Glossary of Terms

Terms associated with planned giving:

Planned Giving: As systematic effort by an individual (donor) for the purpose of generating a philanthropic gift to an organization or entity, that is structured and integrates sound personal, financial, and estate planning concepts. A planned gift has tax implications in many cases, and is often transmitted through a legal instrument such as a will or trust.

Deferred Giving: A deferred gift is a donation that is committed to a charitable organization but is not available for use until a future time, usually upon death of the donor.

Endowment: A financial asset, in the form of a donation made to a charitable or not for profit organization, consisting of investment funds or other property or assets that may or may not have a stated purpose at the bequest of the donor. Most endowments are designed to keep the principle amount intact while using the investment income from dividends for charitable efforts.

Charitable Gift Annuity (CGA):  A gift vehicle which involves a contract between a donor and a charity, whereby the donor transfers cash or property to the charity in exchange for a partial tax deduction and a lifetime stream of annual income from the charity. Upon the donors death, the charitable organization would retain the balance.

Individual Retirement Account (IRA): Allows individuals to direct pre-tax income, up to specific annual limits, toward investments that can grow tax deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their traditional IRA. Contributions to the traditional IRA may be tax-deductible depending on the taxpayers income, tax filing status, and other factors. There are many variants to the traditional IRA (e.g. Roth IRA, SEP IRA, etc.)

Donor Advised Fund (DAF): A charitable giving vehicle administered by a not for profit entity created to manage charitable donations given by an individual, family, or organization. To participate in a donor advised fund, an individual or organization creates a fund to deposit cash, securities, or other financial instruments. They surrender ownership of any donation that is deposited into the fund, but retain advisory privileges on how the fund is distributed to the charitable organization.