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October 2024
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Every organization dreams of that game-changing, multi-million dollar endowment bequest that comes as a complete surprise. Often it can seem totally random when we hear about a donor who leaves a major gift to a charity in a will, trust, or beneficiary designation. And sometimes it is unexpected. But in many cases, the “surprise” should not have come as a surprise because it was the result of years of careful seed-planting and intentional relationship-building.
Of course, nonprofit fundraising professionals are well aware that cultivating small gifts can lead to large bequests. The question is, though, how can you give your organization the very best chance of receiving a gift like this? Not surprisingly, it all starts with small steps that add up to big steps. Intellectually, we understand this. But it can be so hard to be patient. Stick with it, though! Never give up on letting your donors know that any size gift makes a difference. Here are suggested messages you can use to encourage donors to consider making small gifts to your endowment fund: We want to help you support our organization’s endowment fund at a financial level that meets your charitable giving budget. At every level of giving, your endowment support is a catalyst for improving quality of life. Whether your gift to our endowment fund is a $250 credit card donation, a $2500 check, $25,000 worth of appreciated stock, or much more through a bequest or IRA beneficiary designation, you’re making a difference. We’re grateful for your support because it helps ensure that our organization’s mission stays strong for years to come. As you look ahead toward your year-end giving, you might be considering transferring highly-appreciated stock to your donor-advised fund at the Community Foundation. Remember that our organization’s endowment fund is held at the Community Foundation, too, making it very easy for you to use your donor-advised fund to support our endowment through year-end gifts of any amount. Consider that small donations from a large number of people can make a huge difference. Please help us spread the word! Forward our emails, share our posts on social media, and tell your family and friends that every dollar given to our organization’s endowment fund paves the way for a brighter future in our community. In so many ways, whether gifts are large or small or somewhere in between, philanthropy creates the margin of excellence that helps communities, families, and individuals thrive. The team at the Community Foundation is here to help you inspire your donors to support your endowment fund at every level. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. You and your team are certainly familiar with annual giving strategies to encourage donors to regularly support your operating budget. When it comes to endowment fundraising, though, many organizations tend to think about endowment campaigns as isolated events every few years, perhaps executed alongside a capital campaign.
As the fundraising environment gets tougher, especially in an election year, take a look at your approach to engaging donors in endowment giving on a regular basis, not just during the occasional campaign every few years. Indeed, national annual events like National Philanthropy Day and GivingTuesday create strong opportunities to engage your donors in endowment-focused conversations. The team at the Community Foundation is happy to offer ideas for ways to make regular, consistent giving to your endowment fund an attractive–and even habit-forming–practice among your donors. Whether a donor’s cadence of contributions is monthly, quarterly, semi-annually, or annually, the consistency delivers many benefits. Of course, your endowment will grow, which is a huge benefit. But your organization also will benefit from the communications and engagement opportunities. Here’s how:
Reach out anytime to the team at the Community Foundation. We’re happy to help you establish endowment-building strategies to ensure that your mission stays strong for generations. If your organization has not yet established an endowment fund at the Community Foundation, please reach out. There’s no better time than the present to begin paving the way for a bright future. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 2024 is rapidly drawing to a close! You’re likely making plans to send a letter to your donors asking them to consider making a gift as part of your annual appeal strategy. Don’t miss this opportunity to weave in messages about your endowment fund at the Community Foundation and how important it is for donors to support both current and future needs of your organization.
Here are a few tips and suggestions for crafting an annual appeal letter to inspire both current and endowment gifts. Cast a Wide Net Somewhere in your letter, be sure to illustrate the various ways donors can support your mission. For example, you could consider language like this: Our community is better because of donors like you who’ve included our organization in your philanthropy plans and charitable giving practices. Perhaps you give every year. Perhaps you’ve established a designated fund at the Community Foundation to support our organization. Or maybe you’ve already made arrangements for a major gift to our endowment fund at the Community Foundation. You might have even updated your estate plan to leave a bequest or IRA beneficiary designation to our endowment fund. Whatever way you’ve chosen to support our mission, we’re grateful! Offer Specifics Let donors know about a few of the very specific ways your organization has been making a difference. For example: Thanks to our donors’ generosity in building our endowment fund over the years, our organization was able to add two case managers to our team this year. This, in turn, means that we can ensure that nearly 50 additional children can receive the care they need. Donor support has also enabled us to provide our case managers with iPads, vastly increasing the efficiency of reports and communication, which in turn means we have more time to spend one-on-one with the children we serve. Tell Them Exactly What To Do A call to action is essential, of course, but make sure you offer options to make it as easy as possible for donors to make a gift. Offering options also shows that you are flexible and signals to donors that you’re open to a live conversation, which is the gold standard. Consider the following example: We’d be honored to receive your gift in whatever way works best for you. You can donate online at [include URL] or mail a check to the address below. And, importantly, we’d be happy to receive your gift of appreciated securities, which can be highly tax-advantageous. Please reach out today to talk about a potential stock gift. We work with the Community Foundation to make it easy and seamless for you to make a gift to our organization’s current programs, endowment fund, or both. For more ideas about how to engage donors through your annual appeal letter, please reach out! The team at the Community Foundation is honored to be your partner as you grow your endowment fund and expand your organization’s ability to serve our community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. By Revey Hertzler
Founded in 2018 by a group of dedicated individuals in Grand Forks, ND, Journey Home Animal Rescue has emerged as a beacon of hope for stray and unwanted animals in the region. This foster-based rescue organization was brought to life by four passionate animal advocates who had previously volunteered with various animal rescues. They identified a critical need for sanctuaries where animals could receive care and love before finding their forever homes. "Our goal was to offer a safe haven for stray and unwanted animals through foster homes," says Leslie Hagert-Rethemeier, one of Journey Home’s founders. "We ensure these animals are spayed and neutered, vaccinated, and cared for before rehoming them." The Vital Role of Foster Families Foster families provide temporary homes where animals can experience love, safety, and care. They play an important role in the wellbeing of rescued animals, helping them transition from a life of uncertainty to one filled with hope and stability. "Foster families are the heartbeat of the organization," Hagert-Rethemeier says. These families not only offer shelter but also help in socializing the animals and preparing them for adoption. They show the rescues kindness, security, and healthy interaction. Throughout their journey, the foster families document their experiences, capturing moments and writing bios for the Journey Home website to help potential adopters get to know the animals better. The Importance of Volunteers Journey Home Animal Rescue operates entirely with the help of volunteers. One of the most pressing issues is the sheer number of animals in need compared to the number of available helping hands. "The overwhelming number of unwanted and stray animals in North Dakota is a major challenge," explains Hagert-Rethemeier. Despite these hurdles, Journey Home remains committed to its mission, continually seeking innovative methods to recruit more volunteers and expand their reach. Volunteers are recruited through various channels, including word of mouth, social media, and local events. "We have about 10 different programs that are always recruiting new support," Hagert-Rethemeier says. The dog walking program, for example, requires consistent attention, and while some volunteers are able to commit multiple shifts a week, the organization still faces challenges in filling all slots. Nevertheless, the volunteers' dedication ensures that the animals always receive the best care possible. Webster the Mastiff’s Touching Journey Since its start, Journey Home has positively impacted the lives of many animals in need. One particularly moving story is that of Webster, a Mastiff mix who came to the organization with a severe abdominal wound. The team quickly mobilized to secure the necessary funds and transportation for his surgery and recovery. Webster's journey from a rural pound to a loving foster home is a testament to the dedication and resourcefulness of Journey Home's volunteers. After his surgery and recovery in a medical foster home, Webster blossomed into a happy, playful dog under the care of Journey Home’s placement program, A Place Called Home. He was eventually adopted by a loving family, becoming a symbol of hope and resilience. Managing the Logistics Rescuing animals from across the region, and sometimes beyond, is no small feat. Often, Journey Home is contacted at the last minute with little information about the animals in need. The organization works closely with local law enforcement, animal pounds, and other rescue groups to coordinate these rescues. "It's really tough sometimes," admits Hagert-Rethemeier. "Our rescue coordinators evaluate which animals we can secure appropriate fosters for and then arrange volunteer transportation." The foster families open their hearts and homes to these animals, supplying them with all they need to recover and thrive. Their role in the rehabilitation process, helping animals overcome physical and emotional trauma, cannot be overstated. Although the logistics can be challenging, the outcome of the team’s effort is always worth it. Community Involvement From individuals to organizations, the involvement of the community in fostering has had a profound impact on the mission. Local businesses have supported Journey Home by hosting events that raise funds and awareness. "Many of our animals have been adopted by people who have come out to support us at community events," says Hagert-Rethemeier. These events also provide opportunities for fosters to connect with each other and the public, fostering a sense of community and shared purpose. The Crucial Role of Funding The establishment of an endowment fund with the Community Foundation has been pivotal in Journey Home's growth and sustainability. Initiated with the support of generous donors in November of 2023, the fund is on the brink of reaching the necessary amount to begin distributions. "We are very fortunate to have supporters that helped start the endowment fund," says Hagert-Rethemeier. "The Community Foundation has been wonderful in including Journey Home in their nonprofit features and other communications, providing us with a platform to grow and sustain our efforts." Looking Ahead Journey Home Animal Rescue aims to continue supporting and caring for unwanted animals in Grand Forks and surrounding communities, providing an adoption option for animals in North Dakota pounds that do not adopt out. The organization also plans to expand access to veterinary care and educate the community on responsible pet ownership. "We want to continue growing our volunteer base so we can reach more and help more," Hagert-Rethemeier says. One exciting initiative on the horizon is the expansion of their emergency rescue building, A Place Called Home, which has already provided a safe haven for over 225 animals, including Webster the Mastiff mix. The Road Home Journey Home Animal Rescue embodies the spirit of community and compassion. Their tireless efforts, supported by volunteers, local businesses, and the Community Foundation, have saved countless lives and given many animals a second chance and the experience of unconditional love. As they continue to grow and evolve, their commitment to making a difference in the lives of animals and people remains unwavering. "Journey Home Animal Rescue is a small and mighty team," Hagert-Rethemeier says. With passion and expertise, they accomplish incredible feats. But they are always looking for others to join their life-saving mission and further their impact on a community of animals in need. Aspiring volunteers can easily reach out through Journey Home's website, journeyhomeanimalrescue.org, where they can sign up for programs and offer their support. View Journey Home's 2023 report here. If you’ve been working with the Community Foundation for a while, you certainly know that it’s easy to make a contribution to your fund. And by now, you likely know not to automatically reach for your checkbook! The team at the Community Foundation is happy to work with you and your tax advisors to review the options for types of gifts. Here’s food for thought:
Marketable Securities Gifts of long-term appreciated stock to a donor-advised or other type of fund at the Community Foundation is always one of the most tax-savvy ways to support favorite charitable causes because capital gains tax can be avoided. Gifts of publicly-traded stock, for example, are easy to transfer to a fund. The Community Foundation team provides transfer instructions to make the process simple. As is the case with a cash gift, the Community Foundation will provide a receipt for tax purposes, and the gift of stock will be valued at the shares’ fair market value on the date of transfer. When the Community Foundation sells the shares, the proceeds flow into your fund without any reduction for capital gains taxes. This is because the Community Foundation is a 501(c)(3) charitable organization and therefore does not pay income tax. That would not have been the case, however, if you had sold the stock first and then transferred the proceeds to your fund; you would owe capital gains tax on the sale. Especially in cases where you have held the stock a long time and it’s gone up significantly in value, the capital gains hit can be big. Closely-Held Business Interests The Community Foundation team is happy to work with you and your advisors to explore how you might give shares of a closely-held business to a fund at the Community Foundation. Not only will transfers be eligible for a charitable deduction during the year of transfer (and at fair market value if the shares are held for more than one year), but also these gifts could potentially reduce income tax burdens triggered upon a future sale of the business. Be sure to talk with our team well before any potential sale is in the works; otherwise, you could lose out on tax benefits. Gifts of closely-held business interests are powerful but can be tricky to administer. QCDs from IRAs As always, keep in mind that the Qualified Charitable Distribution (“QCD”) is a very smart way to support charitable causes. If you are over 70 ½, you can direct up to $105,000 from your IRA to certain charities, including a field-of-interest, designated, unrestricted, or scholarship fund at the Community Foundation. If you are subject to the rules for Required Minimum Distributions (RMDs), QCDs count toward those RMDs. That means you avoid income tax on the funds distributed to charity. Plus, keep in mind that leaving your IRA to your fund through a beneficiary designation is a very tax savvy move, so be sure to discuss this option with our team and your tax advisors. Real Estate You can give a tax-deductible gift of real estate, such as farmland or commercial property, to your fund in a variety of ways. An outright gift is always an option; lifetime gifts of real estate held for more than one year are deductible for income tax purposes at 100% of the fair market value of the property on the date of the gift, which also avoids capital gains tax and reduces the value of your taxable estate. Other ways to give real estate include a bargain sale or a transfer to a charitable remainder trust which produces lifetime income for you and your family. Life Insurance Don’t overlook life insurance as an effective charitable giving tool, whether by naming your fund at the Community Foundation as the beneficiary or, in the case of whole life policies, naming the fund as beneficiary and transferring the policy itself. If you transfer a policy, you may be able to make annual, tax-deductible contributions to the Community Foundation to cover the premiums. Other “Alternative” Assets The Community Foundation is happy to discuss your options for giving other non-cash assets to your fund at the Community Foundation, including oil and gas interests, negotiable instruments, cryptocurrency, artwork, and collectibles. We look forward to working with you to explore all the options! The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation. It probably would not surprise you to learn that over 42% of Americans own an IRA. In many cases, IRAs–especially for people who have rolled over one or more employer retirement plans–represent a significant portion of a household’s net worth. When it comes to charitable planning, IRAs should never be ignored. Indeed, your IRA may offer some of the best opportunities to support the causes you care about.
For starters, no matter what your age, consider the benefits of changing the beneficiary designation on your IRA to name your fund at the Community Foundation as the recipient of all or a portion of the account. This is an easy, tax-effective way to leave a bequest to support the causes you care about. The Community Foundation can help you structure the terms of your fund to match your intended charitable legacy. For example, you can make arrangements for your children to serve as advisors on the fund to recommend grants to particular areas of interest, or the Community Foundation itself could deploy the money to support the community’s areas of greatest need or even the support foundation’s own mission-based operations. The reason an IRA beneficiary designation is such an ideal form of charitable bequest is because of the tax advantages. Dollars flowing to the Community Foundation from an IRA upon your death are not subject to estate tax. In addition, as a public charity, the Community Foundation does not pay income taxes on the IRA assets it receives. By contrast, if you were to name your children as beneficiaries of the IRA, those IRA distributions to the children are subject to income tax, which can be hefty given the tax treatment of inherited IRAs. Plus, the IRA assets would be included in your estate for estate tax purposes. Exploring ways to give your IRA to charity can also serve as a helpful reminder to review all of your beneficiary designations. Although they may appear to be innocuous and may even be easy to overlook, those beneficiary designation forms actually represent critical components of your estate plan. To understand this, you need look no further than the cautionary tale of a Procter & Gamble employee who died in 2015, leaving behind a retirement plan. Way back in 1987, the employee had named his girlfriend as the beneficiary of his retirement plan. Despite their relationship ending, the employee never updated the beneficiary designation. By the time the employee died, the retirement plan, which had grown to nearly $1 million, passed via the beneficiary designation to the 1980s ex-girlfriend. Finally, if you have reached the age of 70 ½, you can make what’s known as a Qualified Charitable Distribution (“QCD”) from your IRA directly to certain charities, including a designated fund or a field-of-interest fund at the Community Foundation–up to $105,000 per year per spouse. You won’t pay income tax on the distribution and, happily, if you’ve reached the age for Required Minimum Distributions, your QCDs count toward those distributions. The upshot? Next time you review your financial and estate plan with your advisor, take a close look at your IRAs. If you intend to leave a charitable legacy, or if you’d like to support your favorite organizations during your retirement years, your IRA may be your best bet to make a big difference in the causes you care about. The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation. As you’re looking ahead to year-end giving, you’re likely thinking about transferring cash, or ideally appreciated stock, to your donor-advised fund so that you can maximize tax benefits and support the charities you love. And absolutely, a donor-advised fund can be a fabulous component of your overall charitable giving portfolio.
Think beyond donor-advised funds, though, especially at year-end. The Community Foundation offers a wide variety of funds to meet your charitable giving goals and also help you maximize your tax and financial planning efforts. Two excellent fund types that are sometimes overlooked are designated funds and field of interest funds. When you set up a field of interest fund at the Community Foundation, you’re setting aside charitable dollars for a specific charitable purpose. For example, you might decide to set up a field of interest to support research for rare diseases, to support organizations that assist homeless families in getting back on their feet, to enable art museums to acquire works that celebrate the region’s diversity, and so on. With a field of interest fund, you’re leaning on the knowledgeable team at the Community Foundation to distribute grants to achieve your wishes. As is the case with a donor-advised fund, you’ll choose a name for your fund, whether you wish to use your own name (e.g., Samuels Family Fund or Samuels Family Fund for the Arts), maintain anonymity (e.g., Maryville Fund for the Arts), or something else altogether (e.g., Bettering Our World Fund). A designated fund is a good choice if you know you want to support a particular charity or charities for multiple years. This is useful so that the distributions can be spread out over time to help with the charity or charities’ cash flow planning, which allows you to potentially benefit from a larger charitable tax deduction in the year you establish the fund if, for example, your tax rates are higher than usual in that particular year. Your designated fund document allows you to specify the charities to receive distributions according to a spending policy you select. Last but not least, if you are over the age of 70 ½, pay particular attention to designated funds and field of interest funds as year-end approaches because these two types of funds, unlike donor-advised funds, can receive “Qualified Charitable Distributions” from IRAs - up to $105,000 per person in 2024! As always, thank you for the opportunity to work together! The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation. The news about large gifts keeps coming! And “big bet” philanthropy in general has been in the news recently, reportedly because donors’ approach to giving at scale is changing thanks to a greater focus on relying on the experts in organizations to deploy resources for maximum impact and trusting them to do so. It’s also encouraging that donors are trending toward giving gifts in dollar amounts that are appropriate to tackle the scale of the challenge to be addressed rather than basing donations solely on the organization's current capacity and budget.
The team at the Community Foundation can help you maximize your ability to receive large gifts to your reserve fund or endowment fund. We do this by offering structure and services for you to house your fund with us. This, in turn, allows our team to help you with crucial fundamentals for planned giving tools to attract and accept large gifts, including:
Indeed, planned giving, especially via bequests, continues to be an important source of funds for nonprofit organizations across the country. Some researchers have estimated that the historical average size of a charitable bequest falls somewhere between $37,000 and $78,360. That’s hundreds of times larger than the average one-time donation a living donor typically makes, which historically has been identified as hovering a bit over $100. Please reach out to the team at the Community Foundation to learn how we can help you grow your organization’s endowment or reserve fund. If your organization has not yet established its fund with the Community Foundation, let’s talk! Now is the time to make sure your planned giving and endowment infrastructure is firmly in place so you can lean into the “big bet” philanthropy trend. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. A donor-advised fund is one of many types of funds that an individual, family, or business can establish with the Community Foundation. You’re likely more aware of donor-advised funds than other types of funds because they are frequently covered in financial media and also because your organization might have received grants from donor-advised funds.
The team at the Community Foundation is happy to talk anytime to help demystify these popular vehicles. At the very least, however, you’ll want to check out the recently-released DAF Fundraising Report that sheds new light on the overall role of donor-advised funds in philanthropy and the significant value donor-advised funds provide to charities. For example, the report revealed that when a donor starts giving from a donor-advised fund, their annual giving increases by 96%! Donor-advised funds are also helping keep philanthropy strong. According to the report, the number of donors using donor-advised funds has grown by 79% in an environment where the number of other types of donors has declined by 6%. It’s absolutely worth your time to learn the basics of how a donor-advised fund works. You and your team also should consider developing strategies to identify and cultivate relationships with your donors who are using their donor-advised funds to support your organization. Dollars in donor-advised funds are already set aside for charitable giving, and it’s very convenient for donors to use their funds to support favorite organizations–like yours. It’s also important to know that the team at the Community Foundation encourages donors to give directly to their favorite charities when that’s the best strategy to achieve a donor’s estate planning, tax, and charitable goals. Many times, though, both the donor and the charity benefit from the donor using a donor-advised or other type of fund at the Community Foundation. Examples include cases where the donor wants to give a complex asset, such as real estate or closely-held stock, or needs to plan out several years of giving to address fluctuating income levels and tax liability. We are always happy to review how the Community Foundation works with donors through donor-advised funds and other vehicles to support your organization and others in the community. We look forward to hearing from you! This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. The team at the Community Foundation frequently hears from nonprofit professionals about how difficult it is to communicate to donors the value and importance of unrestricted gifts. This is especially the case when you and your colleagues are striving to attract dollars to boost your operating reserve or endowment fund.
Here are five cut-and-paste talking points you can use in your donor communications to help break through the myths that often surround unrestricted giving. Myth: A charity can use unrestricted dollars for anything it wants. Reality: When a donor makes an unrestricted gift to a charity, it means that the charity has the flexibility to use the funds where they are needed most within the charity’s overall mission. A charity has a legal and ethical responsibility to use all donations–whether unrestricted or restricted–to carry out its charitable purpose. Myth: Unrestricted gifts have to be big to make a difference. Reality: Any size unrestricted donation, whether to a charity’s current programs and operations or to its endowment fund, is meaningful. To fund their missions, charities rely on all levels of donations from a wide variety of donors. Even very small donations help charities build relationships with new donors and expand the circle of awareness. Myth: Donations that are restricted to supporting actual programs make the biggest difference. Reality: A charity is like any other organization, whether for-profit or nonprofit, in that there are critically important expenses required to do its work. Rent, utilities, technology, and insurance aren’t technically “program” expenses, but without these expenses, a charity cannot function. Unrestricted gifts often help support these essential line items in a charity’s budget. Myth: It’s hard to see the impact of unrestricted gifts. Reality: Unrestricted gifts are vital for a charity’s overall sustainability and allow it to carry on year after year. Indeed, a donor who gives an unrestricted gift can look at the entirety of the organization’s impact and know that the gift helped make it all possible. Myth: An unrestricted gift is not a “strategic” philanthropic investment. Reality: Unrestricted gifts are arguably the most strategic type of giving because they demonstrate trust in the charity’s leadership to make the best decisions in carrying out the charity’s mission. An unrestricted gift also sends a signal to other donors that the organization’s leadership and staff are strong, which in turn attracts more support. Please reach out to the Community Foundation for more ideas about how you can communicate the value of unrestricted and endowment giving to your donors. We are here to help! This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. The Community Foundation is honored to serve at the center of your philanthropy. Whether you’ve established a donor-advised or other type of fund, arranged for a bequest to a fund or to the Community Foundation itself, or both, our team strives to help you organize your giving to make it easy and convenient. If you’ve not yet established a fund or arranged for a bequest but are considering it, we look forward to continuing the conversation!
Charitable giving is important not only locally and nationally, but also internationally. Indeed, the World Giving Index 2024 Global Trends in Generosity reports that 4.3 billion people worldwide helped someone they didn’t know, volunteered time, or donated money to a good cause in the preceding month. It’s no surprise that research indicates that giving to others actually puts donors in a good mood. This is especially the case, studies show, in three ways:
We know this intuitively based on our own experiences. For instance, many of us enjoy picking out a birthday gift for a friend or family member and watching them open it. The same good feelings translate to charitable giving. People enjoy working with the Community Foundation. Certainly one reason is because the Community Foundation activates the research’s 3 key factors:
We look forward to helping you incorporate charitable giving into your life in ways that help the community and make you happy! The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation. One of many items on the legislative “watch list,” especially in light of the upcoming elections, is the standard deduction. Without intervening legislation, in 2026 the standard deduction for individual taxpayers younger than age 65 is scheduled to drop from $14,600 to $8,300.
While this may spell higher taxes for some taxpayers, the news could be positive for charitable giving. You’ll recall that the Tax Cuts and Jobs Act of 2017 increased the standard deduction significantly. As a result, only 9% of taxpayers itemized deductions in 2020 compared with 31% in 2017. Although certainly not the only factor motivating charitable giving, tax incentives do play a role in donors’ decision-making about whether, when, and how much to give. Indeed, statistics recently released by the National Bureau of Economic Research indicated that the increased standard deduction resulted in $20 billion fewer charitable donations in 2018 alone. The Community Foundation is happy to work with you and your tax advisors to map out a charitable giving plan for the next few years to navigate anticipated changes in the law. For example, this year you could consider using a technique called “bunching” to make two years’ worth of gifts up front to your donor-advised fund to take advantage of the standard deduction while it is still high. If you determine that bunching is right for you, naturally, cash is easy to give in a year of higher-than-expected income. So, for example, if you earn a large bonus this year, get a big increase in compensation, take a job buyout, or experience a significant liquidity event, your surplus income could make bunching ideal. Most of the time, though, even when you deploy a bunching strategy, donating highly-appreciated marketable securities is a better choice than giving cash because it is extremely tax efficient. Stock given to a public charity, such as your donor-advised or other type of fund at the Community Foundation, typically is deductible at the asset’s fair market value. The Community Foundation, in turn, pays no capital gains tax on its sale of the asset, thereby generating more dollars to support your philanthropic interests than if you had sold the stock and given the proceeds to your fund. You can think outside of the box, too, and explore other assets that make great gifts to your fund. As is the case with gifts of other long-term appreciated assets, a gift of real estate or closely-held stock avoids capital gains taxes and results in more money for your favorite causes than if you had sold the asset, taken the tax hit, and donated the proceeds. The bottom line? Now is a perfect time to look ahead at your charitable giving plans so that you don’t leave dollars behind. Your own financial situation, as well as the charities you support, will benefit from your careful planning. The Community Foundation is here to help! The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation. The word “endowment” can be intimidating, even for the most seasoned fundraising and planned giving professionals–and certainly for donors! But it doesn’t have to be that way. “Endowment” is such an important concept to secure your organization’s future, and it’s worth striving to simplify the basic points for your team and your donors.
Here are answers to five frequently-asked questions about your endowment fund at the Community Foundation that may help you communicate with your staff, board, and donors. Please copy, paste, edit, and deploy as you wish! What does “endowment” mean? “Endowment” refers to a designated pool of assets that are invested (in our organization’s case, by the Community Foundation) and tracked separately such that a modest portion (usually based on a percentage) of the assets are distributed each year to support our organization’s mission, and the rest of the assets remain invested to grow in perpetuity. Why is our endowment fund so important to the future of our organization? The assets set aside in our endowment fund produce an income stream that helps support our mission now and in the decades ahead, allowing us to deliver on our mission consistently over time, especially as needs shift and the fundraising environment ebbs and flows. Plus, the growth of the endowment itself can provide increasing levels of support each year. How can donors stay involved even after they make an endowment gift? Our team is happy to keep donors informed about the positive change in the community that is occurring thanks to distributions from the endowment fund. We’re happy to continue to keep a donor’s children and grandchildren informed, too, beyond a donor’s lifetime. In this way, a donor’s legacy continues through the generations. Who decides how the endowment distributions get used each year? Our organization’s board of directors reviews endowment income each year as part of a careful budget process. It’s very clear that certain dollars are flowing into the budget from endowment income. Our independent board of directors, together with staff, develops and oversees a budget to meet our organization’s mission for the coming year. How can a donor make an endowment gift? A donor certainly may transfer cash to the endowment fund. Even better for tax purposes, a donor can transfer appreciated stock or real estate. A donor can also work with estate planning and financial advisors to structure a bequest to the endowment fund. Our team works with the professionals at the Community Foundation to help each donor design a gift to achieve both the donor’s tax goals and charitable giving goals. For instance, many advisors highly recommend a bequest through an IRA beneficiary designation because of the multiple tax benefits. Related, if a donor is over 70 ½, making a “Qualified Charitable Distribution” from an IRA directly to our organization’s endowment fund is a very effective charitable planning tool to reduce income tax and, if applicable, also satisfy Required Minimum Distributions. The Community Foundation team looks forward to working with you and your donors to establish meaningful endowment gifts that support your organization’s mission for generations to come. Thank you for the opportunity to work together! This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. “You can’t make old friends” isn’t just the title of an album; it’s an important reminder that long-term relationships are the key to successful endowment building. That’s common sense, of course, but sometimes it’s hard to put this principle into action. You’re ready now to grow your endowment fund at the Community Foundation, and you wish your donors shared your sense of urgency!
There are no silver bullets or magic tricks or secret sauces to make donor relationships grow faster, but it might help to understand how your donors’ emotions factor into decision-making about when–and to what extent–they will make a financial commitment to your endowment. Along those lines, the team at the Community Foundation really enjoyed a recent article in the Stanford Social Innovation Review offering suggestions for ways to approach philanthropy so that it is “relational,” including thinking in terms of "we" instead of "us” or “them" and moving away from hierarchical models achieving impact. As you update your endowment-building plans, consider three ideas inspired by principles of relational philanthropy. Focus on donor loyalty and trust Keep an eye toward creating long-term, mutually beneficial relationships with donors. Trust fosters donor loyalty, encouraging recurring and more substantial contributions over time, which is crucial to ultimately securing an endowment gift. To achieve this, you need to understand what benefits the donor is seeking by supporting your organization. Is it recognition? The knowledge that they’re part of something bigger than themselves? Confidence that a problem they’ve personally wrestled with will be solved for others? The donor’s perspective matters. Inspire donor advocacy It’s one thing for donors to feel personally connected to your organization. It’s an entirely bigger thing for them to become advocates. When a donor is so dedicated to your mission that they actively encourage their friends and family to also support your organization, you know you’ve got a friend for life. Asking this type of donor for a commitment to your endowment is likely to achieve a high rate of success. Pay close attention to which donors are regularly referring new donors to your organization, whether by offering up prospect names directly or inviting prospects to join the donor’s table at your organization’s annual event. Know your audience Large-scale communications platforms such as email campaigns, social media, and your website are important tools in all fundraising activities, including securing endowment gifts. An endowment gift is a big ask, though, so make sure to layer in highly personal outreach to your donors, in addition to general messaging. One-by-one communication across channels allows you to demonstrate your organization’s understanding of donors' individual preferences for their involvement. As always, please reach out to the Community Foundation anytime you have questions about best practices for growing your endowment fund. If your organization has not yet established its endowment fund at the Community Foundation and you’d like to learn more, we’d welcome the opportunity to talk with your team and board of directors. We look forward to continuing to work side-by-side to improve the quality of life in our community through the power of philanthropy. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. As you implement strategies to attract gifts to your endowment fund at the Community Foundation, it’s critical to regularly encourage donors to check their estate plans to be sure they’ve incorporated their intended bequests. Now is an especially good time to get the word out because August is national Make-A-Will Month.
Here are three cut-and-paste messages you can use in your communications with donors, whether those are broad communications such as website pages or one-on-one emails to particular donors.
As always, please reach out to the team at the Community Foundation! We are here to help you build your endowment fund. We appreciate the opportunity to work with organizations like yours that are making such a big difference in the quality of life in our community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. |