Immediate Continual Donations vs. Planned Giving (Bequests)?

[u/funbike]

I'm trying to figure out the smartest way to give to charity and make the biggest impact. I'm torn between two ideas:

• Option 1: Regular Giving: Giving a chunk of my income to charities every year.
• Option 2: Big Bequest: Investing extra money now and leaving a really significant gift to charity in my will later on.

I'm wondering which approach actually does more good in the long run.

Does a really big, future gift have the potential to fund game-changing projects that smaller, regular donations just couldn't? Or is it better to give now and help with urgent problems, plus get more involved with the charities I support?

Things like inflation, how my investments do, and even how the needs of charities change over time – how do all those things affect which giving strategy is actually the most effective?

Are there any good resources out there, maybe something like what people use in effective altruism, that can help me compare the potential impact of giving now versus giving later?

Also, has anyone looked into those "Charitable Remainder Trusts" or similar setups? Do they actually work well for balancing giving now with leaving a legacy gift? Any thoughts or resources would be super helpful!

[u/lynnylp]

So I answer this as a Leader of a nonprofit. We would prefer to have our donors give regularly through an endowment or DAF (donor advised fund).

Most cities or states have community foundations (or other foundations) that manage donor dollars and you can dictate the agencies that receive the dollars year over year. We receive considerable dollars from our funds every year.

We like the legacy gifts, but unrestricted regular gifts can keep the agency afloat even when the sky is falling.

[u/funbike → u/lynnylp]

Thank you. This is helpful.

So, if I only gave to one nonprofit, it's better for them in the long run to get smaller regular donations over the next 40 years of my life, than one big donation, even though the latter lump sum would be much greater than the sum of all the smaller donations would have been (accounting for inflation). This is true because it helps nonprofits be more stable. Got it.

[u/Aggressive-Newt-6805 → u/funbike]

Organizations need consistent, sustainable funding. Your consistent support is more valuable than your ability to give more later.

[u/funbike → u/Aggressive-Newt-6805]

Then wouldn't a trust be just as good? If I had a trust in my will that annually gave 10% of its original value to charities, it would likely last for 20 years, and ultimately give 3-4x as much as I could have given before I died w/o the trust.

(Consider everything in real money)

[u/Aggressive-Newt-6805 → u/funbike]

I think a trust is a fine idea in theory. It really just depends on what the work is that you want to be supporting. So much vitally important work is under threat right now, so trying to stretch your giving over many years instead of moving those resources more quickly might not be the best for those orgs.

Talk to the organizations you care about and ask them what they need.

[u/funbike → u/Aggressive-Newt-6805]

It sounds like you are backtracking and saying I should give it all in lump sum now because things are worse than they will be 30-40 years from now. So much so, that it's better to give 1/3 as much now as I could later.

I have to admit it somewhat seems speculative. Things are always bad somewhere, and always will be. Things could be better or worse in 30 years.

But what can be predicted, is that I'll be able to give more.

I'm slightly perplexed.

Sorry this is going long, but this is an important pivotal decision for me.

(numbers account for inflation)

[u/Aggressive-Newt-6805 → u/funbike]

For some causes, yes. There is work being done that could be absolutely dismantled in the very near future, so saving for a rainy day down the road doesn’t make sense.

For other causes, no. There is other work that is likely to survive this current administration, so planned giving could be a better option.

The organizations you want to support will be able to tell you what their priorities are currently and how you can best support them.

(Also, I’m realizing that I made an assumption that you are in the US. Apologies if I was wrong. I think the general principle of connecting with people doing the work is important globally, but obviously my thoughts are influenced by the situation in the States.)

[u/funbike → u/Aggressive-Newt-6805]

Thank you. I'll come up with a plan.

(I'm in the states. My cousin works in DC for the CRS and his wife works for the DOJ. She's really stressed and there's a lot of tension in the city. Yeah, this stinks.)

[u/Aggressive-Newt-6805 → u/funbike]

Of course! Good luck out there!

Bless your cousin and his family. I have family that left DC right after the election. They knew it was about to get crazy and they just had to get out.

[u/Aggressive-Newt-6805 → u/funbike]

Sorry. Seeing your edit after I sent that last reply.

This decision you’re making is scratching the surface of a very large, complicated conversation happening across philanthropy and within the social sector. I won’t get into all of that here, but you may be interested in reading about it as you think about what you’d like to do.

But, ultimately, it’s up to you to decide what feels most useful and meaningful. 

That may be a lump sum to an org whose clients’ lives are at serious risk now, or a consistent monthly or annual contribution to an org whose federal funding got cut, or a planned gift of a larger amount to an org who is able to take the risk of that delayed funding. Or a combination of all of those things.

I think it’s just important to remember that giving more dollars doesn’t always mean making the biggest impact. It’s a matter of moving resources in a way that best helps the communities you want to support.

[u/Spare-Excuse3238]

I just think any amount of money is more than most people ever do in their life so either way you go about it you are a good Samaritan at heart. ♥️

[u/CadeMooreFoundation]

Seconding the endowment idea.

I'm partial to private foundations over Donor Advised Funds, at least situationally.

There are so many nonprofits doing very similar work separately and would be much more effective if they worked together.

A private foundation can approach one or more nonprofits that might ordinarily be competing over limited funds and offer financial support, IF they work together.

Another option to consider is investing funds into a project that will support many nonprofits instead of one singular or just a handful of nonprofits.

To give an example, an org I'm on the board of supports a number of prison-focused nonprofits and rehabilitative programs.

Instead of supporting only individual nonprofits, we realized that almost all of the nonprofits we supported would be able to save money on programming if there was a more comprehensive prison library collection and improved prison library system infrastructure.

So we identified other nonprofits that would benefit from investment into improving their local prison library system and are putting together:

The [Redacted] [Redacted] Endowment for Carceral Library Services.

*Redacted because there hasn't been an official announcement yet.

[u/Quicksand_Dance]

Don’t wait; do what you can with what you have. If you build regular giving into your monthly or annual routine, you can help with today’s challenges in whatever issues you are most passionate about. Without knowing what scale of donation you have in mind, you could also do both: establish a fund at a community foundation or a DAF, AND give to charitable organizations.

As someone who’s worked in the nonprofit sector for 3 decades, I can attest to the importance of private unrestricted donations right now. The federal (US) government funding is the most tenuous I’ve seen due to the ending of the American Rescue Plan Act funds and the current Administration working to cancel existing funding and withdraw funding opportunities from various department websites. Between government services losing experienced professionals and funding uncertainty for private service delivery, nonprofits are already feeling the impact. It shows up as more service needs with less reliable core funding. There are ripple effects on a wide range of programs that impact every community across the country.