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Give
to the Community Trust -- the Community Foundation's
most flexible fund
( top of page )
Scenario:
During and after your lifetime you want your charitable
giving to accomplish the most for the county's quality
of life, and you recognize that needs can change.
You believe that a group of living men and women
will always be better able to assess current situations
than any written document from the past, no matter
how perceptive.
Solution:
You make a gift to the Community
Trust during your lifetime or by will. Year
after year the entire responsibility for selecting
the most appropriate grantees rests on our dedicated
Grants Committee and Board of Trustees. Grants may
be made in any of the Foundation's major areas of
philanthropy: health and human services, education,
environment, the arts, and civic. Such an all-purpose
fund is the most flexible in responding to emerging
charitable needs.
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Field of
Interest Fund (
top of page )
Scenario:
You want to do some good in a particular field but
you do not want to commit your money to just one
organization, since time changes all things. Or
you want to do some good in a particular geographic
locale.
Solution:
You contribute to an existing Field of Interest
fund or you set up Your Fund with us as a
field of interest fund, describing this field
as broadly or as narrowly as you wish. Using our
experienced staff and consultants, we will regularly
identify appropriate grantees. If the fund is operating
during your lifetime, you will receive periodic
reports on the positive impact of your philanthropy.
- Designated
Fund for One or More Organization(s)
( top of
page )
Scenario:
You have been supporting one or more favorite charities
with annual gifts. You would like to have this support
continue after your lifetime. You are planning a
new will and you could leave each charity a substantial
bequest, but the fact of your thoughtfulness might
soon be forgotten, and besides, you are not sure
each charity will always be around.
Solution:
You set up Your Fund with us, and in your will you
provide a bequest to the Fund. You ask us to send
the income to your favorite charities, specifying
the amounts or percentages of each. Donations are
sent yearly to the named charities. If one of the
organizations ceases to operate or provide the type
of services that interested you, we will keep your
gift fresh and vital by finding another organization
with a similar focus.
Please note that you could
also contribute to your designated fund during your
lifetime and ask us to handle the grant-making chores
on your behalf.
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Combination
of Fund Types
( top of page
)
Scenario:
You have a number of charitable interests; your
list of recipients keeps changing each year, with
a few organizations always listed and the rest being
different. You puzzle over how to have this pattern
continued after your lifetime.
Solution:
You set up Your Fund with us and fund it during
your lifetime, or in your will you provide a bequest
to the fund. You ask us to divide up a portion of
the fund's income each year--say, a third or a half--among
your continuing favorite charities. For the balance,
you specify your field or fields
of interest: for example, handicapped children,
aid to the elderly, education or recreation. We
select grantees to whom grants from your fund can
make a meaningful difference.
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Donor
Advised Endowed Fund (
top of page )
Scenario:
You would like the advantages of establishing a
fund with us now, and you want to be able to recommend
which charities should be supported. Or you would
like to set up a fund in your will, but you want
your family to continue making grant recommendations.
Solution:
You set up Your Fund with us as
a
donor advised endowed fund. Your contributions
to the fund qualify fully for tax deductibility
in the year in which each is made. You, or you and
an advisory committee named by you, give us your
recommendations on distributions (typically on an
annual basis).
You can also set up an
advised fund in your will, naming the members of
your fund's advisory committee who will make recommendations
on distributions from Your Fund.
In either case, we check
the recommendations against the following standards:
the organization must be approved by the Internal
Revenue Service as a legitimate charitable agency;
the purpose of the grant must be charitable, and
the organization must be reviewed by our staff,
either individually or from publicly available documents,
and found deserving of support.
Donor-advisors need to
recognize that the IRS requires that the final decision
about distributions from donor advised funds is
in the hands of our Board of Trustees. However,
we welcome advice from donors, and others, and our
staff is available to assist with the identification
of worthy grant recipients.
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Donor
Advised Gift Fund (
top of page )
Scenario:
You would like to establish a fund at the Foundation,
but, as a more active giver, you aren't interested
in an endowed model. You see the need in the community
and want to have an impact right away. Or you have
a year in which a charitable contribution might
be beneficial for your tax return, but you don't
have time to give appropriate consideration right
now to what nonprofit groups you would like to support.
Solution:
You set up a fund with us as a donor advised gift
fund. As with a donor advised endowed fund, donors
and designated advisory committee or family members
may make distribution requests from this fund. In
a gift fund, however, the donors may distribute
as much or as little from the fund as they wish
-- including spending it down to a zero balance.
The full amount of the gift into the fund is tax
deductible immediately, but donors may make grant
recommendations within a time line that fits into
their own schedules.
As with a donor advised endowed fund, the IRS
requires that the final decision about distributions
from donor advised funds reside with our Board of
Trustees. However, we do welcome recommendations
from donors.
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Donor
Advised Impact Fund (
top of page )
Scenario:
You would like to establish a fund with the Foundation
and you would like to see the fund grow over time,
but you want to donate more to your favorite organizations
than is recommended for a Donor Advised Endowed
Fund.
Solution: The Donor
Advised Impact Fund offers a unique alternative
to the previous two funds. Like an Endowed Fund,
the Impact Fund is invested in The Community Foundation's
investment pool allowing the principal to grow over
time. You may request that up to 20% of the fund
be granted each year–increasing grant amounts
to organizations you wish to immediately help.
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Supporting
Organization ( top
of page )
Scenario:
You are the trustee of a private foundation, and
you want to make a gift to enlarge the foundation's
assets. But tax law discourages such gifts by according
them less deductibility than gifts to public charities.
Solution:
A family may establish a supporting organization
within the community foundation. A supporting organization
is a separate corporation or trust that is operated
in conjunction with a public charity such as a community
foundation. For tax purposes, a supporting organization
has the advantage of being treated as a public charity
rather than as a private foundation because it is
related to the community foundation. A donor or
a group of family members typically appoint a number
of the board members of the supporting organization.
The community foundation assists with grant-making
and administrative duties and typically appoints
board members as well. While supporting organizations
can have separate investment policies and strategies,
they can also can pool their assets with the community
foundation's funds to achieve investment efficiencies.
Although a supporting organization is not completely
independent, it provides significant administrative
and financial advantages for a donor not available
through a private foundation.
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Memorial
Fund ( top
of page )
Scenario:
You and your friends are saddened to hear of the
death of a dear and valued friend, or a family member
has passed away. Couldn't something be done to preserve
his or her memory and the good that flowed from
his or her life?
Solution:
You set up a fund at the Community Foundation in
the name of your late friend or relative. You ask
other friends and corporations who knew that person
to contribute to the fund. You dedicate the purpose
of the fund to a field of interest important to
your friend. It becomes a
permanent living memorial that will be meaningful
for years.
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Award
Fund ( top
of page )
Scenario:
Instead of scholarships, you would like your money
used for a series of awards recognizing outstanding
achievement, merit or contributions in the area
of public service. Awards can be very meaningful
to the recipients, especially when carefully planned
and conducted.
Solution:
You set up Your Fund and ask us to conduct an
award program in your name with the income.
If you have specific ideas about the nature of the
award, you tell us. There are various options for
administrative support of the program.
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Administrative
Fund ( top
of page )
Scenario:
You want to help with the ongoing work of The Community
Foundation.
Solution:
You can give directly to the foundation's
Administrative Endowment or establish a separate
endowed fund of The Community Foundation. The Administrative
Endowment is used to offset the Foundation's operating
costs, thereby maximizing grants payout.
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Cash
( top of page
)
Scenario:
You prefer to make your charitable gifts with cash.
You write out a check and that's that. It's simple
and straightforward and everybody likes it. Is there
a better way?
Solution:
Here's one. You establish a Donor Advised Fund --
Endowed, Gift, or Impact Fund-- with us and you
write out a check to it whenever you can afford
to. The fund grows. Some years you can afford more,
some less. You get a full tax deduction for each
gift in the year you make it. You request that we
periodically pay out to nonprofits your recommend.
The fund has great flexibility and gives you immediate
and maximum tax deductibility.
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Marketable
Securities (
top of page )
Scenario:
In this case, you have discovered that you can give
more, and at less cost to you, than by giving cash.
That is, with appreciated securities, stocks or
bonds that are now worth more than when you bought
them (or received them). If you were to simply sell
them, you would have to pay capital gains tax. And
trying to divide them among many charities is an
endless nuisance.
Solution:
You give the securities to Your Fund. You get the
maximum allowable tax deduction for their full market
value and may be able to spread the deduction over
more than one year. The charities that are supported
by your gift will each receive cash. So everyone
benefits.
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Charitable
Bequests ( top
of page )
Scenario:
You are making decisions on a new will. You have
taken care of all the usual details, assigned sentimental
possessions, and provided for relatives. You decide
that you would like to help make the world a better
place for your having been here. You
want to make a legacy gift.
Solution:
You provide that all the remaining assets go to
Your Fund, significantly reducing the taxes otherwise
payable by your estate. The fund continues doing
good work in your name permanently, a living symbol
of your caring.
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Life
Insurance (
top of page )
Scenario:
You have been paying premiums on life insurance
for years and now the protection it offered earlier
is no longer needed. The policies have some value
and you would like charity to benefit.
Solution:
You donate the policies to The Community Foundation.
You get an immediate tax deduction now, usually
in an amount equal to their cash surrender value.
Either your fund or a Foundation fund grows and
community needs are met in your name.
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Other
Assets ( top
of page )
Scenario:
You have other kinds of asset and you wonder if
they can be used to fuel your fund.
Solution:
Almost any asset can be contributed to create a
fund in The Community Foundation. Community foundations
have been successful in creating funds with closely-held
stock, real estate (including farm land), interests
in limited partnerships, literature copyrights,
motion pictures (including television rights), boats
and other kinds of property, or any combination.
People today have a wide variety of assets, and
we try to be helpful in putting as many of them
as possible to charitable use.
We will be glad to discuss
proposed gifts with you. Those assets which cannot
be readily converted or which carry unusual potential
liability may not be accepted.
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Assignment
of Trust Fund Income (
top of page )
Scenario:
You are the beneficiary of a trust. You receive
income from it regularly and you pay income tax
on the full amount. You are giving part of the income
each year to charity but this does not reduce your
tax liability very much.
Solution:
You decide how much of this annual income you want
to give to charity each year. You assign this portion
to Your Fund. You pay no tax at all on this income
and in addition you may receive a substantial deduction
at the time of the assignment. Both you and the
community benefit.
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Gifts
from an Estate or Trust (
top of page )
Scenario:
You are the Executor or Trustee under a will. The
will says you are to allocate a certain amount of
money to charity, but either the organizations and
amounts are not named or carrying out the charitable
provisions is too burdensome for you as Executor
or Trustee.
Solution:
You set up a fund in The Community Foundation in
the name of the person who died. We are capable
of handling complex bequests to charity. With the
approval of the court, if necessary, you arrange
to have the charitable portion of the estate paid
to the fund. We would then assume the burden of
carrying out its charitable provisions.
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Life
Income, Fixed Amount (
top of page )
Scenario:
You find yourself in your older years with a fairly
comfortable accumulation of assets. Not extremely
wealthy, but comfortable, you would like an assured
income for you and your spouse for the rest of your
lives. You figure out just the amount you will want
each year. You want charity to benefit after both
your lifetimes.
Solution:
You establish a type of charitable remainder trust
called an Annuity Trust, with the remainder going
to Your Fund. You get a healthy tax deduction which
may reduce your income taxes in more than one year.
You and your spouse, and/or other beneficiaries,
will receive an income for life, in the same amount
each year. When either of you dies, the survivor
will get the income. Your estate taxes will be reduced
and the community will benefit by the remainder,
which becomes a permanent charitable fund in your
name.
If you prefer, you can do
this in your will, providing a life income for your
surviving spouse. Because of the charitable deduction,
the surviving spouse may actually receive a larger
income than would otherwise be the case.
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Life
Income, Variable Amount (
top of page )
Scenario:
You are in the same situation as the last example
but you are worried about inflation. A fixed income
might buy less and less. You'd like a chance to
have the income grow over the years.
Solution:
In setting up Your Fund, you arrange for a type
of charitable remainder trust called a Unitrust.
You specify that you want a percentage, instead
of a fixed amount, of the Fund's assets (e.g., five
percent) revalued each year paid to you or your
spouse or other beneficiary. If the assets fluctuate
in value, your income would correspondingly fluctuate.
The tax advantages are the same as with the Annuity
Trust.
Again, this can be done
in your will, if you prefer, for your surviving
spouse.
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Q-TIP
Trust ( top
of page )
Scenario:
You wonder if there isn't an even more flexible
way to provide for your spouse's future. What if
your spouse might need more money than these other
methods provide?
Solution:
There is an alternative trust known as a qualified
terminable interest property (Q-TIP) trust with
a charitable remainder, which can be created during
your lifetime or by will. Your spouse must be given
the right to all of the income for life, and upon
his or her death the trust property can pass to
Your Fund.
A significant advantage
of the Q-TIP trust with a charitable remainder is
that the trustee may be given the power to invade
the trust's principal for the benefit of your spouse,
which is not true with a charitable remainder trust.
This can significantly increase the flexibility
of the trust to meet unexpected family needs.
The rules governing deductibility
of the Q-TIP trust with a charitable remainder for
income, gift and estate tax purposes should be discussed
with your tax advisor.
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Charitable
Lead Trust, or "Wait-A-While" Trust
( top of page
)
Scenario:
You are trying to plan what will happen to your
sizable estate. You can take good care of your children,
even though estate taxes will take a big bite out
of what you leave. But what about your grandchildren?
Will there be much left for them when more big tax
bites are taken out of your children's estates?
Solution:
You set up what is called a charitable lead trust.
You donate part of your estate to the trust now,
and the income goes to Your Name Fund for a designated
period of years. Your estate taxes are reduced and
the property is not taxed to your children. When
your grandchildren reach maturity, the trust terminates
and they receive the assets. The community benefits
during all those years, and your grandchildren receive
much more than they would otherwise.
Other
Ways We Can Help Each Other
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Transfer
Your Foundation into Ours (
top of page )
Scenario:
You are the trustee of a private foundation and
some of the fun has gone out of the job. Washington
lays down more and more rules about what you can
and can't do. The government requires detailed reports,
taxes part of the income, and worries you with threats
of personal liability. None of the trustees is getting
any younger. Sooner or later a better arrangement
has to be worked out.
Solution:
You establish a
fund in The Community Foundation, which can carry
the name of the private foundation. You arrange
to transfer all of the foundation's assets to the
fund and to dissolve the foundation. Suddenly things
are better. The identity and purposes of the original
donor are faithfully preserved, and family members
or their designees may continue to participate as
fund advisors. There is no more tax to pay. The
community benefits. We take care of all the paperwork
demanded by the government. Investment problems
are handled by our investment people. And there
is the satisfaction of knowing that a permanent
organization is in place to administer the fund
in the future.
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Partial
Transfer of Your Foundation's Income
( top of page )
Scenario:
Again, you are the trustee of a private foundation
but not all of your fellow trustees can agree on
transferring all of the foundation's assets to The
Community Foundation at this time. Is there a smaller
step you could take to try out the relationship
while you think about it?
Solution:
You set up a fund in The Community Foundation, which
can carry the name of the foundation. You arrange
for your foundation to direct part or all of the
current year's income to this new fund. The trustees
get to know our organization. This arrangement,
if mutually desirable, can go on indefinitely until
the trustees are ready to take full advantage of
The Community Foundation's services.
- How We Can Help Corporations
( top of
page )
Scenario:
You are an executive in a large corporation responsible
in part for corporate giving. Part of the job is
easy: support the standard charities, support charities
in plant cities, give to projects the top officers
are involved in. But what about that blizzard of
appeals you get from all the other charities? Who's
going to sift through all of them and make some
sense out of a giving program?
Solution:
You set up a fund at the Foundation, either with
the name of the corporation or a simple anonymous
name. You divide the corporate
giving into two parts. One part is to cover
those things you know you must give to. The other
part is discretionary and you transfer that to the
fund you have established here. Then our staff develops,
implements and executes a giving program that will
give full credit to the corporation, credit for
caring about the needs of the community.
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How
We Can Help Business Owners (
top of page )
Scenario:
You are a businessperson who has built your own
business to a very respectable size. On paper you
are quite well-to-do. You own most or all of the
stock in your corporation; earnings are good, capital
gains on the stock are large. You would like to
begin sharing with charitable institutions some
of the wealth you have created.
Solution:
You set up YourFund with The Community Foundation.
If the stock is publicly traded, you transfer a
block of it to the fund. If the stock is not publicly
traded, you discuss the matter in advance with us
so that we can determine how the assets can be accepted
and the fund becomes the vehicle for carrying out
your charitable desires.
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How We Can
Help Nonprofit Organizations Manage Their Endowments
( top of
page )
Scenario:
You are on the Board of Directors of a charitable
organization that needs to develop or better manage
a permanent endowment.
Solution:
You transfer your
agency's endowment to The Community Foundation.
Because the larger total value of our assets enables
us to diversify our investments more readily than
agencies with smaller endowments, you get an opportunity
to maximize total return. Investment charges against
your fund are reduced. A buffer is provided between
your agency and its endowment, reducing the temptation
to invade principal in a crisis. Your agency staff
is relieved of the internal accounting and reporting
entailed in managing the endowment. The nonprofit
receives annual distributions for unrestricted use.
- How We Can Help Nonprofit
Organizations that Are Closing their Doors
( top of
page )
Scenario:
You are on the Board of Directors of a charitable
organization with a problem. The service the organization
offers is no longer economically viable. Costs are
out-running income, and there is little prospect
for relief. It would be logical to close the agency
but there are still some assets, perhaps a building,
perhaps some restricted funds. Your Board is still
interested in that particular field of service.
Solution:
You create a fund with us, which can carry the name
of your organization. You apply to the courts for
permission to liquidate the assets and transfer
them to the fund. You specify that grants will be
used only for that particular field of service.
The mission of your organization is thereby continued
in the years ahead, but the administration is done
by The Community Foundation.
