What Nonprofits (and Donors) Need to Know to Make Giving and Receiving Gifts Easier
When it comes to helping supporters plan future gifts, one of the most common sources of confusion is deciding which assets should be included in a will and which should be distributed via beneficiary designations. I wrote about this a couple of years ago, but recent conversations with individuals have prompted me to revisit this important topic, especially how these vehicles can impact planned gifts for nonprofits.
These conversations happened with people, ages 35 to 85, who are hazy about the fairly simple rules and guidelines of estate planning and asset distribution. This confusion can lead to inaction. This means that asset distribution wishes can be mischaracterized or not properly allocated to the correct estate planning vehicle. For example, many people assume their will covers everything—from bank accounts to retirement funds to their guitar collection—but the reality is more nuanced. Understanding the distinction can save time, money, and unnecessary stress.
Why This Matters for Nonprofits
Most donors want to support causes they care about beyond their lifetime. But many never complete a planned gift simply because they’re confused:
- “Do I need to put my bank or investment accounts in my will?”
- “What happens to my retirement plan?”
- “Is listing a charity in my will the same as naming them as a beneficiary?”
This confusion stops legacy gifts from happening.
Nonprofits that clearly explain the difference between wills and beneficiary designations can unlock significantly more planned gifts—with less friction for donors. Nonprofits may receive gifts via beneficiary designations (much faster receipt of gifts since these funds bypass probate) or wills.
Let’s explore a few important nonprofit-oriented topics:
- Understand the difference between wills and beneficiary designations.
- How to explain each option clearly to donors.
- How to integrate both into your legacy giving strategy.
- How to use simple language and concepts to make the process easy.
- How to leverage online giving platforms like LifeLegacy to automate and scale impact.
Part 1: Understanding Two Paths to Legacy Giving
1. Wills (Last Will and Testament)
A will is a legal document that goes through probate and allows a donor to:
- Distribute personal property (house, car, valuables, pets).
- Name guardians and executors.
- Provide instructions for final wishes.
- Leave charitable gifts or bequests.
✅ Most common charitable bequest language:
“I give [% of my estate / $ specific amount / the residue of my estate] to [Charity Name], a nonprofit organization located at [address], Tax ID: [EIN].”
Important: Many donors think their will controls everything, but it doesn’t. That’s where beneficiary designations come in.
2. Beneficiary Designations (Outside the Will)
Certain assets bypass the will entirely and go directly to the person or charity listed on a beneficiary form or POD/TOD (Payable/Transfer on Death) form.
These include:
- Retirement accounts (IRA, 401(k), 403(b))
- Life insurance policies
- Bank accounts with POD/TOD
- Investment/brokerage accounts
- Some annuities
✅ These gifts are often faster, simpler, and larger than will-based gifts.
✅ Donors can often update beneficiary designations online or with one page—no attorney required.
✅ Charities can be listed as:
- Primary beneficiary
- Contingent/secondary beneficiary
- One of several percentage-based beneficiaries
Part 2: Why This Distinction Matters for Nonprofits
1. Beneficiary gifts are often the largest planned gifts
Retirement accounts can be a donor’s largest asset, and they are tax-inefficient to leave to heirs. Leaving them to charity is often the most tax-smart gift a donor can make.
2. Wills alone are not enough
If you’re only telling donors “remember us in your will,” you’re missing half the opportunity.
3. Donors need guidance—and nonprofits are trusted to provide it
Most donors have never been made aware of the difference. If your nonprofit can explain it clearly, you become a trusted advisor and catalyst for action.
Part 3: How to Communicate This Clearly to Donors
Use Plain, Donor-Friendly Language
Explain the difference simply:
- “Some assets go in your will, typically your “stuff.”
(Home, personal property, distribution instructions, cash gifts)
- “Some assets use a beneficiary designation instead.”
(Retirement plans, life insurance, bank accounts)
- “Both options can support our mission.”
Provide Sample Donor Language
For Wills (Bequest):
“I give 10% of my estate to [Charity Name], EIN ______, located at ______.”
For Retirement or Life Insurance Beneficiary Form:
“Charity Name, EIN ______”
Make It Easy: Include These in Your Materials
✅ FAQ: “Do I need a will to leave a gift?”
✅ Short explanations: “Wills vs. beneficiary designations”
✅ Step-by-step instructions
✅ Downloadable beneficiary form guide
✅ Sample bequest language
✅ Conversation starters for donors
Part 4: Integrate Both Options Into Your Legacy Giving Strategy
1. On your legacy giving webpage:
Create two sections:
- “Include us in your will” (with language)
- “Name us as a beneficiary” (with instructions)
2. In donor communications:
Use language like:
“You can leave a legacy gift in two simple ways: through your will or by naming our organization as a beneficiary on a retirement or life insurance plan.”
3. In one-on-one conversations:
Ask:
“Have you reviewed the beneficiary designations on your accounts recently?”
This question opens the door to meaningful planned gifts.
4. Use stories:
Example:
“Jane left our organization 5% of her IRA—it took her just a few minutes to update her beneficiary form, and her gift will provide scholarships for years to come.”
Part 5: How LifeLegacy Helps Nonprofits Maximize Both
LifeLegacy provides nonprofits with:
✅ A white-labeled, attorney-approved online will platform donors can complete in minutes
✅ Built-in charitable bequest prompts
✅ Easy guidance on beneficiary designations and POD/TOD accounts
✅ Marketing tools, templates, and donor education materials
✅ Automated reporting and gift tracking
✅ A 94% client retention rate—because it works
The result:
Nonprofits that use LifeLegacy secure more planned gifts, sooner, with less staff time.
Final Takeaway for Nonprofits
To unlock more legacy gifts:
Don’t just talk about wills.
Teach donors about beneficiary designations, too.
When nonprofits communicate this clearly—and offer simple tools—donors take action. The result is larger gifts, deeper relationships, and long-term sustainability for your mission.
Want Help Making This Easy?
LifeLegacy can help your organization:
- Educate donors with ready-to-use materials
- Offer a free online will
- Guide donors through beneficiary forms
- Track and steward legacy gifts
Let’s make planned giving simple, accessible, and impactful—together.
