Definition
A bequest is a gift made through a will, which allows individuals to transfer assets such as money, property, or personal belongings to a nonprofit organization after their death. Bequests are an essential part of planned giving and can take various forms, including specific bequests (a designated amount of money or asset), residual bequests (the remainder of the estate after all debts and expenses have been paid), and contingent bequests (if a primary beneficiary does not survive the donor, the gift then goes to the nonprofit). Bequests can significantly impact a nonprofit’s funding, allowing organizations to plan for the future based on these anticipated gifts. Unlike outright donations, bequests do not provide immediate financial contributions but can contribute to long-term sustainability and financial health for nonprofits when received.
FAQ
A bequest is a specific type of planned gift that a donor designates in their will to be given to a nonprofit organization after their passing. While all bequests are planned gifts, not all planned gifts are bequests, as planned gifts can also include living trusts, gift annuities, and other financial arrangements made during the donor's lifetime.
Yes, bequests that go to qualified nonprofit organizations can be tax-deductible against the estate tax. It's important for donors to consult with a legal advisor or tax professional to ensure the bequest is structured appropriately to maximize any potential tax benefits.
Nonprofits can promote bequests by raising awareness of the opportunity for legacy giving through targeted communications, informational sessions, newsletters, and personal outreach. Establishing a planned giving program and providing resources, such as sample language for wills, can also help encourage supporters to consider bequests.
Common Misperception
Myth
A bequest is only for wealthy individuals.
Fact
Many people believe that only wealthy individuals can make a bequest, but this is not true. Anyone can include a bequest in their will, regardless of the size of their estate. It is about the intention to support a cause or organization that matters to the individual, which can be expressed in a bequest of any amount.