Family Foundations Converting to Donor Advised Funds
More and more people engaged in charitable giving through private foundations are choosing to open "Donor Advised Funds" rather than continuing to manage their own private foundations.
"Frustrated by the upkeep, philanthropists are increasingly unwinding their private foundations into donor advised funds, which invest assets and make grants to charities from individual accounts based largely on the donors' recommendations," wrote Mike Spector in his article, "Family Charities Shift Assets to Donor Funds," that recently appeared in The Wall Street Journal.
At the East Bay Community Foundation, we not only take care of all of the donor advised fund's administrative and investment needs, but we also provide consulting and advice on community needs and effective non-profit organizations, thus ensuring that our fund holders' grants get results that meet their philanthropic goals.
Operation of a private foundation includes annual tax filings, maintenance of a functioning board of directors, investment and oversight of assets, and cutting and delivering grant checks - not to mention performing due diligence on all grants made from the foundation.
We do all of that for the more than 400 donor advised funds under our umbrella.
Donor Advised Funds are easier and less expensive to establish than a private foundation and are subject to fewer restrictions and regulations. An individual, family, business or civic group can create one. Grants can be made anytime online or with Foundation staff assistance. We take care of all the paperwork and required reporting. Gifts of appreciated assets qualify for tax deductions based on fair market value and avoid capital-gains taxes. Donor advised funds can accept gifts of many different types of assets, including real estate and shares of closely-held stock. And...you can add to the fund at any time, receiving tax benefits with each new gift.
For more information, contact Sara DuBois at (510) 208-0817 or sdubois@eastbaycf.org.
back to top |
Tough Times: Can't Give Now?
When your client wants to be philanthropic, but is reluctant to give now, what can you do?
You can encourage your client to make a commitment now that kicks in later through a testamentary fund. A testamentary fund is a means to guarantee the client's charitable intentions are fulfilled after passing on.
It can be established with a gift from an estate, either immediately by a bequest or after a period of time through a planned gift. The Foundation works with you and your client to write a fund agreement that describes how the client wants the fund to operate. The client keeps a copy of the agreement with estate documents and the fund at the Foundation is included in the estate plan. We keep a copy in order to plan for and execute your client's wishes precisely.
Your client may create a fund that a spouse, partner, children or grandchildren can advise. It can support the charities supported during the client's lifetime. It can be a scholarship fund -- or any kind of fund. As time goes by, your client may change the fund if her or his interests change, and as long as the fund's name isn't changed, there are no changes required in estate planning documents.
The important benefit your client secures by entering into this kind of arrangement with the East Bay Community Foundation - as opposed to doing so with other institutions or specialists - is that we don't operate a business aimed at accumulating wealth. Our mission is effective philanthropic giving so a client's wishes and dreams are fulfilled. When your client opens a testamentary fund with us, she or he will have the peace of mind that their intentions become our intentions.
Charitable trusts established at other institutions can be transferred to the East Bay Community Foundation. For information on the benefits of such a transfer, click here.
back to top |
Couples Shun Gifts, Instead Choosing "Wedding Funds"
Marketing entrepreneur Christina Klein and her husband, former Oakland Schools administrator Eric Nelson, clearly stated from the beginning they would give away their wedding gifts - and now they're actually doing it.
But the gifts they're giving away are not the kind you normally see at weddings or commitment ceremonies. These gifts aren't crystal, flatware, toasters and the like. They are contributions to Klein's and Nelson's "charitable wedding fund" at the East Bay Community Foundation.
The efforts of Klein and Nelson are part of a heartfelt trend in which couples combine wedding or commitment ceremonies with philanthropy, starting their married lives together by doing good.
"The idea behind this," said Nelson, "is to give kids in the fourth to eighth grades the chance to connect with the arts in the way we did. We chose that age range because it is a very confusing time in one's life--with endless peer pressure, insecurities, and hormones--and kids may begin to contemplate dropping out of school, which we all know intensely impacts a person's future life choices. We hope this is the connection that they need at this fragile time."
Nelson's and Klein's story reflects a growing trend around the U.S., in which couples choose to focus their ceremony less on what they get and more on what they give. A number of these couples seek assistance from third parties, such as the East Bay Community Foundation, to help them make their dream come true.
Since 2005, the Foundation has assisted five couples to set up such funds.
back to top
Obama's Charitable-Deduction Limits
According to news reports, President Obama isn't backing away from his plan to limit federal tax breaks the affluent can reap for charitable deductions, despite fears it could dampen charitable giving.
The proposal would limit the tax break for itemized deductions to 28 cents for every dollar spent for individuals earning more than $200,000 and for couples earning more than $250,000, kicking off in 2011. The current system allows taxpayers in the highest brackets to get up to a 35-cent deduction.
The idea is that the plan would help to raise money to revamp the health-care system and for that reason -- despite the fact that some in the non-profit sector don't like the idea -- others in the sector are supporting it.
back to top |
|
Along with Delta Memorial Hospital Foundation and the Los Medanos College Foundation, we're co-sponsoring a workshop for professional advisors on working with clients who are experiencing grief.
The workshop will be held Thursday, June 25 from 8:30-11:30 am in the Education Room at Sutter Delta Medical Center, 3901 Lone Tree Way in Antioch.
The speaker is Judy Barber, a consultant and mediator. She helps clients resolve "the overlap between family and money matters, so families can make sound, financial, succession and estate planning decisions."
She's a licensed marriage and family therapist and a founding member of the American Bar Association Committee on Psychological and Emotional Issues of Estate and Financial Planning.
To register, contact Wendy Kitt at 925.779.3575 or at kittw@sutterhealth.org.
back to top |
Mark Your Calendar: Sept. 15 Seminar on Charitable Lead Trusts
On Tuesday, September 15, EBCF and Children's Hospital Research Center Foundation will present a three-part seminar - from 2:00 to 5:30 pm - on "Charitable Lead Trusts" at our James Irvine Foundation Conference Center, 353 Frank Ogawa Plaza in Oakland.
The continuing and difficult recession presents an opportunity for some wealthy people to set up a "Charitable Lead Trust" to seed favorite charities, pass money to heirs, and shelter potential growth from taxes. A variety of assets can be transferred into a Charitable Lead Trust, payments from which can go to a designated charity or charities. After the trust's term expires, what's left goes to heirs.
Part One on fundamentals of and case studies relating to Charitable Lead Trusts will be presented by Robert Lew of Planning & Financial Advisors. Part Two on dissecting IRS Charitable Lead Trust forms will be presented by Erik Dryburgh, Principal at Adler & Colvin. Part Three on explaining Charitable Lead Trusts to clients will be a panel discussion with Douglas Bohne of the Bohne Law Group, Jill Dodd of Manatt, Phelps & Phillips, and Paula Leibovitz of Leibovitz Law Group.
To register, contact Sara Tarano at 510.208.0819 or at starano@eastbaycf.org.
The session is sponsored by Mechanics Bank Wealth Management.
back to top
A Fond Farewell, Sara
It pains us to note that our Director of Development, Sara DuBois, who has worked closely with professional advisors during her four years at the East Bay Community Foundation, is leaving the Foundation at the end of this month.
It gives us great pleasure to note the reason: She's having a baby, and plans to spend a couple of years as a full-time mom.
As we smile on the outside and lament on the inside, it must be noted that Sara was and is a pro from start to finish. No one at the Foundation has a "can do" attitude that beats hers. And no one has been more productive.
Her shoes will be most difficult to fill. We're in the process of identifying her successor.
back to top
|