Planned Giving Terms


As used in planned giving, refers to the factors used to calculate the value of lifetime payments to individuals or organizations.

Adjusted Gross Income (AGI)
The sum of an individual's taxable income for the year, before taking your standard or itemized deductions (found on the bottom of the first page of an IRS 1040). Individuals may deduct charitable cash contributions up to 50% of AGI, or for gifts of appreciated property the deductible limit is 30% of AGI in any given tax year.

A contractual arrangement to pay a fixed sum of money to an individual(s) at regular intervals. The charitable gift annuity is a gift that secures fixed lifetime payments to the donor and/or another individual.

A professional assessment of the value of a piece of property. Donors contributing real or tangible personal property (books, collectibles, etc.) worth $5,000 or more must secure an independent appraisal of the property to substantiate the value they claim as a charitable deduction.

Appreciated Property
Securities, real estate, or any other property that has risen in value since the benefactor acquired it. Generally, appreciated property held by the donor for more than a year may be donated at full fair market value with no capital gains cost.

Basis or Cost Basis
The donor's purchase price for an asset, possibly adjusted to reflect subsequent costs or depreciation. If Mr. Sample bought stock for $100 per share and sold it for $175, his cost basis in the stock is $100 per share.

The recipient of a bequest from a will or a distribution from a trust, retirement plan, or life insurance policy.

A transfer of property or cash to an individual or organization under a will.

Capital Gains Tax
A federal tax on the appreciation in an asset between its purchase and sale prices.

Endowment Fund
The permanently held capital of a non-profit used to support ongoing projects and objectives of the organization's mission.

Estate Tax
A federal tax on the value of the property held by an individual at death (paid by the estate, not the recipients of bequests). In contrast, state inheritance tax is applied to the value of bequests passing to beneficiaries; it is also paid by the estate before the distributions are made.

The person named in a will to administer the estate (known in some states as the “personal representative”).

Fair Market Value
The price that an asset would bring on the open market.

The individual transferring property into a trust.

Income Interest
In a trust, the right to receive payments from the trust for the recipients lifetime or a term of years.

Life Income Gift
A planned gift that makes payments to the donor and/or other beneficiaries for life or a term of years, then distributes the remainder to a nonprofit organization.

Personal Property
Securities, artwork, business interests, and items of tangible property as opposed to “real property,” used in planned giving to refer to land and the structures built on it.

Present Value
The value on a given date of a future payment or a series of future payments, discounted to reflect the time value of money based on various factors such as investment risk and inflation.

The review or testing of a will before a court to ensure that the will is authentic and the estate is distributed properly.

Remainder Interest
In a trust, the portion of the principal left after the income interest has been paid to the beneficiary. A charitable remainder trust pays income to the benefactor or other individuals and then passes its remainder to charity.

A legal term for the individual or organization who receives the trust principal after the income interest has been satisfied.

The individual making the will.

A transfer of property by the grantor to the care of an individual or organization, for benefit of the grantor or others.

An individual or organization carrying out the wishes of the person who established the trust, paying income to the beneficiary(s) and preserving the principal for ultimate distribution.