For many donors, generosity doesn’t end with a single gift—it becomes a legacy. 

In recent years, more individuals have looked for simple, meaningful ways to extend their charitable impact beyond their lifetime. One of the most effective tools is also among the

easiest: naming a nonprofit organization as a beneficiary of a retirement account or life insurance policy. 

At SOAR Partners, we’ve seen how these thoughtful designations create long-term sustainability for nonprofit missions—often without reducing the donor’s lifetime resources. Below, we outline how this works, what options exist, and how nonprofits can begin the conversation. 

1. Adding a Nonprofit as a Beneficiary 

Designating a nonprofit as a primary, secondary, or percentage-based beneficiary is a straightforward process. Donors simply complete or update a beneficiary-designation form with their plan administrator or insurance carrier. The flexibility of these forms allows individuals to allocate specific percentages—for example, 70 percent to family members and 30 percent to a favorite charity (Mission Wealth, 2024). 

When a qualified charity is listed as a beneficiary of a retirement account, such as an IRA or 401(k), the gift can be particularly tax-efficient: unlike individual heirs, charities do not pay income tax on distributions from these accounts (Fulton Bank, 2024). This means more of the donor’s hard-earned assets directly advance the mission they care about. 

2. Life-Insurance Policies: A Hidden Asset for Good 

Life-insurance policies—especially those that are “paid-up” or no longer needed for family protection—represent another powerful giving opportunity. 

Donors can: 

Name a nonprofit as the beneficiary of an existing policy (for all or part of the death benefit). 

Transfer ownership of a permanent policy to a nonprofit, allowing the organization to become both owner and beneficiary. 

Donate a “paid-up” policy, which provides an immediate charitable gift without further premium payments. 

According to St. Jude Children’s Research Hospital, “Both term and permanent life-insurance policies can be donated to a charity—you can change the owner of the policy, name a charity as beneficiary, or add a charitable-giving rider” (StJude.org, 2024). 

Similarly, Bankers Life notes that a charity “can receive life-insurance policies as gifts, can be named a beneficiary, and even can be allotted a percentage of a death benefit” (BankersLife.com, 2024). These flexible arrangements allow donors to make a lasting contribution—often larger than would be possible through cash gifts alone.

3. Advantages for Donors and Nonprofits 

For donors, naming a nonprofit as beneficiary is: 

Simple: No need to revise an entire estate plan—just update the beneficiary form. 

Tax-smart: Charitable beneficiaries generally receive assets without income tax liability. 

Flexible: Percentages can be changed at any time, adapting to life changes. 

For nonprofits, these planned gifts are transformative. They provide future revenue that supports strategic initiatives, endowments, and long-term stability. Nonprofits that communicate these options clearly—and steward relationships over time—often see significant growth in planned gifts. 

4. How Nonprofits Can Encourage Beneficiary Giving 

Nonprofits can play an active role in helping supporters understand these opportunities. Consider: 

Including “Consider naming our organization as a beneficiary of your IRA, 401(k), or life-insurance policy” in planned-giving materials. 

Providing clear legal name and tax-ID information to simplify the process for donors. 

Hosting short educational sessions with estate-planning professionals or financial advisors. 

Expressing gratitude to donors who have already made such commitments— recognition matters. 

The Community Foundation emphasizes that donors may “designate a percentage of a total policy death benefit or a specific amount,” making it easy to include multiple beneficiaries, both individual and charitable (The Community Foundation, 2024). 

5. A Legacy of Purpose 

Including a nonprofit as a beneficiary is one of the simplest yet most profound ways to make a lasting impact. It turns personal values into future action—ensuring that meaningful causes continue to thrive for generations. 

At SOAR Partners, we help nonprofits strengthen their fundraising infrastructure so they can steward these types of gifts with transparency, compliance, and gratitude. Together, we can transform planned giving into purposeful giving—building stronger communities one legacy at a time.