For charity staff, having a solid grasp of Wills and estate planning can go a long way. It might be exactly what a donor needs to feel more at ease, which could result in more bequests to your organization. While many donors are familiar with making one-time gifts or understand what’s involved in becoming monthly or annual supporters, the idea of "planned giving" or "legacy giving" can feel a bit more abstract.
Legacy gifts can be made in a few ways—including naming a charity as a beneficiary on a life insurance policy or a registered investment account (like an RRSP or TFSA). While those are important options, this article will focus specifically on gifts made through a Will. For many donors, their Will is the most familiar and accessible way to make a lasting impact.
The good news? You don’t need to be an expert to offer meaningful guidance. By understanding a few simple concepts, you’ll be better equipped to support donors. Here’s what you need to know to feel more confident in these conversations.
The Basics of a Will: “Who Gets What”
At its core, a Will is a straightforward document that answers a few big questions—and one of the most important is: Who gets what? This part of the Will outlines how someone’s assets (like money, property, or other possessions) will be distributed after they’re gone. While some Wills are more complex than others, every Will has a section dedicated to this essential question.
For donors thinking about leaving a gift to charity, this is where the magic happens. It’s their opportunity to create a lasting legacy, and they have a few options to consider.
Specific vs. Residual Gifts
One of the first decisions a donor usually makes is whether to leave a specific gift, which is a fixed dollar amount, or a residual gift, which represents a percentage of their estate.
There are benefits to each type of gift for both the donor and the charity. A specific gift provides clarity and certainty—the charity knows exactly how much it will receive, making it simpler from an accounting perspective. For various reasons, some donors prefer this type of bequest. On the other hand, a residual gift offers growth potential. If the donor’s estate increases in value over time, so does the size of the gift. It can be a win-win for both the donor and the charity.
Primary vs. Contingent Gifts
Another important concept is the difference between primary and contingent gifts.
A primary gift is a guaranteed gift, as long as there is enough money in the estate to support it. This type of gift is written directly into the Will as a set allocation. For example, a donor might state, “I leave $5,000 to [Charity Name],” which provides a clear and direct instruction to distribute the specified amount to the charity.
A contingent gift only goes to the charity if the original, or primary, beneficiary is no longer alive. It is contingent on that primary beneficiary being unavailable to receive the gift. For example, a donor might state, “I leave the residue of my estate to my spouse. If my spouse is not alive, I leave the residue of my estate to [Charity Name].” With this type of gift, the charity may or may not receive it, depending on the circumstances at the time of the donor’s passing.
Knowing the difference between these two types of gifts can make a big impact when talking with donors. Some donors worry about taking funds away from family members or close friends. By explaining that they can name your charity as a contingent beneficiary, you’re offering them a low-pressure way to include a gift in their Will—it only happens if certain conditions are met.
Other donors may feel confident that their estate can support family, friends, and charities all as primary beneficiaries, which allows them to divide their legacy more intentionally. Each approach has its appeal, and understanding both options gives you the tools to support donors in making choices that feel right for them.
Designated vs. Undesignated Gifts
When donors leave gifts to charity in their Wills, they can choose to make those gifts designated or undesignated.
A designated gift is when a donor specifies how their gift should be used by the charity. For example, they might direct the funds to a specific program, project, or initiative, such as supporting scholarships, building maintenance, or research efforts. Designated gifts align closely with donor intent, giving them peace of mind that their contributions will support the causes they care most about. This clarity can inspire larger gifts from donors who feel passionate about a particular program, knowing exactly where their money will go.
However, designated gifts can also limit a charity’s flexibility. If the specified purpose is too narrow or no longer aligns with the organization’s priorities, it can be difficult to use the funds effectively. There is also an administrative burden involved in tracking and managing designated gifts to ensure they are used as intended. Over time, a donor’s designated purpose may become outdated, especially if the charity’s focus or needs evolve.
An undesignated gift is when a donor leaves a gift to the charity without specifying how it should be used. These funds typically go into the charity’s general fund, allowing the organization to allocate the money where it’s needed most. One of the main advantages of undesignated gifts is that they provide charities with greater flexibility. These funds can be used to address immediate needs, cover operational costs, or invest in new opportunities. Without restrictions, undesignated gifts are easier to manage and distribute efficiently. They also allow charities to respond to changing circumstances over time, ensuring that resources are directed where they will have the greatest impact.
Both designated and undesignated gifts play important roles in a charity’s financial health. While designated gifts can fund specific programs, undesignated gifts provide essential flexibility. Encouraging a balance between the two ensures charities can meet both donor expectations and organizational needs.
Final thoughts
You don’t need to be a Wills or estate planning expert to have meaningful conversations with donors about legacy giving. Once you’ve got a handle on a few key ideas, you’ll feel more comfortable answering questions, easing any concerns, and building trust. And those small steps can go a long way toward increasing the number of legacy gifts your charity receives.
Daniel Goldgut is the co-founder of Epilogue, an innovative online platform revolutionizing estate planning in Canada. With a background in law and years of experience in private practice, Daniel transitioned from a legal career to entrepreneurship, driven by a passion for making Wills and estate planning more accessible and affordable for everyone. He collaborates closely with charities to enhance their legacy giving programs, helping organizations grow their impact. daniel@epiloguewills.com
