Planned giving? Deferred giving? Let’s call it charitable gift planning!

What’s in a name?

By Michael Johnson
Guest blogger

People often ask, “What is the difference between deferred giving, planned giving and charitable gift planning?  Isn’t it all the same?”  Certainly there have been times in the past when these terms were commonly interchangeable. That was absolutely the case when I entered the field 25 years ago.  But over the years, most practitioners have taken to using “charitable gift planning” for a number of good reasons.

First, the term “planned giving” always begged the question, “What is an unplanned gift?”  As if there was some way a check got written accidentally or, even worse, without the donor’s knowledge!  In this sense, all gifts are planned gifts, so what is the distinction?

Another common term used when I was a young man (and the republic was new!) was “deferred giving” as if the only gifts that required planning were gifts which were completed at a later date, like upon the donor’s death. This certainly covers a lot of very popular gifts such as bequests, beneficiary designations and life income gifts, but it does not address the outright transfer of assets, like securities, real estate and other property, that support so many capital campaigns and other major gift efforts.

The wide acceptance of the term “charitable gift planning” is due, in my belief, to two things.

1. It is a term which encompasses any type of giving, both outright and deferred, which is more complicated than writing a check.  But mostly because it places the proper emphasis on the planning process in which the donor and his or her advisors participate.
2. It is the process by which a donor reaches multiple goals: personal, financial and philanthropic. It is donor-centric and takes into account the person’s goals, risk tolerance and family situation.

From a personal standpoint, it is far more rewarding than simply closing a large gift because I have had the privilege of being a participant in helping to craft the very best plan for my client, the donor.