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FUNDAMENTALS OF PLANNED GIVINGMost charitable organizations think about planned giving from time to time butmany of them put off implementing a planned giving program to another day—atomorrow that never comes.This chapter summarizes the concept of planned giving and introduces itsbasic forms. As noted, the details associated with each of the planned givingtechniques are discussed in Part Four.§ 5.1 INTRODUCTIONDonors and the charitable organizations they support commonly expect gifts tobe in the form of outright transfers of money or property. For both parties, a giftis usually a unilateral transaction, in a financial sense, with the donor partingwith the contribution and the donee charitable organization acquiring it. Theadvantages to the donor in these instances are confined to the resulting charitablecontribution deduction and the personal enhancement derived from makingthe gift.There are, however, forms of charitable giving that provide far greater financialand tax advantages to the donor. This type of giving is frequently referred toas planned giving and sometimes deferred giving.It is somewhat difficult to create a “bright-line” (that is, clearly delineating)test for differentiating between planned gifts and other charitable gifts. Of course,small and modest outright gifts of money or property do not qualify as plannedgifts. Beyond that, opinions differ. Some assert that any gifts made by means of awill are planned gifts; others disagree. Some believe that gifts of insurance policiesare planned gifts; others say they are not. Wherever the line is drawn, it can be saidthat a planned gift is a charitable gift that is integrated with the donor’s overallfinancial (including estate) plans.§ 5.2 APPRECIATED PROPERTY GIFTSOne of the chief principles underlying (and creating) the advantages of charitablecontributions of securities, real estate, and other property is that the deductibleamount is generally equal to the full fair market value of the property at thetime of the gift. 1 This means that the amount of appreciation in the property (theamount exceeding the donor’s basis), which would be taxed as capital gain ifthe property were sold, escapes regular income taxation. For this favorableresult to occur, the property must constitute long-term capital gain property. 2Percentage limitations apply regarding the extent of annual gift deductibility(depending mainly on whether the donee is a public charity or a private foundation,3 on the carryover rules concerning the deductibility of excess giftamounts, 4 and on special rules that apply in computing the deduction for giftsof tangible personal and other forms of property). 51 See § 4.2.2 See the discussion of this term in §§ 2.16(a), 4.3.3 See § 3.4.4 See Chapter 7.5 See Chapter 4. 146