Too Much Focus on Cash? What About Assets?
I am doing a really interesting capacity study/feasibility study. A part of the planned discussion includes whether or not the individual/couple has considered philanthropy in their estate.
As a “tax lawyer” who has spent almost 30 years in the planned giving space (kind of my specific fundraising expertise), I take it for granted that most people think about this….and I am constantly reminded that I am wrong. Nearly all of the discussions I am having indicate few thoughts about philanthropic giving in estates. And these are “well-healed” people…they have resources.
While charitable giving is common during a person’s lifetime, the statistics around planned giving tell a different story—one that suggests many are missing a significant opportunity to make a lasting impact. Studies indicate that while 90% of Americans donate to charity during their lifetimes, fewer than 10% include a charitable bequest in their wills or estate plans.
Even among high-net-worth individuals, where philanthropy is a priority for many, only about 15% have designated charitable gifts in their estate plans. This gap suggests that either the conversation isn’t happening, or individuals simply aren’t aware of how easy it is to make a meaningful philanthropic gift as part of their legacy. And the totality of the possibility across throughout America is IMMENSE. According to Merrill Lynch, the transfer of wealth in the next 25 years tops $85 TRILLION….and only about 10% is targeted toward nonprofits.
Why does this disconnect exist? One reason is that estate planning often focuses on asset distribution to family members, minimizing taxes, and ensuring financial security. Philanthropy is rarely a primary topic of discussion unless advisors proactively bring it up. Many donors also assume their lifetime giving is sufficient or that their wealth will naturally support good causes without a formal designation.
Additionally, many charities focus almost exclusively on immediate financial needs, prioritizing annual fundraising and short-term cash flow over long-term sustainability. Planned giving can seem abstract compared to pressing funding needs, and development teams may not invest enough time in conversations about legacy giving. However, by neglecting estate gifts, organizations forgo a critical revenue stream that can ensure stability and impact for future generations.
Incorporating philanthropy into estate planning can be both simple and transformative. A bequest, charitable remainder trust, or beneficiary designation on a retirement account can provide substantial support to a nonprofit while maintaining financial flexibility for heirs. Even a modest percentage of an estate left to charity can create a lasting legacy far greater than most people realize.
Nonprofits, financial advisors, and estate planners must work together to change the narrative. By normalizing the conversation about charitable estate gifts and educating donors on their impact, more individuals can align their values with their wealth—ensuring their impact lasts far beyond their lifetime.
