that show potential income and tax benefits
  • Personal stories from donors who've made legacy commitments, describing why they chose to remember the institution in their estate plans
  • Seminars and workshops on estate planning and charitable giving, often co-hosted with financial advisors and attorneys

Don't rely on jargon or technical language. Talk about impact and legacy. "A bequest ensures students like you will have access to scholarship support for generations" resonates more than "testamentary gifts provide endowment growth."

Gift planning conversations are where marketing turns into commitments. When donors express interest, you need staff who can discuss their goals, explain options, and guide them to appropriate vehicles. This is where prospect research and management becomes essential. You don't need to be an attorney or CPA, but you need enough fluency to help donors think through what makes sense.

Qualifying donors helps focus effort. Look for:

  • Age: Donors typically make planned gift commitments in their 60s and beyond
  • Loyalty: Multi-year donors and engaged alumni are your best prospects
  • Asset profiles: Donors with appreciated stock, real estate, or retirement accounts benefit most from certain gift structures
  • Family circumstances: Donors without children or those whose children are financially secure are often most interested in legacy giving

Partnership with professional advisors strengthens your program. Attorneys, financial planners, and CPAs guide their clients on estate and tax planning. Building relationships with these advisors through seminars, continuing education credits, and personal outreach helps them recommend your institution when clients express charitable intent.

Legal and technical requirements vary by gift type. Bequest language must be precise to avoid ambiguity or challenges. Gift annuities require licensure in many states and actuarial calculations to set payment rates. Charitable remainder trusts need proper trust documents drafted by attorneys. Don't try to do this yourself. Work with your institution's legal counsel and bring in specialized consultants when needed.

Bequest Programs: The Foundation

If you do nothing else in planned giving, build a strong bequest program. Bequests require no upfront cash from donors, no complex legal structures, and no licensure or regulatory compliance. They're the easiest gifts for donors to make and the simplest for you to market.

Bequest language is critical. Donors or their attorneys need clear, specific language to include in wills or trusts. However, according to Caring.com's 2025 Estate Planning Study, only 24% of Americans have a will in 2025 — down from 33% just three years ago, making donor education about estate planning more important than ever. Provide sample language on your website and in marketing materials:

"I give [percentage, dollar amount, or description of property] to [official legal name of institution], located in [city, state], for [general purposes, specific program, endowment, etc.]."

Make sure you're using your institution's correct legal name. Make sure donors understand whether they're making unrestricted gifts (which give you maximum flexibility) or restricted gifts (which support specific purposes like scholarships, faculty chairs, or building maintenance).

Recognition societies matter enormously. Creating a named society for donors who've included your institution in their estate plans — often called Heritage Societies, Legacy Circles, or 1887 Societies (insert your founding year) — gives donors public acknowledgment and creates community.

Members receive:

  • Recognition in publications and on donor walls
  • Special events exclusive to legacy society members
  • Updates on how planned gifts are making impact
  • Invitations to campus programs and leadership gatherings

Recognition costs almost nothing but delivers enormous value. Donors who make planned gift commitments don't receive immediate gratitude the way outright donors do. Recognition societies fill that gap and encourage others to follow.

Bequest intention tracking is essential. When donors tell you they've included you in their estate plans, document it in your higher education CRM system. Record the date of notification, the estimated value if they share it, and whether the gift is restricted or unrestricted. Update your donor database. Assign stewardship responsibility so someone stays in touch.

Not all donors will tell you about bequests. Some prefer privacy. Some worry they might need to change plans. But encouraging disclosure through recognition and gentle marketing increases documentation rates and helps you plan.

Stewardship keeps donors engaged and prevents changed minds. Estate plans get revised. Donors who feel disconnected or unappreciated sometimes remove charitable bequests. Donors who feel valued and see ongoing impact stay committed.

Effective stewardship includes:

  • Annual acknowledgment of their legacy society membership
  • Impact reports showing how planned gifts are being used
  • Personal notes from leadership thanking them for their commitment
  • Invitations to campus and special events
  • Recognition in publications without being overbearing

The goal is to make donors feel like permanent members of the institution's family, not just names on a prospect list.

Life Income Gifts: Advanced Vehicles

Once your bequest program is running, consider adding life income gifts. These require more expertise and infrastructure but appeal to donors who want immediate tax benefits, income generation, or creative solutions to complex financial situations.

Charitable gift annuities are the most common life income vehicle. Donors transfer cash or appreciated securities to your institution. You pay them (or beneficiaries they name) a fixed annual amount for life. When they die, the remaining principal becomes yours.

Gift annuities appeal to retirees seeking stable income and donors with highly appreciated stock who want to avoid capital gains taxes. Rates are set by the American Council on Gift Annuities and vary by age — older donors receive higher payment rates because their life expectancy is shorter. Current rates remain at their highest levels in 16 years, and starting in 2024, IRA owners aged 70½ and older can donate up to $54,000 of their qualified charitable distributions to CGAs.

Administering gift annuities requires:

  • State licensure in many jurisdictions
  • Segregated reserves to cover payment obligations
  • Investment management to ensure sustainability
  • Actuarial calculations and compliance reporting

Many smaller institutions outsource gift annuity administration to third parties like gift annuity services or pooled investment funds. This reduces administrative burden while still allowing you to market and close these gifts.

Charitable remainder trusts work similarly but offer more flexibility. Donors establish trusts that pay income to themselves or beneficiaries for life or a term of years. When the trust terminates, the remainder goes to your institution.

There are two main types:

  • Charitable Remainder Annuity Trusts (CRATs): Pay a fixed dollar amount each year
  • Charitable Remainder Unitrusts (CRUTs): Pay a fixed percentage of trust assets, revalued annually

CRUTs are more popular because they allow additional contributions and provide inflation protection as assets grow. Both offer immediate charitable tax deductions based on the present value of the remainder interest.

Charitable remainder trusts require attorneys to draft trust documents and trustees to manage investments and distributions. Donors often serve as their own trustees or appoint family members, but your institution can serve as trustee if you have the infrastructure. Many schools avoid this complexity and focus on helping donors establish trusts that ultimately benefit the institution without taking on fiduciary responsibility.

Donor advised funds occupy a gray area in planned giving. Technically they're outright gifts — donors receive immediate tax deductions and transfer assets to the DAF sponsor. But donors retain advisory privileges over how and when grants are made to charities, including your institution.

DAFs have exploded in popularity because they're simple, flexible, and don't require custom legal documents. According to the DAF Research Collaborative's 2025 report, total assets in DAFs grew 27.5% to reach $326.45 billion, with contributions increasing 37.3% to $89.64 billion. Donors fund DAFs with cash, securities, or even cryptocurrency, take immediate deductions, and recommend grants over time.

For your institution, DAFs represent both opportunity and challenge. They offer a vehicle for donors who want tax benefits now and giving flexibility later. But they also capture dollars that might otherwise come directly to you through annual fund strategies, and donors sometimes forget about DAF balances or redirect them elsewhere.

Encourage donors to recommend grants from their DAFs regularly. Provide suggestions for how DAF dollars can support specific programs. Build relationships with major DAF sponsors like Fidelity Charitable, Schwab Charitable, and community foundations.

Stewardship and Recognition

Planned giving requires long-term stewardship. Unlike annual fund donors who give and receive immediate acknowledgment, planned giving donors make commitments years or even decades before you receive funds. Keeping them engaged, informed, and appreciated during that time is essential.

Tiered stewardship makes sense:

For documented bequest donors, send annual legacy society updates, invite them to special events, and feature them in publications (with permission). Assign a gift officer to maintain contact and update records when circumstances change.

For life income gift donors, provide regular statements showing payment history and impact updates. These donors have a financial relationship with you — they're receiving income. Treat them like investors as well as philanthropists.

For all planned giving donors, communicate impact. Show how previous planned gifts have funded scholarships, endowed faculty positions, or supported campus improvements. Help donors see that their eventual gift will make a lasting difference.

Recognition should feel personal, not transactional. Avoid over-acknowledging to the point of annoyance, but don't go silent for years between touches. Balance matters.

Technology helps manage stewardship at scale. CRM systems can track planned gift documentation, schedule touchpoints, and generate reports. Marketing automation platforms can deliver personalized content based on gift type and donor interests. But don't lose the personal connection. Someone on your team should know each planned giving donor by name and be responsible for relationship continuity.

Building Endowment Strength Through Planned Giving

Planned giving is about more than raising dollars. It's about building financial sustainability and creating a culture of legacy.

Institutions with strong planned giving programs enjoy:

  • Endowment growth that provides permanent funding for scholarships, faculty, and programs
  • Donor loyalty that translates into lifetime engagement and additional gifts
  • Intergenerational connection as families see their commitment honored across decades
  • Financial stability that reduces dependence on tuition revenue and annual campaigns

The best planned giving programs don't operate in isolation. They're integrated with major gift fundraising, annual giving, and capital campaign efforts. Donors who make outright gifts are cultivated for planned gifts. Donors who make planned gift commitments are thanked with opportunities to give now.

Start small if you need to. Launch a bequest society, create sample language, and begin marketing. Add life income gifts when you have the infrastructure and expertise. Build relationships with advisors. Train your advancement team to talk comfortably about planned giving in every donor conversation.

The institutions that do this well secure their future, one bequest at a time. And when those gifts eventually arrive — often larger than anyone expected — they transform what's possible.

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