11.30.17

Higher market returns propel the power of philanthropy

By Jennifer Kilpatrick
CFO, Community Foundation Boulder County
and
Daniel Hassan 
Chair, Investment Committee, Community Foundation Board of Trustees 
Managing Partner, Boulder Capital
 

According to The Wall Street Journal, assets in Donor-Advised Funds (DAFs) have shot up due to a sharp increase in user contributions and stock-market gains. Indeed, while the past is never a predictor of the future, markets have been performing well, and the world economy is mostly headed in the right direction. Across the planet, Gross Domestic Product (GDP) has seen steady growth since the global financial crisis of 2008.

 
Closer to home here at the foundation, we aim to generate a 5% return on our funds. Of late, we’ve shown returns closer to 10% across all investment pools. As such, if you have a fund with the Community Foundation, your expected returns have been effectively doubled which, in turn, means more philanthropy. 
 
Or does it?
 
With favorable financial conditions at play, the S&P 500 has spiked roughly 15% this year. That would seem to indicate that more people have more money to give. However, according to our recently released TRENDS Report, Colorado bears the dubious distinction of the lowest giving ratio among surrounding Western states. Drilling down further – despite a median income that’s significantly higher than state and national averages – Boulder County’s giving ratio (i.e., charitable contributions to adjusted gross income) is also low, ranking 44th out of 64 Colorado counties.
 
To match the needs of our community, it’s up to all of us who love living here to synch higher investment returns with tax-free giving. Specifically, we hear from financial advisors again and again that one of the easiest, most common, and most impactful ways to give to our community is to establish a Donor-Advised Fund with your Community Foundation that you advise, or that’s managed by an advisor of your choice. And when you create a DAF with gift stock or appreciated stock, for example, you’ll avoid paying taxes on any unrealized gains. 
 
The Community Foundation offers a number of options for fundholders who want to make a difference – from a low-cost, passive investment option to an actively-managed pool, a Socially Responsive Investment (SRI) pool, a cash-only pool, and combinations thereof. 
 
Other ways to make a difference include supporting the impactful work of the Community Foundation, countywide; supporting our operations so we can continue to fulfill our mission on behalf of everyone who calls Boulder County home; or creating a legacy for future generations. We accept cash, checks, credit cards, tangible personal property, real estate, publicly-traded securities or mutual funds, business interests (including closely held stock), and more. 
 
As we look forward to continuing favorable conditions for sustained higher market returns, we also encourage greater giving – because we can make a bigger impact in our community when we all invest in each other. 
 
For more information about giving options and opportunities with the Community Foundation, browse our Giving FAQ, or get in touch with our Philanthropic Services team.