Dear Friend of the East Bay Community Foundation,
Dear Friend of the East Bay Community Foundation -
Once again, we are in the fourth quarter of the year. This is the season when most charitable giving takes place, and that means we will be working a great deal with individuals, families, and organizations with their eyes on engaging in charitable giving before the end of the calendar year.
We are excited by the opportunities to hear about and help address the philanthropic goals of so many Easy Bay residents who have a wonderful tradition of giving back to their communities.
As it turns out, many of the items in this edition of our newsletter just happen to focus on meeting and exceeding clients' expectations.
10 Big Ideas to help clients give seriously. Helping clients make a difference and achieve impact. Donors who want professional help with their philanthropy. Clients who have uncommon needs.
For the first time, we have a guest writer and the topic is the charitable lead trust. We'll periodically invite guest writers to contribute in the future with the hope you find their voices thought provoking and useful.
Kindest regards,
Nicole Taylor
President & CEO
10 Big Ideas to Help Clients Give Smartly
Philanthropy's Cutting Edge" is an article from AdvisorOne, (a website featuring news, in-depth analysis, market data, tools and networking opportunities for professional advisors) on innovative concepts advisors can use to "help clients give intelligently." It describes 10 ideas, and our team can work with you and your clients on any of these:
- Re-thinking the Private Foundation
- Donor Advised Funds
- Gifting a life insurance policy to a non-profit organization
- Impact Giving
- Funder Collaboration
- Giving Circles (philanthropic investment clubs)
- For Perpetuity or Not?
- Philanthropic Spending Policies
- The Right Amount of Annual Giving
- Charitable Lead Trusts
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How to Make a Difference
Those wanting to be engaged in philanthropy often ask themselves, "How can I ensure my giving has impact?"
We, as an organization, asked ourselves that question more than three years ago. As a result, we developed a strategy focusing on advancing economic opportunity for those most in need and helping children succeed in the education system so they have economic opportunity when they become adults.
The goal: economically healthy communities consisting of individuals with education and skills to qualify for jobs that sustain them and their families.
Three years on, we are beginning to see real impact.
As a result of $1.5 million in grants we've made to these two related causes and $4.7 million of grants we've leveraged from other sources, 7,000 individuals with barriers to employment successfully completed a job program. And, over 4,900 children and their families were helped along the path to literacy by third grade, which is a key marker for overall success in the education system.
We now know this turf so well that we've chosen to work with 21 organizations in Alameda and Contra Costa counties that get results advancing economic opportunity and the education that leads to it. To learn more about our work supporting these organizations, click here.
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High Net Worth Donors Want Professional Help
It's no surprise to us that the "2010 Study of High Net Worth Philanthropy" sponsored by Bank of America Merrill Lynch concludes that donors are increasing their use of professionals "to help them make charitable giving decisions."
This continuing trend was observed in earlier versions of the same study conducted in 2006 and 2008.
Legal and financial professionals who, in turn, have called on our expertise to help them with their clients over the years have discovered two truths:
We know how to help them have discussions with their clients about giving. And we know how to help ensure philanthropic dollars have the best impact possible.
When a local family foundation came to us with an interest in children's literacy, for example, we helped establish a literacy initiative in the City of Richmond that has provided 49 classrooms with 1,470 books. This effort touches 53 teachers and about 1,200 kindergarten students. In addition, more than 330 parents and caregivers have participated in reading workshops in which they learn how to teach their children to read -- and they receive books to take home. Together, with this family foundation, we are creating lasting impact in the lives of hundreds of families.
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Clients with Uncommon Needs
When former Golden State Warriors basketball star Adonal Foyle and his Kerosene Lamp Foundation wanted to organize a camp in the East Bay that would teach under-served kids basketball, financial literacy, art, nutrition, health, and computer skills, he came to the East Bay Community Foundation.
Our Public & Private Partnerships specialists worked with him to find a community partner to host the camp and to line up organizations in the philanthropic and business sectors to provide in-kind support to ensure the camp -- held at the East Oakland Youth Development Center Aug. 8-10 -- was a success.
We did more. We also performed the public relations work necessary to gain attention to the camps from the press.
That's how we work with our clients: customized services to fill uncommon needs.
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Invitation: Workshop for Board Members of Non-Profit Organizations
"Growing Your Agency's Assets in Difficult Times" is a workshop on Oct. 26 and repeated on Oct. 28 for board members and staff of non-profit organizations that is aimed at honing fundraising skills.
Topics will include planning successful house parties, tips on grant writing, and getting donors to say "yes."
The Oct. 26 session will be held 2-5 pm with a reception following at the James Irvine Foundation Conference Center at the East Bay Community Foundation, 353 Frank H. Ogawa Plaza in Oakland.
The Oct. 28 session will be held 8-11:30 am at the Lafayette Library and Learning Center, 3491 Mt. Diablo Boulevard, Lafayette.
Contact Sascha Nieland at 510.208.0819 or at snieland@eastbaycf.org to register or for more information.
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The Charitable Lead Trust: Tool in Estate Planning and Charitable Giving
By Ward Pynn
wpynn@bbrcpa.com
Many people want to accomplish several goals with investments they have accumulated over the years. These goals include transferring their assets to younger family members, lessening or eliminating federal estate taxes and benefitting favorite charities. In a low-interest-rate environment, the charitable lead trust (CLT) can achieve these goals.
The CLT is largely the opposite of the better-known charitable remainder trust (CRT). The CRT provides an annuity or unitrust life-time or term-of-years income stream to the non-charitable beneficiary -- typically the donor -- and the remainder goes to the charitable organization. The donor receives a charitable contribution for the present value of the remainder interest in the year of donation.
In contrast, the CLT leads off with an annuity or unitrust payment to a charity for a term of years, a life, or lives, with the remainder passing to non-charitable beneficiaries, typically, members of the trustor's family. The present value of the remainder interest to the non-charitable remainderman constitutes a present gift for which a gift tax return should be filed.
To be effective, the returns on the trust's investments should exceed the current Section 7520 interest rate, which is used to determine the value of the annuity. Here is where the interest rate comes into play.
Jackie Kennedy Onassis and her advisors provided a road-map on how a charitably inclined person can use a CLT in an estate plan. After making numerous bequests of property and money, the remaining $170 million of her estate was placed in a CLT having a 24-year term. Using the then existing interest rates, the present value of the remainder interest was minimal. Family members and trusted advisors are the trustees. Preferred charities are the charitable beneficiaries.
Her then living grandchildren are the beneficiaries of the CLT. This will subject the trust to generation- skipping taxes upon distribution in 2018. The net effect of her planning is that only 11% of her $200 million estate was subject to taxes and expenses, while such an estate without any planning would ordinarily lose 58% in taxes and expenses.
See Susan Kuhn's article in Fortune, July 11, 1994, "Lessons from the Will of Jacqueline Kennedy Onassis," for an enlightening plain language discussion.
Space limitations preclude an in depth discussion here, but the tax practitioner and the interested taxpayer should consult their own tax and legal counsel for details.
The following are useful sources:
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More on Impact Investing
In the previous edition of this newsletter, we shared with you information about our new "impact investing" initiative that puts a portion of our investments to work simultaneously generating financial returns and making a positive impact on local communities.
We chose an investment vehicle through Community Capital Management, a privately held registered investment advisor whose primary goal is to invest in government-related subsectors of the bond market that produce above-average, risk-adjusted returns, while providing added diversification and generating a positive impact on the community and the environment.
The current edition of Community Capital Management's newsletter, "The Mission-Based Investor," focuses "on Northern California and its increasing participation in mission-related investments," including a Q&A interview with our Chief Financial & Operations Officer Ted Liebst about our own impact investing. To see it, click here.
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Conference Center with a Conscience
Looking for a venue for that special meeting or conference? Don't miss the James Irvine Foundation Conference Center at the East Bay Community Foundation.
For more information click here or email Chanda Eddens at ceddens@eastbaycf.org
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You Can Help: Economic Opportunity And Education Leading To It
As you know, we're here to help you with your clients who are in need of philanthropic advice and services.
We're also one of the largest funders of causes and needs here in the East Bay. Our focus is on advancing economic opportunity and the education that leads to it. And we can do it only with your support.
You can make an unrestricted contribution to the East Bay Community Foundation by going to our website at www.eastbaycf.org and clicking on Donate Now. |
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