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SEPTEMBER 29, 2025 - Dorm rooms, drama club and…donor-advised funds? As the school year settles in, we’re continuing our journey through the ABCs of charitable gift planning, because understanding the language of giving is just as foundational as knowing your multiplication tables.

If you’ve ever felt overwhelmed by the different ways to give, you’re not alone. Whether you’re a donor looking to make a meaningful contribution or a nonprofit professional guiding others through the process, the array of charitable giving vehicles can feel like a lot to navigate. But it doesn’t have to be.

This week, we’re unpacking the most common giving vehicles, from donor-advised funds to charitable remainder trusts, helping you choose the path that best fits your philanthropic goals. Bookmark this page for future reference as you continue your philanthropic journey.

Charitable Giving Vehicles Glossary

• Charitable Bundling: A tax strategy that enables donors to maximize their total tax savings over time by front-end loading their giving. Donors bundle multiple years’ worth of charitable donations in a single year to itemize their gifts, then take the standard deduction in subsequent years.
• Charitable Gift Annuity (CGA): A charitable gift annuity is a contractual agreement between a donor and a charity. The donor contributes assets to the organization in exchange for fixed annuity payments for life, or for the lives of one or two other annuitants. The annuity payment and charitable deduction amounts are determined based on the funding amount and the age of the annuitant(s). Upon the death of the annuitant(s), the remaining assets are retained by the organization to further its charitable purposes.
• Charitable Lead Trust (CLT): An individual contributes assets to an irrevocable trust that makes annual distributions to one or more charities for a life term or fixed term of years. After the term ends, remaining assets are most often passed to family members. CLTs are best funded with liquid assets.
• Charitable Lead Annuity Trust (CLAT): A CLAT pays a fixed dollar amount to the designated charity each year, regardless of trust asset performance. This structure offers predictability and is often used when donors want consistent charitable payments.
• Charitable Lead Unitrust (CLUT): A CLUT pays a fixed percentage of the trust’s annually revalued assets to the charity, resulting in variable payments. This structure is ideal for trusts funded with assets that fluctuate in value like mineral interests, real estate or closely-held securities, given there is liquidity in the trust to make annual distributions.
• Charitable Remainder Trust (CRT): An individual contributes assets to an irrevocable trust that makes annual distributions to the donor or other individual beneficiaries for the duration of the life or lives of the beneficiaries, or for a fixed term of years. Once the trust term has ended, the remaining trust assets pass to the donor’s chosen charities. A CRT can be funded with many different types of assets, and the donor is able to take an immediate tax deduction for the present value of the trust assets which will pass to charity.  
  • Charitable Remainder Annuity Trust (CRAT): A CRAT distributes a fixed dollar amount (annuity) annually to the income beneficiary and does not allow for additional contributions to the trust. 
  • Charitable Remainder Unitrust (CRUT): A CRUT distributes a fixed annual percentage based on the balance of the trust assets and does allow for additional contributions to the trust. 
• Deferred Gift: A planned charitable gift that is arranged now but fulfilled later, often through a trust, a beneficiary designation, or as part of a will.
• Designated Fund: A fund that donors establish to benefit a specific charity or charities of their choosing.
• Donor-Advised Fund (DAF): A charitable giving account that is sponsored by a public charity and funded by a donor’s tax-deductible contributions of cash or noncash assets. Contributions to a DAF are invested for the potential to grow, tax-free, over time, and donors retain the ability to recommend grants from the DAF to eligible charities of their choice. 
• Endowment: A permanent fund that provides long-term support for a specific charity or charities. The principal gift amount is invested, and the investment income earned is distributed to the charity. The terms of the gift are set by the donor, and the recipient organization does not have access to the principal.
• Life Income Gift: A planned gift that provides income to the donor (or another beneficiary) for life or a set term, with the remaining assets going to charity. Common examples include charitable gift annuities and charitable remainder trusts.
• Private Foundation: A 501(c)(3) tax-exempt organization that typically receives its support from one source, like a family or corporation.
  • Private Nonoperating Foundation: A type of private foundation that primarily focuses on distributing funds to other public charities or individuals, rather than conducting its own charitable programs. This is the most common type of private foundation and is essentially a grant-making entity.
  • Private Operating Foundation (POF): A type of private foundation that uses the majority of its resources to run its own programs or charitable ventures.
• Public Charity: A 501(c)(3) tax-exempt organization that performs charitable work and receives at least one-third of its funding from the public.
• Qualified Charitable Distribution (QCD): Individuals aged 70½ or older can make annual distributions from their Individual Retirement Accounts (IRAs) directly to qualified charitable organizations, subject to annual limits. These distributions count toward the IRA owner’s required minimum distributions and are excluded from taxable income. Additionally, individuals have a one-time opportunity to use a QCD to establish a Charitable Remainder Trust or a Charitable Gift Annuity, subject to applicable limits.
• Quasi-Endowment: A fund created by a donor or by a charity’s governing board to function like an endowment, but which allows the board to access the principal, if needed.
• Single-Issue Fund: A charitable fund that is dedicated to a specific cause, such as healthcare, education or ministry. Grants from the fund are distributed to nonprofit organizations that align with the fund’s focus area.
• Split-Interest Gift: A charitable gift that divides interests between a charity and the donor or their designated beneficiaries
• Supporting Organization: A type of public charity that exists to support one or more specified public charities. The most common form of supporting organization involves a parent-subsidiary relationship, where the subsidiary organization exists to benefit and carry out the purposes of the parent charity. Since the parent controls the subsidiary, and the subsidiary exists to benefit the parent, a gift to the subsidiary supporting organization is eligible for the same favorable income tax deductions as a gift to the parent public charity.

What’s Next?

That’s a wrap on today’s lesson. In our next post, we’ll explore gifts of noncash assets, such as retirement plans, securities, tangible property, life insurance or virtual currency. Curious how cryptocurrency fits into charitable giving? We’ll cover that too. These strategies help donors maximize the full value of their assets, often allowing for larger gifts and greater tax efficiency.

While this glossary is a great starting point, charitable gift planning is deeply personal. Our trust and legal team is here to help tailor strategies that align with your values, financial goals and philanthropic vision.

To learn more, visit highgroundadvisors.org/gift-planning or contact us directly at 214.978.3300 or trust@highgroundadvisors.org.

Interested in learning more about charitable giving tools? Check out these past blogs:

CRATs & CLUTs & DAFs...oh my!
Four Tax Strategies to Maximize Your Giving