Legacy giving: is it about tax avoidance or eternal values?

Legacy giving can have an amazing impact on your ministry. According to my friends at the Association of Fundraising Professionals (AFP), there are many reasons for someone to consider giving a legacy gift from an institutional perspective as it may provide an opportunity to give with income and estate tax deduction.

Why?

• It may offer the opportunity to give with income and estate tax deduction.
• It may offer the opportunity to enjoy either a fixed or variable income or even supplement retirement income.
• If highly appreciated assets are contributed, it may avoid or lessen capital-gains tax liabilities.
• It may offer opportunity for increased income compared to other investments.

• It may allow competent management of assets transferred as gifts.
• It may allow donor to pass an asset to an heir after an established period of organizational use.

And, of course, there are benefits to you as the recipient such as:

• It establishes a long-term relationship with the donor.
• It encourages the donor to think about gifts of assets in addition to income.
• It often provides future funds to be counted on (endowment, equipment, scholarship, etc.).
• It enhances opportunities for charitable bequests, particularly in the case of gift annuities.

But what about the reasons behind legacy giving from a spiritual perspective?

Consider Proverbs 3:9 – “Honor the Lord with your wealth and your first fruits.” We usually quote that scripture when talking about the tithe, as first fruits are defined as the first 10% of all you produce, your income and your tithe.

Much of our teaching is usually based on giving and generosity expressed in relation to current income. We can do a great job of helping people think about giving from each pay period. However, we don’t regularly discuss generosity as it relates to our stewardship of assets.

If you look back at Proverbs 3:9, even before the mention of first fruits, you see the word “wealth” in this passage. Wealth is technically defined as:

• an abundance of valuable possessions or money
• material prosperity
• plentiful supplies of a particular resource

This definition of the word itself tells us that our wealth includes not only our income, but also our possessions, our accumulated assets, and our net worth.

Giving from accumulated assets is part of a whole-life stewardship philosophy. Therefore, it should be included in the giving sermons that you preach at least twice every year. Calling for faithful stewardship in this life and beyond is a call to full discipleship and maturity in Christ.

Let us consider this from a real life example.

I give from my income, including generosity beyond the tithe. I also contribute money to my retirement accounts. There, those funds are growing as the investment choices offer dividends and return on my investments as the stocks and mutual funds grow in value. If I want to “honor the Lord with my wealth and first fruits”, then I will be motivated to give a planned gift from those assets that are growing in my investment portfolio.

Legacy giving in the church is less about tax avoidance strategies and more about an eternal values conversation. An effective legacy plan and its resulting gifts are direct results of that ongoing stewardship conversation.

What about you? Do you agree? Disagree?