Planned Giving

Planned giving can be when an individual makes decisions about their giving strategy for a current or deferred donation to a charity via many different financial vehicles. At the same time, an active and comprehensive planned giving program within a church also enables that community to establish greater sustainability and implement their vision for the future as members begin making current or deferred gifts.

Since its inception in 1971, the Foundation has assisted local United Methodist churches across the Virginia Conference expand their programs and ministries through effective stewardship of investments and endowment funds, planned giving and church extension loans. A permanent endowment is one component of an active and comprehensive planned giving program.

As an affiliated agency of the Virginia Annual Conference, the Foundation is equipped to guide you through this process. You can contact the Virginia United Methodist Foundation by sending an email to: foundation@vaumc.org. Or call us at (804) 521-1121.

Creating a Lasting Legacy

“For where your treasure is, there your heart will be also.”

— Matthew 6:21

Planned giving teaches us to be faithful stewards of our accumulated assets, to discover the wealth of giving opportunities available to all people. One of the main benefits of planned giving is that it allows individuals to continue their life’s ministry long into the future, even after death.

The most satisfying aspect of planned giving is helping donors find ways to fulfill their hopes and visions to make a difference through the gifts God has provided. Many people in our congregations would like to give and are waiting for us to connect them with giving opportunities that fit their unique life experiences.

It is beneficial, however, to design a planned giving and endowment ministry to inform and educate your congregation about creative gift strategies.

A planned giving ministry connects our spiritual and financial lives in a journey toward health and wholeness.

Giving is good for the soul, mind and body, and God expects good things for us and from us. We can impact the future by decisions we make today.

Planned giving and endowments are vehicles for sharing blessings and maximizing stewardship of our financial gifts and resources.

As leaders in a local church or ministry, our job is to encourage our friends and fellow parishioners to join us in giving a portion of our lifetime’s accumulated assets to bless our church and future generations.

Types of Gifts:

GIFTS OF CASH

Cash is always a welcome gift to any charitable cause. More people give cash than any other type of gift. Cash gifts can be deducted on income tax returns if donors itemize deductions (maximum of 50% of adjusted gross income).

Due to limited cash available at the time, sometimes gifts of cash may be smaller than the donor would like. A cash gift can also be less tax-efficient than a gift of another kind of property. So donors are also encouraged to consider other types of gifts, such as appreciated stocks or mutual funds, or especially donating from tax-deferred assets like retirement accounts.
BEQUESTS, WILLS & BENEFICIARIES
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Bequests — One of the easiest ways to make a charitable gift is through a will or designating the church as a beneficiary. Yet few church members have included their church in their estate planning. Very few people think of including the church in their wills, living trusts or retirement accounts until they are asked. We each have the opportunity to leave a legacy that represents the values we honored and causes we championed during our lives.

Yet nationwide statistics indicate more than half of the adults who die each year do not have a valid will. Without a valid will, the laws of the state decide the disposition of an estate, and charitable gifts are not part of that distribution plan in any state. Records also show people who have made charitable gift planning a part of their will have included their college or university, a medical center, or a national charity — but not their church.

Why, then, are so many other worthy causes named in wills and not the church? Many members do not name their church in their will because no one has ever asked or explained the importance of doing so. Other charities have clearly given them this option and provided assistance in carrying out this act of stewardship.

More information on wills and bequests is available here.
Wills - options to include charitable giving through a will include:

A ﬁxed amount. A will can state a specific amount the donor would like to give to a church or church ministry following his or her death.

A speciﬁc item or designated property. A will can direct specific real or personal property to be given to a church following the donor’s death.

A percentage of the estate. For many people, it may be easier to designate a percentage of their estate rather than a specific dollar amount. That percentage then grows or shrinks in the same proportion as the entire estate.

A residual bequest. After all other bequests are granted, the residual (what remains) can be left to a church. A residual can also be left to a church in addition to a specific bequest named earlier in the will.

Beneficiaries are an easy way to designate a portion of bank and brokerage accounts, life insurance policies and retirement accounts (i.e. IRAs, 401k, 403b, TSPs). Unlike individuals, a church does not have to pay any taxes on inherited retirement accounts.

By simply naming the church as a beneficiary, the account balance is paid out following death, bypassing probate and/or the settlement of an estate, so the funds are available more quickly.
GIVING THROUGH LIFE INSURANCE

GIVING THROUGH LIFE INSURANCE

There are many ways to make charitable gifts through life insurance — each with significant benefits for the church and for the donor. Some options include:

A paid-up policy. The owner and beneficiary designations are changed to the church or charity, and a charitable deduction equal to the replacement value of a comparable policy may be realized by the donor.

A policy on which the donor is still paying premiums. The charity is made owner and beneficiary, and the cash value at the time the policy is given, plus all future premiums paid by the donor, qualify as a charitable deduction for the donor.

Assign the dividends of the policy to the church. The dividends become tax-deductible contributions to the church.
GIVING THROUGH RETIREMENT PLANS
GIVING THROUGH RETIREMENT PLANS

Donors can also include the church as a beneficiary of an IRA, profit-sharing plan, Keogh plan, tax-sheltered annuity or other pension plans. The charitable gift comes from the remainder in the plan following the death of the donor and/or all other named beneficiaries.

Not all retirement plans allow this, but with plans that do, donors need to discuss this with their plan administrator and complete the necessary documents to name their church as a beneficiary. The church may:

Receive a fixed amount or a percentage of the account

Be a secondary beneficiary of the remainder in the plan, only after the death of the donor and spouse

Be the final beneficiary, receiving any remainder in the plan when all other beneficiaries are deceased
APPRECIATED STOCKS & SECURITIES
APPRECIATED STOCKS & SECURITIES

A gift of appreciated securities or stocks can enable the donor to give at a lower cost. In addition to the donor benefitting from a charitable tax deduction for the full value of the securities on the date they are donated, capital gains tax may also be avoided on gifted long- or short-term securities. Many people own appreciated securities that are paying minimal dividends, but they have chosen not to sell due to concerns of paying capital gains taxes.

By giving appreciated securities, the donor not only fulfills their desire to donate but also takes advantage of making the charitable gift at a reduced cost. If proper procedures are followed, the donor can avoid paying capital gains tax, and the church receiving the appreciated stocks or securities can sell them without incurring capital gains tax. If you’re considering this type of gift, we advise you to consult a tax advisor.
RMDs

The federal government mandates withdrawals from IRA and 401(k)-type retirement accounts, known as required minimum distributions (RMDs), when the owner turns 73. Even though the age for RMDs has been raised to 73, 70½-year-olds can still make tax-free transfers.

If you are over 70½ years old and have an IRA or 401(k)-type account, you can transfer money directly from that IRA account to your church, and the withdrawal will not be counted as taxable income. If RMDs are not yet required due to your age, see QCDs below.
QCDs

With a qualified charitable distribution (QCD), a check goes directly from your IRA to your church or the charity you select. Many people who are facing RMDs with tax implications could pay their entire annual tithe or offering at one time – through their QCD – and not have to count that amount as income on their tax return. By giving directly from the account, the distribution is not counted as income even if the donor does not itemize on their income tax forms. Since the money is transferred directly to the church and not to the donor, the donation becomes a qualified charitable distribution and is not counted as taxable income.

While the age for RMDs is 73, QCDs can be done by anyone who has reached the age of 70½. Retirees who are over that age and want to donate to their local church should consider a qualified charitable distribution. Donors over age 70½ can give up to $108,000 per year (as of 2025) from their tax-deferred retirement accounts.

Always consider current tax policy regarding distributions by age, which can change periodically.
DONOR-ADVISED FUNDS
DONOR-ADVISED FUNDS

A donor-advised fund (DAF) is a private fund administered by a third party to manage charitable donations for an organization, family or individual. The overall amount donated can be deducted from taxes the year it is gifted, and then the remaining balance of the fund is distributed in the following years until depleted.

If you have larger amounts of stock or cash to donate but do not want to distribute the whole amount to charities in a one year, you can set up a donor-advised fund (DAF). The funds are transferred to the DAF and the total amount counts as a charitable contribution on your tax form for the year of the initial creation of the DAF. As the donor, you’re then allowed to advise or direct the holding agency to which charity and when to send donation checks.
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Certain restrictions apply. For instance, a DAF may not be funded with required minimum distributions (RMDs). DAF funds may only go to registered charitable institutions, such as the church. They also may not be used to buy items from a charity, such as Girl Scout cookies.

The Virginia United Methodist Foundation offers DAFs with no set-up or disbursement fees. The only restriction is that at least 50% of the donations must go to a United Methodist cause, such as your local UM church, UMCOR, etc. The remaining 50% can be given to other charitable organizations.

One way DAFs are used is to “bundle” annual contributions so you can actually exceed the standard deduction on your tax return. By bundling, you can donate a large amount in a financially good year, simultaneously reducing your taxable income by the full amount donated.

In the following years, you can direct the DAF to distribute separate amounts to your church until the DAF is depleted. You can receive the full deduction for the year the DAF is started by itemizing everything that year. When you then make donations from the DAF in the following years, you can apply the standard deduction on your tax return. These individual distributions after the DAF has been set up are not tax-deductible because the overall amount was already deducted from taxable earnings when the DAF was created.
ENDOWMENTS
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ENDOWMENTS

Church Endowment Fund
The Virginia United Methodist Foundation can partner with you and your church to establish a planned giving program and permanent endowment fund. We also offer planning, consultation, education and training services at no charge.

By creating an endowment and planned giving ministry, we build a framework for inviting others into lifelong Christian stewardship, reflecting that all we are and all we have are gifts from God. A planned giving ministry connects our spiritual and financial lives in a journey toward health and wholeness. Additional information on endowments is available here.
5 Ways Endowment Funds Help Churches Grow:

Your church receives increased gifts to fund its ministries.

Your members begin including planned gifts, in addition to current gifts, in their stewardship response.

Your members are educated about these additional gift opportunities for mission and ministry through your church.

Current contributions given in support of the ongoing annual budget are freed up to strengthen and expand existing programs.

With an endowment fund in place, your church and its ministries begin to receive planned gifts that may have previously been directed to other causes.
GIVING REAL ESTATE & PERSONAL PROPERTY/VALUABLES

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GIVING REAL ESTATE & PERSONAL PROPERTY/VALUABLES

Real Estate
Some of the largest charitable gifts made each year are gifts of real estate, and many of the same advantages described earlier for gifts of securities apply to gifts of real estate. Highly appreciated real estate makes a very cost-effective gift since it qualifies as a charitable income tax deduction and avoids capital gains taxes. As always, we recommend consulting a tax attorney or accountant for concrete guidance on this topic.

Personal Property/Valuables
Automobiles, works of art, antiques, coin or stamp collections, jewelry and other items — make generous gifts to the church. Some tax benefits exist for the donor, depending on the value of the donated property and how the gift is to be used by the church.
SUNDOWN CLAUSE

SUNDOWN CLAUSE

A sundown clause is a statement within an endowment agreement that allows the repurposing of assets from a planned gift if the originally designated purpose no longer exists. For example, a gift was made for the ongoing church support of a school and orphanage in country X. After the government changed power in X country, foreign assistance was no longer allowed. A sundown clause would allow the church to repurpose the funds to a similar cause since the original purpose no longer exists.
GIFT ACCEPTANCE POLICY
GIFT ACCEPTANCE POLICY

It is important to have an official gift acceptance policy so the church is prepared for an unexpected gift, such as real estate in need of major renovations, etc. If a gift acceptance policy has already been created, it is easier for your church to decline a property that has greater liability than monetary return. The purpose of a gift acceptance policy is to describe the type of gifts that can be accepted and how they can be accepted.
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Churches and all other charitable organizations are advised to make an intentional effort to fully understand all facts and implications concerning gifts offered to them and take prompt and appropriate action to accept or reject those gifts to avoid potential problems. For example, state and federal environmental regulations and laws make it critical for a church to investigate thoroughly any real property for environmental concerns before the property is accepted. Once the gifted property has been accepted by the church, any environmental liabilities pertaining to that property rest with the church. Always consult with an attorney and other professional advisors before real property gifts are accepted.

Gift acceptance policies are designed to protect the interests of your church and the people who support its programs. These policies assure that all gifts to your church are structured to provide maximum benefit to both parties and do not result in the church incurring disproportionate expense, time or resource commitments upon accepting the gift.

Download our planned giving guide

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Schedule an appointment with our advisors.

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FACTORS TO CONSIDER / DISCLAIMER
While the Virginia United Methodist Foundation can provide assistance in consultation and planning with donors and churches, as well as how to administrate and manage planned giving options, donors should always consult their own legal, tax and financial advisors.

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Planned Giving

Creating a Lasting Legacy

“For where your treasure is, there your heart will be also.”

— Matthew 6:21

A planned giving ministry connects our spiritual and financial lives in a journey toward health and wholeness.

Giving is good for the soul, mind and body, and God expects good things for us and from us. We can impact the future by decisions we make today.

Types of Gifts:

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Forms

Investment Funds

Planned Giving

GIVING THROUGH LIFE INSURANCE

GIVING THROUGH RETIREMENT PLANS

APPRECIATED STOCKS & SECURITIES

DONOR-ADVISED FUNDS

ENDOWMENTS

GIVING REAL ESTATE & PERSONAL PROPERTY/VALUABLES

SUNDOWN CLAUSE

GIFT ACCEPTANCE POLICY

Download our planned giving guide

Schedule an appointment with our advisors.