Donor Connection – November.23

It’s November, which is hard to believe.

The team at the community foundation is here to help you navigate your charitable giving priorities all year round, and especially during the giving season when we know many of you are beginning to turn your attention to tax planning and ensuring that you’ll meet your charitable goals before the end of December.We are grateful for those of you who’ve already established a fund at the community foundation, and we are also grateful for those who are considering it. We’d love to work with you. The community foundation is our region’s trusted source for all things philanthropy, and we are honored to serve you as you pursue the charitable endeavors that mean the most to you and your family.

Wishing you all the best for a safe and happy Thanksgiving.

Angie Tatro, CKCF CEO


Get ahead of the year-end rush

Holidays and tax planning (although very different in the ways they are celebrated!) are both year-end traditions. No doubt (?) you’ve got the holidays covered, and perhaps your advisors are already helping you make sure your tax planning is in place. It’s a good idea to familiarize yourself with several important year-end charitable giving techniques and deadlines so you can be prepared for conversations with your attorney, accountant, and financial advisor, as well as the team at the community foundation. We stand ready to assist!

Standard deduction reminders.

Remember that the 2023 standard deduction for single taxpayers ($13,850) and married filing jointly ($27,700) is up nearly 7% over 2022. While this increase allows for more relief from income tax for most filers, it also sets a higher bar to exceed for those who itemize deductions. Keep your household’s standard deduction amount in mind when you tally your deductible expenditures, including your gifts to charity. Reach out to the community foundation for help.

Itemization and bunching.

If your total deductions are at or under the standard deduction amount for 2023, but you and your advisors determine that your particularly high income this year means you could benefit from increased deductions, a “bunching” strategy may be a good fit for you. “Bunching” means you are “front-loading” charitable donations into the current year, knowing that you plan to make these donations in future years. By structuring a large year-end gift to your donor-advised fund at the community foundation, you could surpass the standard deduction threshold to further reduce your taxes in 2023. Then, your favorite organizations can receive support from your donor-advised fund not only this year, but also in subsequent years. This allows you to provide predictable, steady support for the causes you love. Our team can help you build a strategy!

Stock, not cash!

As you prepare for year-end giving, don’t automatically reach for the checkbook! Gifts of long-term appreciated stock to your donor-advised or other type of fund at the community foundation is always one of the most tax-savvy ways to support your favorite charitable causes because capital gains tax can be avoided. Similarly, if you are a business owner, you can work with your advisors and the community foundation team to explore how you might give shares in the business to your fund at the community foundation as a part of your overall estate plan. Not only will transfers be eligible for a charitable deduction during the year of transfer (and at fair market value if you held the shares for more than one year), but also these gifts could potentially reduce income tax burdens triggered upon a future sale of the business.

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 the age of 70 ½, you can direct up to $100,000 from your IRA to certain charities, including a field-of-interest, designated, unrestricted, or scholarship fund at the community foundation. If you’re 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. Our team can work with you and your advisors to go over the rules for QCDs and evaluate whether the QCD is a good fit for you.

Fingers crossed on deduction legislation.

Keep an eye on the Charitable Act, which, if passed, would permit a deduction for charitable gifts that exceed the standard deduction. The Charitable Act proposes to restore the pandemic-era “universal charitable deduction” and raise the cap from $300 for individuals ($600 for joint filers) to approximately $4,600 for individuals ($9,200 for joint filers). This could be a game-changing incentive for your favorite charities–and for you!

Don’t miss year-end deadlines.

Please reach out to the community foundation team to find out when certain transactions must occur to be legally completed during this tax year, including checks to your fund at the community foundation which must be postmarked or hand-delivered no later than December 31. Gifts of marketable securities also need to be fully transferred by December 31, so please work with your advisors to contact us in plenty of time for our team to process and receive the transfer.


Gifts of “complex” assets deliver multiple benefits

 

When you think about supporting your favorite charities or making contributions to your donor-advised or other type of fund at the community foundation, cash may be the first thing that comes to mind. It seems so easy to just write a check or donate online. (You probably don’t immediately think of artwork or other types of assets!)

Most of the time, gifts of highly-appreciated marketable securities are the most logical non-cash gift. Gifts of publicly-traded stock, for example, are easy to transfer to your donor-advised or other type of fund at the community foundation. The community foundation team can provide you or your advisor with 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 your 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 at the community foundation; you’d owe capital gains tax on the sale. Especially in cases where you’ve held the stock a long time and it’s gone up significantly in value since you bought it, the capital gains hit can be significant.

Cash and publicly-traded stock are not your only options for adding to your fund at the community foundation. You can also give assets such as real estate, closely-held business interests, and even artwork or other collectibles. When you give assets like this to a fund at the community foundation or other public charity, the tax treatment of these “alternative” assets is the same as gifts of marketable securities in that no capital gains tax will be levied when the charity sells the assets, and, assuming the assets are “long term” capital gains property under IRS rules, you’ll be eligible for a charitable deduction at the fair market value of the assets on the date of transfer. Gifts of assets other than cash or marketable securities are sometimes called gifts of “complex assets,” but that does not mean the process needs to be intimidating. The team at the community foundation can work with you and your advisors every step of the way.

You can also use “complex” giving techniques to achieve your estate planning and tax goals. For example, if you are over 70 ½, the community foundation can work with you and your advisors to execute a Qualified Charitable Distribution from your IRA to a designated or field-of-interest fund. Or, we can work with you and your advisors to establish a charitable remainder trust if you’d like to retain an income stream and also get the benefit of an up-front charitable deduction.

As the end of the year approaches, it’s a good time to evaluate your portfolio with your advisors to determine whether a gift of complex assets might help you support a critical need in the community while providing key tax benefits for you and your family.

If you have questions about an asset you’re interested in contributing, please reach out to us. The community foundation is happy to help you establish a charitable giving plan and take the complexity out of giving complex assets.


Crisis giving: Avoiding pitfalls

Whether you’re motivated to respond to needs created by a conflict, accident, or natural disaster, it’s human nature to want to help—especially through financial support. All too often, a tragic event occurs and is quickly publicized through news accounts or social media. Then, the dollars start rolling into a crowdfunding site like GoFundMe, Kickstarter, or Fundly.

And therein lies a problem. Or a potential one, at least.

Well-intended zeal and urgency to give may not be truly aligned with the needs. Unfortunately, not all “dollar destinations” are legitimate, either in their authenticity or their declarations that a specified gift percentage will be delivered as intended. Among fraudsters’ tools are TV ads that can pop up overnight; illicit websites or URLs bearing seemingly familiar names (known as phishing); or digital money transfer recipient addresses or account names that are difficult if not impossible to verify. In some cases, donors are mistaken or confused about the deductibility of their contributions. Even the IRS is issuing warnings about crisis giving and potential fraud.

Count on the community foundation as your trusted source to authenticate grantee organizations. Our team not only knows the charitable landscape, but also we can fully vet recipient organizations for qualification and tax deductibility. The community foundation’s role is especially important and relevant in light of a recent study that revealed a growing decline in  trust in nonprofits–despite nonprofit organizations still being among the most trusted organizations (along with small businesses).

The community foundation is here to help you navigate all of the considerations that factor into making a tax-deductible gift to a legitimate organization that can truly help offer the relief you intend. Indeed, mobile devices have made it easy to act on our honest instincts. However, in an increasingly impatient, noisy, and short-attention-span world that can carry a “get ‘er done” urgency, haste often makes waste.

Please give us a call to talk through your options for crisis giving and how to make sure your dollars get to the people and places that need it most.


This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 

Donor Connection – October.2023

Hello from the community foundation!

We hope this note finds you well. In our community and across the country, families are gearing up for a busy fourth quarter. Giving season shifts into full gear, and we look forward to working with you! Whether you’ve already established your donor-advised or other type of fund at the community foundation or are currently considering it, please reach out. We would love to help you get even more connected to the causes you care about while maximizing tax benefits at the same time.

In this issue, we’re covering topics that are on the minds of many people as the year winds down.

Retirement and charitable giving continue to be intertwined. Over the last few years, we’ve all seen retirees who’ve gone back to work, colleagues who decided to retire early, and everything in between. Because IRAs and other retirement accounts are such useful assets for charitable giving, it is important to recognize the opportunities presented for charitable giving at every stage of retirement, from contemplating retirement all the way through to permanent retirement. Learn how the community foundation has you covered!

Meeting your 2023 charitable goals does not have to be stressful. The end of the year is a well-documented season of anxiety for many people. Fortunately, working through the list of organizations you’d like to support can be a bright spot. The team at the community foundation can help you accomplish your charitable giving objectives efficiently, effectively, and joyfully, including tapping into tax benefits. Learn why waiting until the end of the year to complete your giving actually has a silver lining.

Do good, feel better. It is not your imagination! When you give to charity or do something good for others, you really do feel better. From reductions in risks for high blood pressure to sleeping better at night, learn why philanthropy is such a powerful catalyst for well-being–both your own well-being and the health and happiness of the people whose lives you are improving through gifts to your favorite nonprofits.

Thanks again for all you do. We are honored to work together and wish you the best.

–Angie Tatro, CKCF CEO


Retirement strategies: Tax benefits and beyond

At the community foundation, we regularly talk with retirement-age donors and fund holders about the tax benefits of Qualified Charitable Distributions and leaving bequests of IRAs to a donor-advised fund at the community foundation. But getting involved in philanthropy can be so much more than that for retirees and people who are gearing up (or down!) for retirement. This is particularly relevant as some retirees consider returning to work and contemplate what that means for their charitable giving and volunteering plans.

You’ve likely heard the statistic that 10,000 people in the United States are turning 65 every day. And while 65 may be the “traditional” retirement age in this country, the milestone appears to be anything but traditional nowadays. While Covid-19 did not impact retirement ages as much as some might have predicted, many of those who did retire actually now regret it. While many retirees are seeking work for financial reasons, two of the top six reasons to go back to work involve boredom or loneliness.

For people who’ve reached a theoretical retirement age, working or returning to work provides many opportunities that tie into philanthropy. For example:

–You can still contribute to your IRAs (which many people do not realize), and if there’s an employer-sponsored 401(k) plan, all the better.

–You can use your extra income to fund your donor-advised fund at the community foundation, making you eligible for an income tax deduction as well as removing assets from your taxable estate.

–As you take advantage of the opportunity to get more involved with causes you care about in your free time (which has perhaps increased because children have grown), you can update your estate plan to leave additional bequests to your donor-advised fund at the community foundation to support your favorite causes after you’re gone.

–And of course, if you are 70 ½ or older, you can take advantage of the Qualified Charitable Distribution (QCD) which allows you to direct up to $100,000 annually from your IRA to a qualified charity, and even more in future years as the $100,000 cap is indexed for inflation. Plus, if you’ve reached the age when you are required to take distributions from your IRAs, QCDs will offset those Required Minimum Distributions (RMDs).

For those who’ve retired for good, remember that many of the organizations you care about could likely use your help not only financially as a donor, but also as a volunteer, board member, or community advocate.

Please reach out to the team at the community foundation. We’d love to work with you on your charitable giving plans for retirement, un-retirement, or re-retirement, as the case may be! Your seasoned professional skills and civic commitment are truly valuable to improve the quality of life in our community.


Fourth quarter jitters: Charitable giving tips to reduce your stress

You are not alone if you begin to feel a little anxious when October rolls around. Many people experience year-end stress, whether because of looming deadlines at work, tax-related estate planning cut-off dates, anticipating a busy holiday season of travel and social engagements, or simply the realization that another year is coming to a close and there’s not a lot of time left to check off items on the 2023 punch list.

To top it all off, many families do a lot of their charitable giving at year end, too. But that’s one area that does not need to be stressful. Your giving can be more easily accomplished than sending invitations, herding family members, guessing colors or sizes, and remembering who to include–or not!

Here are three tips for alleviating fourth-quarter stress and still be able to hit your charitable goals for 2023.

–Using your donor-advised fund at the community foundation makes giving very convenient. Through the foundation’s online portal, you can easily view a list of all of the organizations you’ve supported so far this year, make note of the ones you missed or want to add, and then finish the annual task.

–Your late-year timing could actually be useful for the organizations you care about, given the pronounced need for support during the gift-giving time of year, whether that’s to an organization seeking to achieve its own year-end goals or an organization that provides food or utility bill relief during the cold winter months. According to National Giving Month, 31% of charitable giving occurs in December; 12% of giving typically occurs between December 29 and 31; and 28% of nonprofits raise as much as 50% of their funding in December.

–Charitable needs are heightened during the fourth quarter because it is especially stressful for people experiencing financial challenges. For 52% of respondents surveyed in a 2023 study, money was the most cited factor that negatively affects their mental health, a level 25% higher than a year ago. The organizations supporting these people are in high gear during the fourth quarter and holiday season.

–By the end of the year, you will likely have a better idea of your financial situation, ideal target amount for charitable tax deductions, and the performance of stock in your portfolio. This will allow you to make gifts to your donor-advised fund of highly-appreciated stock, avoid capital gains, and reduce your taxable estate. And, of course, the proceeds of that stock will hit your donor-advised fund tax free, so the full amount of the sale price is available to support your charitable giving priorities.

Completing your 2023 charitable giving can reinforce philanthropy’s win-win value proposition: You can check a task off your list by supporting causes and organizations that are important to you and receive key tax benefits, and those in need will appreciate your generosity while feeling a greater sense of the season’s spirit.


Do good, feel better: Philanthropy through the lens of well-being

Philanthropy means “love of humanity”—and, according to some, “philanthropy” includes acts that benefit both the giver and the receiver. This is surprising to some people who have been taught “it’s better to give than to receive.”

Somehow we have popularized the idea that giving should “hurt.” But that is not what the research says. Consider just a few examples:

  • Research on the connection between volunteering and hypertension revealed that four hours of volunteering a week reduced the risk of high blood pressure–by 40%–in adults over 50.
  • Another study indicates that giving reduces cortisol levels.
  • Yet another study found a link between unselfishness and a lower risk of early death because “helping others” reduces stress-related mortality.
  • Research has linked doing something good for someone else to an increase in endorphins.
  • An altruistic attitude in the workplace makes you more productive and less likely to quit.
  • Doing good and being grateful helps you sleep better at night.
  • People who do just one good thing a week for someone else actually become happier over time.

When people were asked to reflect about all the ways they do good (giving to charity, volunteering, serving on boards, donating canned goods, purchasing products that support a cause, celebrating at community events, sharing with others, and so on), 92% reported that they felt better about themselves.

Even just thinking about what you’ve given others–and not only just being grateful for what you’ve received–is a huge motivator to do good things for others, over and over again.

The “do good feel good” benefits of philanthropy is just one of the many reasons that so many individuals and families work with the community foundation. If you’ve already established a donor-advised or other type of fund with the community foundation, we look forward to continuing to help you fulfill your charitable wishes to improve the lives of others. If you’ve not yet established a fund at the community foundation, we look forward to working with you to make a difference in the causes you care about.


This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 

Donor Connection – September 2023

Hello from the community foundation!

We hope the end of summer has treated you well and that you are gearing up for the busy months ahead as 2023 begins to wind down. We have heard from many of you that charitable giving is on your minds. Certainly, philanthropy is an important topic during the latter part of any year as you and other charitably-minded individuals and families plan out the support you’d like to provide to your favorite charities. This season, charitable giving is even higher on the radar because of the recent natural disasters and the desire of so many to do whatever they can to support relief efforts.

We are grateful to have the opportunity to work with so many of you who are already donors and fund holders at the community foundation. For those of you who are considering establishing a donor-advised or other type of fund with the community foundation, thank you! We appreciate your consideration and look forward to meeting with you soon to put together a charitable giving plan that meets both your philanthropic goals and your goals for your financial and estate plan.

In this issue, we are covering four topics that are bubbling up in many conversations:

–Helping those affected by the Maui fires and Hurricane Idalia is a top priority for many of you. Our community foundation, as well as many community foundations across the country, are rallying support for people in need in the wake of these and other disasters. Please reach out. We can help ensure that your generous gifts are deployed in the most efficient and effective way.

–Several of you have reached out to ask about the Roth treatment of 401(k) “catch up” contributions for some workers over 50 that has appeared to be a moving target! What does this even mean for charitable giving–and for you? The net-net is that those of you who would have taken a tax hit now are getting a two-year reprieve, which could leave you with potentially hundreds of extra dollars, which you can now give to charity if you are so inclined.

–Always popular in discussions about charitable giving, retirement plans continue to be at the forefront of many donors’ plans for bequests to their donor-advised funds at the community foundation. This is a good thing; donors who leave IRAs to their kids, for example, and leave their stock to charities are missing out big time on tax benefits. Call the team at the community foundation to learn how you can be even more savvy about the way you provide for both charities and your children in your estate plan, especially now that the “stretch IRA” is no longer.

–This is the time of year when we start to get a lot of questions from donors about food insecurity, and especially about how to involve children in the charitable giving conversation. The community foundation is happy to provide tips and insights about why food insecurity is such a big deal and how even the youngest donors can get their heads around the magnitude of the issues.

As always, we look forward to hearing from you! Thank you for everything you do for the community we all love.

Wishing you all the best,
Angie Tatro, CKCF CEO


Disaster relief efforts and the community foundation’s collaborative role

Our hearts go out to the people of Maui—and all of Hawaii—in light of the tragic fires that occurred early in the month. By all accounts, those will take years, if not decades, to recover and rebuild from. Restoration costs are already estimated at $5.5 billion, although only time will tell just how much time and money will be needed.

As if that weren’t enough, much of the U.S. slogged through what has been called the hottest summer ever—and July as the hottest month ever—with uncomfortably high temperatures affecting land and sea even before the start of hurricane season. And then there was Tropical Storm Hilary and a simultaneous magnitude 5.1 earthquake that struck Southern California. To round out the month, Hurricane Idalia made landfall on August 30, with extensive damage reported and tens of billions of dollars of losses projected.

Fortunately, community foundations are well-suited to facilitate and manage relief funds for disasters and humanitarian tragedies, no matter where they occur. Certainly local community foundations in the areas most affected by a disaster consistently jump in immediately to establish funds to accept donations, which the community foundation then deploys rapidly and effectively to high-performing nonprofit organizations that are delivering relief where it is needed most urgently.

Even community foundations and other charitable foundations that lie outside of affected geographic areas are committed to responding quickly by launching their own fundraising efforts, either promoting the funds established by community foundations in the affected areas or their own funds created to directly support relief efforts. Indeed, disaster relief funding is frequently coordinated by community foundations, which are widely viewed as one of the very best vehicles to help donors provide financial support to relief efforts. Community foundations understand, for example, that the most immediate needs in the wake of a disaster are often for food, shelter, water, and hygiene kits. In addition, the community foundation knows which nonprofit organizations on the ground are best qualified to meet those needs.

With a deep understanding of philanthropy and charitable giving tools to effect meaningful change, the team at the community foundation is here for you. Whether your interests include disaster relief, education, the arts, social services, or other causes near and dear to your heart, the community foundation can help you fulfill your goals and intentions.


Relief from catch-up requirements: More money for charitable giving?

Legislation known as SECURE 2.0 contained a dizzying array of changes to the laws governing retirement plans. Passed at the end of 2022, SECURE 2.0 is 130 pages long; overall, its purpose is to encourage more retirement savings through vehicles like employer-sponsored 401(k) plans.

Lately, the buzz around SECURE 2.0 has been focused on a very specific provision addressing what are known as 401(k) “catch up” contributions. A “catch up” contribution allows a worker aged 50 and older to pump more money (an extra $7500 in 2023) into their 401(k) plans, beyond the usual $22,500 statutory maximum for employee deferrals.

Normally, an employee’s contributions to a 401(k) are not included in adjusted gross income for tax purposes, which is a big perk. But under the provisions of SECURE 2.0, if you are at least 50 years old and earned $145,000 or more in the previous year, these catch-up contributions would be treated like Roth IRA contributions–meaning the money used to make those contributions is after tax. Essentially, you will be paying tax on the money you use to make the catch up contributions. Depending on your tax bracket, the extra tax could possibly tally into the thousands of dollars.

But! The IRS’s recent ruling has delayed the Roth treatment provision, so that it will not become effective until 2026. This means your catch-up contributions are still “pre-tax,” at least for the next couple of years.

What is the bottom line here? If this situation applies to you–if you are over 50, earn more than $145,000 a year, and want to make catch-up contributions to your employer-sponsored 401(k) plan–you now have an extra couple of years to enjoy the tax perks of these contributions. This relief, in turn, might allow you to make larger charitable gifts than you had originally planned when you budgeted for 2023’s charitable giving.


Rethinking inherited IRAs

As you build your estate plan and consider how to provide for your adult children, keep in mind that naming children as the beneficiary of an IRA or other qualified plan probably is not something that should be automatic.

For starters, if you are charitably-minded and have other assets, such as highly-appreciated stock, to leave your children, those assets should come first. This is because your children will inherit the stock at a “stepped up” basis, meaning their capital gains tax hit upon sale will be far less. Plus, if you name a charitable organization, such as your donor-advised fund at the community foundation, as the beneficiary of your IRA, the IRA proceeds won’t be depleted by either income tax or estate tax. Your kids, on the other hand, will have to pay income tax on the proceeds of an inherited IRA.

This dynamic became even more important to consider when the law changed a few years ago, such that a child who was named as the beneficiary of a parent’s IRA, for example, could no longer count on a relatively straightforward and tax-savvy method of withdrawals called the “stretch IRA.” With the passage of the SECURE Act, that changed for many children who inherited an IRA after December 31, 2019. Instead of taking distributions over their lifetimes, affected children now need to withdraw the entire inherited IRA account within a 10-year period as calculated under the law.

If you’re evaluating options for how to handle an IRA in your estate plan, talk with your advisors and the community foundation about leaving an IRA to your donor-advised fund or other charity via a beneficiary designation. Or, if you’d still like to provide an income stream to your children following your death, in some circumstances it might be worth considering establishing a charitable remainder trust to name as the IRA beneficiary (assuming the stars align vis-a-vis children’s health, their tax brackets, projected returns, and other factors).

Importantly, if you are a child of parents who own IRAs, they will appreciate you bringing this opportunity to their attention! Your parents might not realize that their good intentions to leave their IRAs to their children could be saddled with tax burdens down the road. Encourage your parents to talk with their advisors and give the community foundation a call. We are here to help make IRAs a win for everyone–your parents, their favorite charities, and you!


Community need spotlight: Food insecurity

Though natural disasters and the resulting humanitarian needs are frequent but sporadic, the need for food in our community is an everyday constant. And with school back in session, the needs among the food insecure and food banks—often met through philanthropic generosity—are heightened.

Compounding the issue is that food inflation remained relatively high at 4.9% in July, despite being less than half of its mid-2022 11.4% rate. Typically second only in household budget importance to shelter, food’s nearly 5% year-over-year increase frustratingly occurred when prices for gasoline, natural gas, and airline fares registered double-digit declines, according to July’s Consumer Price Index figures. Digging deeper into the food price conundrum, food-at-home importance was more than double of food-away-from home. Deeper still, the prices for produce and convenience foods like cereal and bakery products led the price increases.

Together, food’s high demand and prices are straining philanthropic food dollars. This reduces funding availability for other needs, especially seasonal back-to-school clothing and supplies, and also utility relief due to the scorching summer temperatures.

Many donors and fund holders at the community foundation like to stay up-to-date on what’s going on with the need for food. Indeed, many families discuss food insecurity with their children and grandchildren as an opportunity to learn about philanthropy because it is easy for even young children to understand how important food is to well-being and what it might feel like to be without it.

Here are three insights you can consider as you talk with your family about the importance of charitable giving to support families in your community who are faced with challenges putting food on the table:

  • Approximately 49 million people—about 1 in 6 Americans—received charitable food assistance sometime in 2022.
  • During an average day in the 2021-2022 school year, 15.5 million children received a school breakfast and nearly 30 million children received a school lunch.
  • Research has documented improved academic performance in math and English language arts by students participating in Universal Free Lunch programs.

By working with the community foundation, you and your family can learn about charitable organizations in our community that are striving to help people who are facing hunger. Whether you’d like to support a local organization, or perhaps an organization in the community where you were raised or have a particular interest such as the locale of a second home, the team at the community foundation can help you make a difference through your donor-advised fund, arrangements for bequests and other planned gifts such as retirement plan beneficiary designations, a field-of-interest fund, and many other charitable giving vehicles that are designed to meet your charitable goals as well as your financial and tax goals.


This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 

Donor Connection – August 2023

Greetings from the community foundation!

As always, it is our pleasure to work with you as you fulfill your charitable intentions. Every day, we are inspired by the generosity of our donors and fund holders. We’re thrilled that the word is spreading, too! Many fund holders have introduced us recently to colleagues and friends, and we are grateful for these referrals. If you have not yet established your donor-advised or other type of fund at the community foundation, we look forward to working together to explore the best options for you and your family.

In this issue, we’re covering topics that surface quite frequently in our conversations with fund holders, donors, and friends in the community.

–Even philanthropy has a learning curve, both for adults and especially for children. If you are interested in teaching your children–especially your young children–about what charitable giving is all about, consider leaning into positive reinforcement. A child can learn a lot when they understand that the simple actions they take every day–whether it’s tossing coins into a fountain to support a children’s hospital or donating their gently-used clothing–make a difference in the lives of others. Young children enjoy talking about the things they care about, and a dialogue with a parent or grandparent can really help ignite their charitable spirit. The community foundation is always happy to offer ideas and opportunities to get the whole family involved in the joy of giving.

–If you’re an entrepreneur like many of the donors and fund holders at the community foundation, you may have noticed a few parallels between how you approach charitable giving and how you approach growing your business. You may also see similarities between growing a business and the issues faced by the nonprofit organizations you support. This is not an accident! Indeed, when it comes to philanthropy, entrepreneurs tend to “give like they made it,” treating their support of favorite causes as an investment in the community they love.

–August may be National Make-a-Will month, but really anytime of year is a good time to review your estate plan and make sure that you’ve captured your wishes for gifts to family and loved ones, as well as gifts to the charities you’ve supported throughout your lifetime. The community foundation offers tax-savvy, easy ways to help you and your advisors incorporate  charitable wishes into your estate plan, including the ability to update your intentions for charitable gifts over the years to reflect current involvement in favorite causes.

Thank you for being part of the community foundation, and thank you for all you do for our region through charitable giving! We appreciate the opportunity to work together.

Angie Tatro, CEO


Making it fun: Tips for teaching children about philanthropy 

Over the years, you’ve probably taught your young children, grandchildren, nieces, and nephews lessons along the lines of “share and share alike” and “better to give than to receive.” But how do you transition these lessons into more concrete instruction about charitable giving, without risking the youngest members of your family becoming overwhelmed or bored? And how can you make those lessons effective as children grow older?

To inspire teenagers and young adults, consider tapping into an increasingly popular topic among younger generations, which is the notion of “purpose.” “Finding one’s purpose,” in the context of both personal lives and careers, is also a concept that can unite generations within a single family. The overarching purpose of giving can be framed as making the world a better place or strengthening the community. This translates nicely for youths who are seemingly always asking, ”Why?”

Teaching young children about philanthropy can be a little tricker. Indeed, many donors and fund holders at the community foundation have expressed an interest in learning how to do this. Here are a few principles that might help. And, as always, reach out to the team at the community foundation for ideas related to your own particular situation.

Positive reinforcement is a must.

As with any successful learning experience, positive reinforcement is a must in teaching the values of charitable giving. In particular, you may want to consider reinforcing that every charitable gift is good regardless of the profile of the giver, the size of the gift, or the nature of the recipient. Positive reinforcement in charitable giving is effective because it first engages the charitable giver’s own understanding of what it means to be philanthropic—from the giver’s own perspective–even if that giver is very young. So when your school-age children or grandchildren are raising money for a charity through a school fundraiser, throwing coins into a fountain to support a local children’s hospital, or donating gently-used toys and clothing, make sure you let the child know that these gifts really do make a difference.

Charitable giving can be defined expansively and inclusively.

When you’re talking with a 10-year-old, conversations about giving back are most productive when they go well beyond discussions about big checks written to highly-visible organizations. You may find it helpful in your conversations to cast a wide net around the definition of what it means to be charitable, often including things like adopting an older dog who needs a home, turning off lights to help the environment, cooking dinner for neighbors in need, helping to pay a family member’s medical bills, and recycling aluminum cans. Your enthusiasm during the conversation will be contagious as you convey the opportunities. The world is full of good deeds waiting to be done!

Tap into what the child cares about.

How do you know what charitable causes might inspire the young children in your life? Ask! You’re likely to hear things like animals, moms, friends, family, trees, school, reading and writing, having a home, finding missing people, helping to rescue victims of natural disasters, and having clean air and water. Any one of these elements gives you a fantastic opening for further dialogue, especially when you start that conversation based on the lens through which children see the world in their everyday lives and identify the needs within it. Charitable giving opportunities are abundant!

Understand that children have a power and direction all of their own.

Even 10-year-olds these days are assertive, aware of news and world affairs, and most importantly, digital natives. They like to figure things out on their own. With the tiniest bit of guidance and a lot of encouragement, their ideas go a long way. Let a child’s interests guide your lesson on giving. You do, however, have a strong power of suggestion as an adult. Kids do not necessarily know how to find the exact names of charitable entities, and they certainly do not know what “501(c)(3)” means, but they remember a place after they’re told it does lots of good for people.

Keep it short and keep it mutual.

The children in your life are brilliant, wonderful, and perceptive, but they do have short attention spans. Make the lessons informal, spontaneous, and flexible, and create plenty of opportunities for storytelling and game time. Children have a story for everything, and they love to share. Let them talk about how they feel. Let them tell you how, where, and why they want to give.

Take action!

Finally, don’t just talk–take action! For children with a grasp of money, charitable values can be taught through allocations. For the youngest, that may be from a weekly allowance or earnings from performing household chores. For the more experienced, allotments can come from after-school or summer job earnings. Giving can be highly interactive or participatory. For example, parents can show children the causes they support or suggest potential grantees based on the child’s interests, and let them choose. Parents can also show them how a gift can be easily made from the family’s donor-advised fund at the community foundation, which offers many benefits and can often be named to include names of the child or children.

At the community foundation, we’re here to help your family–even its youngest members–convert ideas into reality for the causes they care about the most.


 

Like entrepreneurs, philanthropists inspire and innovate through their investments

Despite the recently-announced decline in 2022 charitable giving, we continue to hear inspiring stories from you and other fund holders and donors. We’re also hearing from more and more individuals and families who are not yet fund holders that they’re very interested in establishing a donor-advised, field-of-interest, designated, or unrestricted fund at the community foundation, and nothing could make us happier! Increasing charitable giving and connecting donors to their favorite important causes are our priorities at the community foundation.

The uptick in conversations about philanthropy has inspired us to reflect on the noteworthy generosity of so many entrepreneurs who become very generous donors and leaders in philanthropy. And on that front, the news keeps getting better. For example, the Giving Pledge has added six pledgers already in 2023, one more than during all of 2022; savvy investors, especially in the tech sector, are enjoying the market’s 2023 rebound, at least so far; and we’re seeing an increase in the number of those who’ve experienced successful business exits take a visible role with their commitments to important projects in their regions.

Over the years, we’ve observed an interesting trend. Entrepreneurs are certainly donors, but are donors entrepreneurs? In other words, is an entrepreneur’s approach to philanthropy similar to the entrepreneur’s approach to building a business? Do they give it like they made it?

We believe the answer is yes, absolutely. And often in ways that entrepreneurs–and other donors, for that matter–may not consider.

Indeed, an “entrepreneur” is sometimes defined as a person who aspires to build something bigger than themself. That’s exactly what happens when a donor supports favorite causes through a donor-advised or other type of fund established at the community foundation. This is especially appropriate because contributions to funds at the community foundation are much more than simply charitable donations. Contributions are investments in local philanthropy to improve the quality of life in our region and to support the causes the donor cares about. The return on investment is human-centered rather than only financial, and those returns deliver benefits to not only the nonprofits who receive grants from the fund, but also to the community as a whole.

Here are few ways that gifts—rather, investments—via a fund at the community foundation are similar to entrepreneurship:

–A gift from one person, one couple, or one household can have a generous ripple effect that “scales” to help many, whether that is to feed many families, subsidize a childcare center, or help support programs that allow parents to work and earn a living.

–Donated funds are the “seed money” that can inspire innovation, the kind that allows the grantee organization to function in new and efficient ways.

–A gift can expedite creation of the recipient organization’s brand new programs via pilots (in the tech world, “MVPs, ” or minimally viable products). This form of testing and learning is a critical step to achieving product or service viability, whether in the for-profit or nonprofit sector.

–Philanthropic support can provide a nonprofit organization with the means to hire much-needed talent, such as a social worker or a fundraising professional. This is not unlike an entrepreneur’s need to hire key team members, such as a software engineer or a full-time chief financial or accounting officer, who may have otherwise been unaffordable or delayed in coming onboard.

–When philanthropic support is provided through a local business development initiative, a grant can provide ongoing funds that help create new businesses and jobs, whether for essential services or potentially breakthrough technologies. This type of investment is entrepreneurial on both the for-profit and nonprofit sides of the equation!

If you’re interested in reading more about entrepreneurs as philanthropists, you might enjoy specific topics such as making charity a habit, checking out a punch list of five ways to give back, and a few “oldie but goodie” perspectives that have stood the test of time.

By employing an entrepreneurial mindset, donors can envision and deploy their gifts as investments capable of helping charitable organizations scale to great success and make a real difference in the quality of life for the people they serve. The community foundation is always happy to discuss various ideas and strategies to leverage entrepreneurial principles in your charitable giving, whether or not a donor or fund holder is an entrepreneur. We appreciate the opportunity to work together!


It’s (always) a great time to review your estate plan and legacy gifts

Don’t forget that August is National Make-A-Will month. Even if your estate planning documents are already in place, this is still a good time to review your will, trust, and beneficiary designations to ensure that they still capture your financial and family situation, as well as your intentions.

It’s hard not to be inspired by the incredible stories of generosity that no one saw coming. Every year, many nonprofit organizations receive estate gifts that they had not expected. Stories about these donors are heartwarming! (And, though not a bequest, we’re all inspired by extraordinary anonymous gifts!)

Remember, your fund at the community foundation can be an ideal recipient of estate gifts through a will or trust, or through a beneficiary designation on a qualified retirement plan or life insurance policy. Bequests of qualified retirement plans–such as your IRA–can be extremely tax-efficient. This is because charitable organizations such as the community foundation are tax-exempt. This means the funds flowing directly to a fund at the community foundation from a retirement plan after your death will not be reduced by income tax. This also means the assets will not be subject to estate tax.

The community foundation makes it easy for your attorney to draft bequest terms in legal documents, including beneficiary designations of retirement plans and life insurance policies. Please contact our team for the exact language that will ensure alignment with your intentions.

Keep in mind that even after you have executed estate planning documents or beneficiary designations, in many cases you can update the terms of the fund at the community foundation designated to receive the bequest upon your death. You will love the ease and flexibility!

We look forward to hearing from you and your advisors as you update your estate plan to ensure that your community legacy is intact!

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 

Donor Connection – July 2023

Hello, and thank you for being part of the community foundation!

We are hearing from many of you that philanthropy and charitable giving have been topics of your conversations this summer with family and friends. That’s music to our ears!

As you gather around the dock, patio, or barbecue, we encourage you to think about ways you’d like to finish the year strong to further your charitable goals. Big or small, your goals are important to us. Some of you may be setting a goal to establish your donor-advised or other type of fund with the community foundation before 2023 wraps up. Others who already have a fund at the community foundation may have set a goal to learn more about how to involve your children and grandchildren in your charitable giving plans. Some of you may be exploring making a planned gift to your fund at the community foundation to further your legacy for generations to come.

Whatever your charitable giving goals, the community foundation is here to help. In that spirit, this newsletter features topics that we hope will help you refine your goals and celebrate your successes in your support of your favorite causes.

Here’s what we’re covering:

  • How regrets can actually help you grow your charitable giving
  • What’s really going on at the intersection of NIL money, college sports, and tax benefits
  • What you might consider reading and reviewing as you evaluate your 2023 charitable giving plans

Thanks so much for being part of the community foundation.

Wishing you all the best,
Your community foundation


Unlock the unexpected power of regret to grow your charitable giving

Did you know that the community foundation provides “regret mitigation” services? We’re only half kidding!

Not surprisingly, financial regrets are common, with those related to personal finances among the most frequent. Of recently surveyed American retirees, 75% wish they’d started saving earlier, and 62% wished they’d saved more money for their golden years.

On the personal side of the equation, people frequently also regret failing to show kindness when someone was in need. These types of regrets can be uncovered in the flipside of the well-documented motivations for giving in the first place. In short, people want to help others and, upon reflection, they often regret not doing so.

The topic of regret is getting a lot of play. In his 2022 book, The Power of Regret: How Looking Backward Moves Us ForwardDaniel Pink describes the results of his years of research on human regret. Pink identifies different types of regret and offers readers the perspective that not all regrets need to act as negative forces if they inspire you to behave differently moving forward.

The experienced team at the community foundation can help you avoid charitable giving regrets, especially by making it easy for you to activate your charitable intentions in the most tax-effective ways possible to make an even bigger difference in the causes you care about.

For example:

Get organized with a donor-advised fund.

If you’ve already established a donor-advised fund at the community foundation (or if you are considering doing so!), you know that the community foundation handles all of the logistics, including providing 501(c)(3) status for your fund so that your contributions are tax deductible, facilitating your contributions to the fund in the form of cash or stock, processing disbursements to your favorite charities, and handling all of the necessary tax documentation. A donor-advised fund makes it so much easier to organize and maximize your charitable giving.

Grow your philanthropy through planned giving.

In many cases, the community foundation can help identify ways you can support your favorite charities at even higher levels than you thought possible by deploying planned giving techniques such as bequests and charitable remainder trusts. Designating your fund at the community foundation as the beneficiary of your IRA, for example, is especially powerful.

Rally other fund holders and donors.

If you’ve established a field-of-interest or designated fund at the community foundation, don’t forget that you can rally friends and family to join you in growing that fund. Philanthropic individuals and families are often open to new ideas about where to invest their charitable dollars. Many people look to the community foundation as a point of validation that the IRS’s boxes have been checked and for peace of mind knowing that the fund is benefiting from both the oversight and advocacy of a dedicated community institution. What’s more, it’s rewarding as a fund holder to get to know other fund holders and donors who are involved with the community foundation and who also want to explore ways they can support the various funds featured in the community foundation’s marketing materials and on its website.

If you’re wishing you’d been able to do more for your favorite causes earlier in your life, there’s no need to hold onto those regrets! The community foundation can help you build a charitable giving plan to reflect a lifetime of strong commitment to the organizations in our community. We look forward to working with you!


NIL collectives: A cautionary tale about private benefit rules

In recent years, universities and their donors have organized what are known as “NIL collectives” to develop revenue opportunities for college student athletes’ “name, image and likeness.” The NCAA approved its NIL policy on June 1, 2021, and during the first year of the policy alone, college athletes collectively earned more than $900 million from NIL payments.

Donors to higher education athletics have rallied around these opportunities to make what many thought would be tax-deductible contributions to fundraising entities established by universities to grow college NIL programs. Not so fast, said the IRS in a May 23, 2023 memo: many NIL collectives are not tax-exempt organizations after all.

The problem with NIL collectives, according to the IRS, is that they are organized for a “substantial nonexempt purpose.” In other words, these collectives serve the private interests of student athletes in ways that are more than simply “incidental” to any charitable purpose or public benefit.

Although the IRS issued its recent commentary in a “general legal advice memorandum,” which is non-binding, this development is nevertheless still important in sorting through the tax issues surrounding NIL-related activities. What’s more, the IRS’s May 23, 2023 memo appears to reflect a change of opinion from guidance issued previously. To be sure, the discussion is not over yet.

Regardless of where the law ultimately lands on its treatment of NIL collectives, the IRS’s advice memo is a terrific reminder that public versus private benefit is at the core of an organization’s ability to achieve and maintain exempt status. A long-standing IRS doctrine for ensuring that 501(c)(3) organizations truly serve the public good, the concept of “private inurement” pops up occasionally to remind those involved with charitable giving that the IRS takes this seriously. Simply put, tax-deductible dollars cannot be used for private benefit. The whole point of the charitable tax deduction in the first place is to incentivize taxpayers to use their own money to help others. Organizations that attempt to benefit from tax-exempt status while also providing non-charitable benefits to individuals or businesses stand to lose their exemption altogether. You can’t have your cake and eat it too!

As always, that community foundation is here to help you navigate charitable giving in all of its forms, whether you are supporting your alma mater, local social services organizations, the arts, or other causes near and dear to your heart.


Summer reading picks

Why do people give?

A recently-released report identified the primary tenets of generosity according to Americans: how they define it; what it means to them; where their generosity comes from; its importance to society and their expectations. The report also identifies different donor types and how generosity is reported on in traditional media and social media channels.

 

More big donors

The most recent “Who’s Who” additions to the Giving Pledge, where wealthy donors pledge the majority of their assets to charity, was released in June. Many of the additions to the list are from the tech sector, including the twin sister of a donor who took the pledge in 2022. In a rare reversal, another recent group member was removed from the illustrious list.

Qualified Charitable Distributions

Remember, if you have reached age 70 1/2, you may be eligible to make annual distributions from your IRAs up to $100,000 per spouse directly to a designated, unrestricted, or field-of-interest fund at the community foundation or other qualifying public charity. Called Qualified Charitable Distributions, or “QCDs,” these transfers count toward your Required Minimum Distributions (if you are subject to those rules) and avoid the income tax on those funds. Plus, those assets are no longer part of your estate at death, which avoids estate taxes, too.

Bunching

Keep in mind the benefits of deploying a “bunching” strategy to activate your present and future charitable intentions. By making gifts to your donor-advised fund, you can combine, or “bunch,” years of contributions up front into one giving year for contribution-year tax deductibility purposes, and then activate gifts year by year in the future to your favorite charities. This can be especially advantageous in high-income years and to exceed standard deduction thresholds.

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 

Donor Connection – June 2023

Hello from the community foundation!

Many fund holders regularly tell us that they enjoy the summer months as an opportunity to reflect on their charitable giving goals. This allows them to be ready when September rolls around to implement charitable giving plans prior to year end. As you think about your 2023 charitable giving goals, we invite you to consider how the community foundation can help you reach them.

In this issue, we’re providing insights to help our current fund holders, as well as those who are considering establishing a fund, reflect on what they’d like to accomplish during the remainder of the year. Our article about anonymous giving might prompt you to think about what level of recognition you prefer for your charitable giving and why you might be feeling that way. Our piece about charitable remainder trusts and charitable gift annuities, on the other hand, is more about thinking; we want to provide a few quick pointers on why you might consider one or the other. Finally, as always, we’re including a couple of suggestions for further reading if you’d like to stay up-to-date on what’s going on in the philanthropy world.

Enjoy the month of June! Thank you for the opportunity to work together! We are grateful!

Angie Tatro, CEO
Central Kansas Community Foundation

Recognition or anonymity: Which one’s for you?

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The community foundation is committed to working with you and your family to fulfill your charitable goals, whether those goals relate to making an impact, leaving a legacy, saving money on taxes, expressing gratitude, or a combination of objectives. If you have not yet established a fund at the community foundation (and even if you have!), it might interest you to know that a donor-advised fund or other type of fund not only offers flexibility to meet your giving goals, but also gives you options for recognition or anonymity, depending on your goals and preferences.

Many philanthropic individuals and families appreciate–and sometimes even seek–recognition for gifts to their favorite charities. In addition to feeling appreciated, donors give publicly for many other reasons, including knowing that their names can lend credibility to an organization and that their gifts can serve as an inspiration to other donors. The team at the community foundation also understands the perspectives of nonprofit organizations about anonymous giving. This means we can help you navigate your relationship with a favorite charity, which in turn allows us to help ensure that your intentions are achieved and the nonprofit’s mission is supported in the way you envision.

The community foundation carries out your wishes for recognition in a variety of ways. When you recommend grants to your favorite charities from your donor-advised fund, for example, the community foundation’s team typically will issue the grant checks to the charities noting that the gift is from your fund so that you receive the recognition. Sometimes, though, our fund holders have good reasons for wanting their support to be anonymous, whether because of modesty, religious convictions, avoidance of unwanted solicitations, or wanting to keep the focus on the charity.

Whatever the reasons you might prefer to give anonymously, whether from time to time or across the board, the community foundation respects your wishes and can help in a variety of ways.

–First and foremost, our team will listen intently to understand your charitable goals and interests and make sure that we are structuring your donor-advised fund, other type of fund, or series of funds to achieve your charitable giving and family philanthropy goals. Indeed, some individuals and families set up multiple funds to serve different needs, including the desire for anonymity for a portion of their giving but not all. Our team will be sure to ask clarifying questions to determine how best to structure your charitable funds to achieve your desired level of recognition. Do you prefer anonymity for every grant? Is there a threshold amount where smaller grants can be acknowledged? Does the restriction apply only to a public disclosure by the grantee, but the grantee organization is itself aware? We know these discussions can be delicate.

–You may wish to recommend that certain grants (but not all grants) from your fund be issued anonymously. The community foundation offers the ability to opt in to anonymity on a grant-by-grant basis. Also remember that no solicitations will flow directly to you; the community foundation handles all correspondence related to grants to nonprofits made from your fund.

–Remember that you can establish a donor-advised fund under a nondescript, less identifiable name, perhaps one that is generic sounding or honors ancestors who may have “seeded” the fund through a prior generation’s wealth transfer or inheritance. For example, you can select a name for your fund that is something less obvious than your own name. Instead of the “Sam and Vera Barker Fund,” for instance, you could name the fund the “SVB Fund,” “Desert Family Legacy Fund,” or something else. When the community foundation sends a grant check to a charity from your fund based on your wishes, the charitable recipient will see only the name of the fund, not your name.

–As always, with any fund (whether some or all of the grant making is anonymous) the community foundation’s code of ethics and operating principles mean that our team follows and enforces strict confidentiality. For example, we are careful about visibility and accessibility of donor information even internally, and we adhere closely to permissions and protections within the donor database.

–Finally, the community foundation does not disclose information about you or your fund to any third party, nor is detailed information available through a Form 990 filed with the IRS.

At the community foundation, we’re here to serve the greater good. We welcome all conversations about giving, and we gladly strive to honor the charitable giving preferences of our donors and fund holders to the fullest extent allowed by law.

More alphabet soup: QCDs, CRTs, and CGAs

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If you or a family member has reached the age of 70 ½, you might have heard of a tax benefit known as the Qualified Charitable Distribution (QCD), which allows you to direct up to $100,000 annually from your IRA to a qualified charitable organization (which includes a designated or field-of-interest fund at the community foundation). You don’t pay income taxes on the distribution, and, if you are required to take minimum distributions (RMDs) because you have reached the age of 73, the QCD counts toward your RMD.

One of the many components of a new set of laws known as “SECURE 2.0,” which was passed at the end of 2022, is a provision that expands the QCD by adding the opportunity for taxpayers to make a one-time $50,000 QCD transfer to a charitable remainder trust (CRT) or other split-interest gift such as a charitable gift annuity (CGA). This part of the new law is called the “Legacy IRA” provision.

Because of the new laws, many charitable-minded individuals and families are interested in learning more about CRTs and CGAs. CRTs and CGAs are similar because each provides an up-front tax deduction, a steady lifetime income stream, and a remainder gift to a charity, such as your fund at the community foundation, which will receive what’s left over at the end of the income term, such as your lifetime.

CGAs are often easier to establish than CRTs, especially if you plan to establish the vehicle with $50,000 or less. This makes the CGA an ideal tool to take advantage of the Legacy IRA provisions for QCDs noted above.

A CGA, like any other annuity, is a contract. You agree to make an irrevocable transfer of cash or assets to a charity, such as the community foundation. In return, the charity agrees to pay you (or a designated beneficiary such as a spouse) a fixed payment for life. You are eligible for an immediate income tax deduction for the “present value” of the future amount passing to charity.

The amount of income you can receive from a CGA is determined according to national standards, and it is based on “rate of return” assumptions that are revised from time to time based on what’s going on with interest rates.

By contrast, a CRT is actually a trust–a separate legal entity. To establish a CRT, you will work with your attorney to execute a trust agreement and also work with a person or entity (such as the community foundation) who will serve as the trustee. After you transfer stock or other property (ideally highly-appreciated assets) to the trust, you’ll receive an income stream from the trust based on a percentage specified in the trust document (and subject to IRS parameters).

The team at the community foundation looks forward to working with you and your advisors to determine whether a CGA or CRT might be a good fit for your charitable plans. For example, we will explore whether you already intend to leave gifts to charity following your death, discuss your income requirements while you are living, and review the types of assets you own and whether there is a particular highly-appreciated asset or assets (such as stock or real estate) that would make an ideal gift to a CGA or CRT to reduce your capital gains tax exposure.

As always, please reach out to the team at the community foundation whenever you or your advisors have questions about charitable planning techniques. We are happy to collaborate as you build your financial and estate plans to include support for your favorite charities and the community you love.

For further learning

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Different generations do things differently. This is not a surprise to those who have watched their parents, children, or grandchildren in action! Catch up on how generational differences flow through to charitable giving. In particular, note that the donor-advised fund is popular across generations, not just with Gen X and Baby Boomers. Plus, given the hands-on preferences of Millennials and Gen Z, the community foundation is uniquely situated to cater to these new philanthropists as they seek to make their own mark of positive impact on the world.

Have you ever heard a philanthropist say how hard it is to give money away? There is truth to that, especially, as this article notes, where grants from private foundations are concerned. This is yet another reason why so many individuals and families are turning to the community foundation to help them structure charitable giving vehicles and navigate the best ways to support the causes they love, including forgoing the private foundation altogether in favor of the more straightforward and tax-friendly donor-advised fund.

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. 

Donor Connection – MAY.2023

Happy May!

Springtime has arrived in our region! We hope you are enjoying the change in seasons and warmer weather.

In this newsletter, we’re covering three topics that have recently risen to the top of conversations with our fund holders.

Our first feature this month is an article about balancing your goals for giving while you are alive, with leaving a family and community legacy through charitable bequests. This is one of our favorite topics because the community foundation is uniquely qualified to help with your full range of charitable intentions.

Questions about Qualified Charitable Distributions continue to flow in. We’re taking a shot at clearing up the confusion; that said, we hope you’ll continue to call and ask questions about QCDs and everything else related to your charitable giving.

Third, we’re excited to dive deeper into the benefits of using your traditional IRA to fund your charitable bequests.

If you are already a fundholder at the community foundation, thank you! We hope you’ll continue to reach out to our team with questions and ideas about how you can deploy financial resources to achieve your charitable goals. If you’ve not yet established your own individual, family, or corporate fund at the community foundation, we encourage you to reach out to learn more.

Thank you for all you do. We are honored to work together.

–Angie Tatro, CEO Central Kansas Community Foundation


Have your cake and eat it too: A dual approach to charitable giving

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The change of seasons is often an opportunity to catch our breath and reassess. We’re done with taxes, really done with cold weather (hopefully), and feel a sense of renewal as our attention turns to gardening and other growth-oriented, warm weather pursuits. And, many of us are wondering how in the world it can already be May. Wasn’t 2022 just five minutes ago?

Soon enough, the seasons will change yet again. Just as springtime is limited, so is the time any of us has to build a legacy for our families and communities and make a difference through charitable giving. Planning–and acting–with a sense of urgency is helpful, given life’s unpredictability and the many good causes many of us want to support.

At the community foundation, we’re frequently struck by the number of fund holders and donors who enthusiastically embrace strategies for both lifetime gifts and bequests. Indeed, planning techniques for each frequently work hand in hand. We’re inspired by champions of the ”do it now” approach to charitable giving; sadly, many people never have the opportunity to watch their money in action. We’re equally inspired by the longstanding commitment to estate giving that has been a part of the culture of philanthropy in our country for decades.

So, how can you take action now to ensure that you will experience both the joy of seeing first hand the difference you’re making, as well as the joy of knowing that you’re leaving a legacy to further the community priorities you’ve supported your whole life? A donor-advised fund with a bequest provision, established at the community foundation, is a great solution for many donors.

Here’s how this works:

  • Donor-advised funds continue to be popular tools to help charitably-minded individuals organize their giving and support their favorite causes.
  • Because of the community foundation’s deep knowledge of our region’s needs and the organizations addressing critical issues, a donor-advised fund established at the community foundation is an especially useful vehicle.
  • If you are a current fund holder at the community foundation, or if you are considering establishing a fund, you already know that a donor-advised fund is easy to start and easy to use.
  • You’re also likely aware of the donor-advised fund’s tax benefits, in that you are eligible for a tax deduction in the year of the gift and then you can work with the community foundation to use the funds to support your favorite 501(c)(3) organizations over the long term.
  • What you might not know, though, is that the community foundation can work with you to include provisions in your donor-advised fund document to name your children or other family members as successor advisors to make recommendations following your death and you can provide that certain organizations or causes receive a portion of the grants each year after you’re gone.
  • In this way, a donor-advised fund is not only a convenient giving vehicle during your lifetime, but it is also flexible enough to accommodate your wishes for leaving a legacy after your death.
  • You can even name the community foundation itself to receive all or a portion of your donor-advised fund following your death.
  • Bequests to the community foundation help keep our institution strong to grow the philanthropy required for our area’s nonprofits to serve the community for generations to come and respond to the most critical needs at any given time–needs that are impossible to predict.

Remember, with the help of the community foundation, you can give publicly or anonymously. We can help you fulfill your giving instincts by acting as a secure, knowledgeable, and trustworthy facilitator. Our team personally knows–and regularly vets–hundreds of charities every year, and we can help you navigate the options for both local and international giving.

If you are a current fund holder at the community foundation, we look forward to working with you to include bequest provisions in your existing donor-advised fund documents. If you are not yet a fund holder, we’d love to work with you to achieve your goals for lifetime giving and leaving a legacy. Please reach out anytime.


QCDs: Clearing up confusion

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If you’ve been involved with the community foundation for a while, you’ve likely heard of the Qualified Charitable Distribution (“QCD”) because we mention it a lot. And with good reason!

If you are aged 70 ½ or older, it is well worth your time to investigate whether a QCD might be right for you. Actually, if you are not yet 70 ½ but know people who are, it is well worth your time to mention the tool to them! You will be doing them a great service.

Unfortunately, we hear from many donors and fund holders that they don’t understand how the QCD works. We totally get it. The QCD is a product of the Internal Revenue Code, after all, which does not always have the reputation for clarity. For starters, the name itself–Qualified Charitable Distribution–is long and not user-friendly.

If your head spins when you see the letters Q-C-D, here are two options for cutting through the complexity.

Your first and best option is to call us! The team at the community foundation is here to help. We talk with people like you about charitable giving techniques–including QCDs–literally all day long. We love this stuff. Reach out, and we will explain the QCD and help you figure out whether it could be useful to you or useful to a 70 ½-aged friend or relative.

If you are a DIY-type or love learning about tax techniques, here are a few quick bullets to help get your head around it:

  • You can make a QCD if you have reached the age of 70½, and as such you can direct up to $100,000 annually from your IRA to a qualified charity (which includes, for example, a designated, unrestricted, or field-of-interest fund at the community foundation).
  • If you’ve reached the age-73 threshold for IRS-mandated Required Minimum Distributions (RMDs) from qualified retirement plans, a QCD counts toward your RMD.
  • QCD transfers are not included in your taxable income.
  • QCDs are even more popular now that the $100,000 cap will be indexed for inflation under the new laws. Also, under the new laws, a one-time, $50,000 distribution to a charitable remainder trust or charitable gift annuity is now permitted.

Still clear as mud? Still curious? Just want to chat? Call us! We love working with you and welcome the opportunity.


Supersize your legacy: Stock to the kids, IRA to charity

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To say that the total dollar amount in Americans’ retirement accounts is massive would be an understatement. Accounting for 30 percent of all household financial assets, at the end of 2022 total retirement assets in the United States topped more than $33 trillion dollars, including assets in IRAs, defined contribution plans such as 401(k)s and 457 plans, pension plans, and annuities. IRAs topped the charts at $11.5 trillion–the most assets of any category.

The large balances in traditional IRA accounts (not to be confused with Roth IRAs) are partially due to the fact that many taxpayers have rolled over–tax-free–assets from their employer-sponsored qualified retirement plans to IRAs after retiring or changing jobs.

If you have one or more traditional IRAs, you’re probably familiar with the basics:

  • An IRA can have multiple beneficiaries following your death, and you can designate a dollar amount or percentage of assets.
  • You can change your IRA beneficiaries as often as you like, and beneficiaries can differ across your multiple IRA accounts.
  • If a beneficiary dies before you do, and you don’t change the beneficiary designation, the assets will be proportionately reallocated to remaining beneficiaries when you die.

Here’s a critical additional point that is often overlooked: Designating your fund at the community foundation or another charity as the beneficiary of all or a portion of your IRAs is extremely tax advantageous. If you intend to leave money to charity when you die, chances are that this technique is absolutely the best option if you own other assets, such as stock or real estate, to leave to your family members or other heirs.

Why is it so beneficial to leave your IRA to charity and other assets to your family? Three words: taxes, taxes, and taxes.

  • First, IRAs are included in your estate for federal estate tax purposes when you die. The current exemptions are set at such high levels right now that they do not affect as many taxpayers as they used to, but for many families, estate taxes are still an issue. If you leave your IRA to charity, estate taxes do not apply to that balance.
  • Second, the bulk of the balance in an IRA (sometimes the entire amount) is counted as income when IRA withdrawals are taken by your estate or your heirs. If a charity receives your IRA, the charity will not pay these income taxes.
  • Third, highly-appreciated stock and other non-retirement assets you own outside of your qualified retirement plans when you die get a “step up” in basis, meaning that your beneficiaries who receive and then sell the assets won’t pay capital gains tax on the appreciation that occurred before you died. And, inherited, non-retirement assets are not included in the beneficiary’s income for tax purposes.

The bottom line here is that if you are choosing between stock and an IRA to leave one to your children and the other to charity, leaving the IRA to charity and the stock to your children is a no-brainer.

Have questions? Please reach out to the team at the community foundation. We are happy 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 newsletter 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.

Donnor Connection – April 2023

Hello from Central Kansas Community Foundation!

We hope tax season has treated you well! We know it’s a busy time for our fund holders, and we’ve appreciated hearing from you in these early months of the year. We’re also encouraged by how many of you who are not yet fund holders have reached out about getting started with the community foundation. There are so many ways we can work together, ranging from helping you set up a donor-advised fund at the community foundation so that you can better organize your giving, to helping you and your family dig deeper into the community issues that interest you.

In this issue, we are taking a step back to explain RMDs and QCDs. We field so many great questions from fund holders about how these two concepts work together in the context of IRAs and charitable giving, so we are offering up a longer article to walk through the points one at a time.

You will also see that we are building on the theme of tax time as a great point in the year to solidify your charitable giving plans, and we are touching on three hot topics to keep you up to date on what’s going on in the charitable giving world.

Thank you for the opportunity to work together! We are grateful!

–CKCF

Boiling down the alphabet soup: What actually are RMDs and how do they relate to QCDs?

If you get cross-eyed when you start reading about Required Minimum Distributions (RMDs) and Qualified Charitable Distributions (QCDs), you are not alone! And, given the December 2022 passage of SECURE 2.0 legislation, changes to RMD rules are especially important to understand if you are involved in charitable giving and have reached the age of 70 1/2.

What is an RMD in the first place?

A little history may help here. RMDs date back to 1974 when the Employee Retirement Income Security Act (ERISA) was enacted to provide for pension reform and to offer a retirement savings vehicle to non-pensioned workers through vehicles referred to as “qualified retirement plans” that are allowed to grow tax-free while assets are in the plan.

By requiring that a taxpayer start taking distributions from qualified retirement plans when the taxpayer reaches a certain age, the United States government is able to start collecting tax revenue on these “required minimum distributions” from assets that have grown tax-deferred for all those years and decades.

Now here is where we get into the weeds. The distributed amount of the RMD is reported by the plan administrator on IRS Form 1099-R (but–and here’s a nuance–not if the RMD was “satisfied” by a Qualified Charitable Contribution [QCD]—see below!). A taxpayer enters this amount on Line 4B of the Form 1040 Federal income tax return, and, of course, the amount is included as taxable income for the year it was distributed. So, the net-net here is that RMDs add to taxable income but not in the case of direct transfers to qualifying charitable organizations (the QCD).

What types of accounts require RMDs?

For 2023, account owners aged 73 and older who participate in qualified retirement plans such as these are subject to RMDs:

Traditional IRA

Simplified Employee Pension (SEP)

SIMPLE IRA

Employer-sponsored 401(k), 430(b) or 457

Once begun, RMDs occur annually, until account depletion or the owner’s death. (Note that distributions must also be taken from inherited IRA accounts, though under different rules.)

How is the RMD amount calculated?

A qualified retirement account’s entire balance is considered for calculating an RMD calculation, although of course only a fraction of the balance must be distributed each year. Unfortunately, the distribution amount is not easily or consistently determined. This contributes to some retirees’ confusion about RMDs and the requirements. Online RMD calculators can be found here or here, and your retirement account administrator can provide guidance.

When do the RMDs start?

That’s tricky, too! For years 2023 – 2032, the start date is your age-73 calendar year. For example, a 1955-born account owner would begin in 2028. Beginning in 2033, it’s your age-75 calendar year. Account holders born in 1960 enjoy a sort-of “two-year extension,” given that they would turn 73 in 2033. But since the age-75 provision begins January 1, 2033, their RMD begins in 2035.

For all account owners, the big benefit of the now-later RMDs comes from retaining account balances longer. You avoid adding unnecessarily to your taxable income and therefore reduce the risk of bumping to a higher tax bracket. Prior to SECURE Act increases passed in 2019 and 2022, RMDs began at age 70 ½ and age 72. So taxpayers can now enjoy a few more years of tax-free investment growth.  

How charitable taxpayers can check the RMD box with a QCD

Here’s where the QCD comes in (finally!) Now, armed with an understanding of how the RMD rules apply to your situation, you can begin to see how the QCD can provide a huge benefit if you own IRAs. QCDs are truly taxpayer and charity-friendly vehicles.

For starters, you can start making QCDs at age 70 ½–well before you’ve reached the age when you’re required to take RMDs. A QCD happens when you direct a distribution from an IRA of up to $100,000 annually (or $200,000 if you file tax returns jointly) to one or more qualifying charitable organizations, including a designated, field-of-interest, or unrestricted fund at the community foundation. While the QCD is itself not tax deductible per se, the overall effect of the QCD is to lower your taxes because the QCD counts toward your RMD but, unlike an RMD, it is not included in your taxable income.

The bottom line? If you have reached the age of 70 ½, own an IRA, care about charitable causes, and don’t need a full RMD income to cover your living expenses, reach out to the community foundation to learn how a QCD could work beautifully for you.

 

‘Tis the season: Why tax time is often the best time to get serious about your charitable plans

Though often unappreciated, the annual passage of tax season has benefits.

For one, it offers some finality to the prior year in that we finally know if we owe or are due a refund. For example, for the 2021 tax year, the IRS processed 88 million refunds averaging $3,039 each. Simultaneously, filing a 2022 tax return often comes with finalizing quarterly tax estimates for 2023, which many people use to build a framework for current-year spending.

Fortunately, charitable giving ranks high on many “how to use your refund” lists. Whether you have “bonus” money in the form of a refund or gain some peace of mind by knowing your upcoming tax obligations, giving intentionally and strategically always helps that gift go further.

Unfortunately, though, strategic and intentional giving may get lost when gifts to charity are made through a quickly mailed check or an online payment in response to a phone solicitation, television ad, mailer or online advertisement. The community foundation, however, offers remedies for this!

Lean into intentionality

Many donors give to the same causes annually, with causes tied to faith, health and community ranking high among charitable giving trends. Recently, gifts involving food or home insecurity, natural disasters and international conflicts have become increasingly popular.

Most important is to give to causes that are near and dear to you and for which you can see the ways your giving is contributing to meaningful, positive change in the lives of people in our community. And if you can add to your current list of beneficiary organizations to achieve meaningful impact, all the better.

The community foundation is a knowledgeable source of ideas, best practices, and data-driven approaches to helping you measure your impact. Our team can be especially helpful if you have a cause in mind but may not immediately have an organization name or local chapter to support. Our team has vetted and even pre-qualified many worthy organizations, and as a bonus, offers security against sending gifts to scammers or bad actors who often start or perpetuate their deceit by using familiar-sounding names of well-known organizations or websites.

Level up your strategy

Now that you’ve identified budget targets for your charitable giving and have a strong sense of the causes you’d like to support, structuring your gift for maximum impact and tax savings should be a top priority.

If you already have a donor-advised fund at the community foundation, you know that this vehicle has many benefits, including ready access to our staff of experts; the convenience of jumping online to supporting favorite causes from your fund; the ability to maximize a gift with accompanying tax benefits; and even the opportunity to schedule a gift to coincide with the occasional matching campaign hosted by a favorite charity. With full tax deductibility in the year of the contribution, donor-advised funds are an ideal way to “mentally offset” current year tax estimates that become known in April. If you don’t yet have a donor-advised fund at the community foundation but are considering it, this may be the perfect time to jump in.

With these tips in hand, and with the help of the community foundation, you can better plan for the tax year ahead, knowing that causes important to you, whether legacy or new, will benefit from your generosity.

 

Popular topics: Banking fall out, proposed legislation, and new stats on volunteerism 

Not a day goes by at the community foundation without our team talking with fund holders–and potential fund holders!–about philanthropy in our community and all the ways charitable giving can make life better for everyone who lives here. Recently, we’ve noticed an uptick in interest on a few important topics.

Ripple effects of banking’s bumpy road 

Understandably, our team has fielded a lot of questions from fund holders working with their advisors about transferring bank and especially tech stocks to their donor-advised or other funds at the community foundation. Although the current market climate may be rough, we are nevertheless encouraged by evidence suggesting that technology is increasing the opportunity and efficiency of charitable giving overall, and certainly we are hearing about (and talking with) more and more donors who are deploying their business and financial success toward charitable initiatives. Silver linings do indeed appear to be a real thing!

Tax perks on the horizon?

It appears that there may be renewed hope for non-itemizers to be able to deduct at least a portion of their charitable gifts. As you and other charitable-minded taxpayers are undoubtedly aware, because of the higher standard deduction passed as part of the Tax Cuts and Jobs Act of 2017, tens of millions fewer households itemized their deductions, leaving many nonprofits with shortfalls in projected donations. In addition, a “universal charitable deduction” may be back in play.

Generational factors can impact charitable behavior

Many fund holders at the community foundation regularly involve their children and grandchildren in philanthropic activities, including attending community foundation events together and meeting with our team to explore giving opportunities and assessing impact. It may interest you (but it may not surprise you) to learn that studies continue to point out generational differences in approaches to charitable giving. Recently, for example, research has shown that volunteerism and related behaviors are shifting, making it difficult for some charities to build and maintain volunteer programs.

We look forward to working with you and your family this spring to set in motion your charitable goals for 2023! Please reach out anytime.

Donor Connection – March 2023

Hello from the community foundation!

Thank you for the opportunity to work with you!

In this newsletter, we’re addressing three common myths about private foundations and donor-advised funds. It may surprise you to learn more about the differences between these two vehicles and how they can work together as part of your overall philanthropy strategy developed with the help of the community foundation team. We’re also covering ways you can focus your philanthropy, as well as offering a couple of resources for going deeper into philanthropy trends such as disaster giving.

If you are already a fund holder at the community foundation, thank you! If you are considering setting up a fund, we appreciate your consideration! It is our pleasure to serve charitable individuals, families, and businesses through donor-advised funds, field-of-interest funds, scholarship funds, and unrestricted funds. We are here to help you achieve the charitable goals that are important to you. Please reach out anytime!

All the best for the month of March!


Private foundations and donor-advised funds: Debunking three myths

If you’ve been involved with charitable giving for a few years, you’ve no doubt become familiar with both private foundations and donor-advised funds and their popularity as charitable giving tools. As is often the case with tax and estate planning-related topics, the differences between private foundations and donor-advised funds are sometimes the subject of confusion and misunderstanding.

As you work with your advisors and the team at the community foundation to establish your immediate and long-term charitable giving plans, take a few minutes to check out how to debunk these three common myths.

Myth #1: Donor-advised funds are all the same and only private foundations can be customized

Private foundations will always differ from donor-advised funds in important ways not only because of their status as separate legal entities and the deductibility rules for gifts to these entities, but also because of the opportunities to customize governance. But it is a mistake to think that a donor-advised fund is a cookie cutter vehicle. Indeed, “donor-advised fund” is simply a term used to specify the structure of a fund and its relationship with a sponsoring organization such as a community foundation. The donor-advised fund vehicle itself is extremely flexible.

–Donor-advised funds are popular because they allow a donor to make a tax-deductible transfer of cash or marketable securities that is immediately eligible for a charitable deduction. The donor can recommend gifts to favorite charities from the fund when the time is right.

–A donor-advised fund at the community foundation is frequently a more effective choice than a donor-advised fund offered through a brokerage firm (such as Fidelity or Schwab). That’s because, at a community foundation, you and your family are part of a community of giving and have opportunities to collaborate with other donors who share similar interests.

–The community foundation can work with you and your family on a charitable giving plan that extends for multiple future generations. That is because the team at the community foundation supports your family in strategic grant making, family philanthropy, and opportunities to gain deep knowledge about local issues and nonprofits making a difference.

As you explore the many opportunities to deepen your work with the community foundation, consider the unique mix of flexibility and services available to you and your family when you establish a donor-advised fund.

Myth #2: Deciding whether to establish a donor-advised fund or a private foundation mostly depends on size

The size of a donor-advised fund, like the size of a private foundation, is unlimited. The United States’ largest private foundations are valued well into the billions of dollars. (Information about private foundations, ironically, is not so private. The Internal Revenue Service provides public access to private foundations’ Form 990 tax returns. That is not the case for individual donor-advised funds.)

Similarly, donor-advised funds are not subject to an upper limit. Although information on the asset size of individual donor-advised funds is not publicly available, anecdotal information indicates that some donor-advised funds’ assets may total in the billions of dollars.

Indeed, a donor-advised fund of any size can be an effective alternative to a private foundation, thanks to fewer expenses to establish and maintain, maximum tax benefits (higher deductibility limitations and fair market valuation for contributing hard-to-value assets), no excise taxes, and confidentiality (including the ability to grant anonymously to charities).

The net-net here is that the decision whether to establish a donor-advised fund or a private foundation–or both–is much less of a function of size than it is other factors that are more closely tied to the objectives a donor is trying to achieve.

Myth #3: Donor-advised funds and private foundations are mutually exclusive

Many philanthropists and their advisors are aware of the many benefits of using both a donor-advised fund and a private foundation to accomplish their charitable goals. For example:

–Donor-advised funds can help meet the need for anonymity in certain grants, which is typically difficult using a private foundation on its own.

–A donor-advised fund can receive a family’s gifts of highly-appreciated, nonmarketable assets such as closely-held stock and real estate, and benefit from favorable tax deduction rules not available for gifts to a private foundation.

–An integrated donor-advised fund and private foundation approach can help a family balance and diversify its investment and distribution strategies to ensure that giving to important causes remains steady even in market downturns.

Some private foundations are even considering transferring their assets to a donor-advised fund at the community foundation to carry on the foundation’s mission. Terminating a private foundation and consolidating giving through a donor-advised fund is sometimes the best alternative for a family when the day-to-day management and administration of the private foundation has become more time-consuming than expected and is taking time and focus away from nonprofits, the community, and making grants. In addition, some families find that the tax rules related to investments, distributions, and “self-dealing” have become harder to navigate and are perhaps even preventing the family from maximizing tax benefits of charitable giving. Finally, the administrative load of managing a private foundation sometimes becomes overwhelming, especially if the family members who handled these functions initially have retired, passed away, or simply become busy with other projects.


Evaluating options for focusing your philanthropy

If you’ve been giving to favorite charities for many years, it will not surprise you to learn that most donors are interested in deepening and focusing their impact as they maintain the frequent and total amount of giving.

Focusing on impact is hard, but it’s easier when you work with the community foundation and follow best practices for making grants to favorite causes. The community foundation’s expertise can be invaluable to you and your family as you pursue your charitable goals.

Here are three suggestions for refining your giving strategies to support your favorite causes.

Educate yourself. 

Learn about best practices that are emerging in the growing field of philanthropy. You can discover various philosophies that can drive charitable giving and gain insights from examples of what other philanthropists report has worked well and not so well. Working with the community foundation team is an excellent way to gain access to the most up-to-date research and resources on making an impact, including ways to make decisions with your partner or involve your family.

Follow your heart.

Your charitable giving is going to be most effective when you support the causes you truly care about. You’ll be more committed and better able to focus on impact if you experience the psychological rewards of providing financial support to organizations that align with your personal beliefs about how quality of life can improve for people in the community.

Seek information.

Information about nonprofit organizations is widely available to you through several online sources, including being able to access nonprofit organizations’ tax returns to see detailed financial data. As you do your online research, consult the team at the community foundation. We are happy to interpret the information available online and provide important context for the meaning of that information as it relates to the actual work of the nonprofit organization and the ways you are supporting it.


Go deeper

Many donors are continuing to support relief efforts in Ukraine, as well as exploring how to help the victims of the earthquakes in Turkey and Syria. The team at the community foundation is happy to help you balance your desire to meet the most critical needs in our local community while also supporting international relief efforts. Please reach out anytime. Our team is also happy to share insights about what’s trending in philanthropy overall, including best practices in disaster giving. We are here to help you achieve your short-term and long-term charitable goals and work with you and your advisors to do so in the most tax-effective manner.

Donor Connection – February 2023

Hello from the community foundation!

We are excited that 2023 is in full swing. Our team appreciates the many opportunities already this year to talk with those of you who are current fundholders, as well as those of you who are considering becoming fundholders. We look forward to working with current and new donors through donor-advised funds, field-of-interest funds, scholarship funds, or unrestricted funds at the community foundation to achieve the charitable goals that are important to you and your family.

Our update this month covers the importance of local giving, trends in corporate giving, and tips to keep top of mind as you, your family, and your advisors work together to pursue your philanthropic priorities.

Happy February! Thank you for the opportunity to work together.

Angie Tatro, CEO

Community foundations: Unparalleled resources for local giving with major impact 

As economic times get tough, more and more people are asking how they can make the biggest difference right in their own backyard. Indeed, local giving is a topic that has even made its way into the opinions of the mainstream media, causing many charitably-inclined people to pay more attention to the impact their dollars are having on the causes they love.

Sometimes the greatest needs really are right here at home. As donors explore charitable giving opportunities and receive requests for funding from charities near and far, it can be helpful to read first-hand accounts of why other philanthropists have been so inspired by uncovering local needs that they simply were not aware of.

Over the years, researchers have consistently validated the important emotional elements of giving to familiar and nearby organizations to foster the rewarding sense of connection that is such an important driver of repeat philanthropic behaviors. Today’s donors want to be able to actually see the results of charitable investments.

Here are three suggestions for anyone who wants to get started on a “give local” journey.

First, scan the local news. Many people are very accustomed to scrolling the news feeds on phones and catching the national and international headlines. Local news can be hard to find, but those outlets do still exist! In particular, many television stations’ websites include a local news tab. Spend five minutes scrolling through the local news for three days in a row, and you might be surprised at how much you learn about your own community. Make a mental note of issues that raise your eyebrows or make you ask yourself “I hope someone is doing something about that.”

Second, with this research in hand, run a few quick Google searches with the key words you’ve identified, along with the terms “nonprofit,” “charity,” and the name of your town or city. Sometimes these searches will illuminate organizations you might have heard of or even be involved with already. At the very least, you will begin to frame your own description of the local causes you care about.

Third, reach out to the team at the community foundation. The community foundation’s mission is to improve the quality of life in our region, and that is possible through the work of nonprofit organizations and people like you who support them. The community foundation team will know which nonprofits are addressing the issues you’d like to learn more about and can provide advice about how your charitable dollar can make the greatest possible difference.

The community foundation is unparalleled in its ability to be flexible and responsive, providing outstanding, personal service designed around your needs while at the same time working closely with legal, tax, and wealth advisors to ensure that you are maximizing the financial elements of your charitable giving plan.

We look forward to working with you to make as big a difference as possible in the causes you love and make our community an even better place for everyone.

Corporate giving: Amazon’s news, key trends, and a primer to kick off the new year

Since it launched in 2013, the Amazon Smile program has provided hundreds of millions of dollars to various charities. The program worked by allowing customers to identify a favorite charity in the customer’s Amazon profile. Then, Amazon would make a donation equal to 0.5% of each of that customer’s purchases for as long as the customer kept the designation in place. Amazon recently announced that it was shutting down the program, to the disappointment of a lot of people.

Because the program was so easy to use, many smaller organizations were successful in rallying their supporters to sign up for Amazon Smile and direct donations to the organization. The program was especially popular among youth groups and school-related charities where parental involvement made it easy to get the word out and secure sign ups.

For many, the news about Amazon Smile has sparked renewed interest in corporate philanthropy, not only in large businesses, but also in small, local businesses. How much should a business allocate for charitable giving? How should the company decide where to make its charitable donations? To what extent should employees be involved?

If the company you help lead, or even perhaps own, has a corporate giving program, it may be wise to give the tires a quick kick and evaluate potential tweaks. Certainly your company’s program is unlikely to be at the scale of Amazon Smile; still, with Amazon Smile’s demise in the news, you and your colleagues may agree that a refresh is in order. It could be time to dust off the research on corporate giving best practices and evaluate how those tried-and-true principles apply to your company’s community involvement today.

Here are three steps to consider as you discuss corporate giving with your colleagues, either formally or informally.

Check in on strategy and process, including basic communications guidelines

If your company doesn’t have a strategy or system for prioritizing sponsorship requests, charity event invitations, and requests for donations, you may want to consider putting this in place, whether it’s a simple verbal agreement among company leaders or something more formal such as a written plan. Sometimes, a charitable giving strategy is based on the owners’ values. Some companies seek employee input. Regardless, it is important to have at least a simple communications strategy for maintaining positive relations with the charities whose requests the company turns down, as well as requests from employees.

Consider structuring the program with an easy-to-use corporate donor advised fund

A corporate donor-advised fund at the community foundation can do wonders to help streamline the administrative load. All donations into and out of the corporate donor-advised fund are tracked in one place, making it easy to see which organizations have been supported historically. A corporate donor-advised fund also makes it possible for a company to plan ahead to be able to fully fund its charitable goals even in years when revenue is down. Reach out to the community foundation to learn more about how a corporate donor-advised fund could work for your company.

Make an effort to get the word out

Many companies are doing a lot of good, ranging from employee volunteer outings to canned food drives to monetary donations. Sometimes even employees are not aware of all of the charitable activities going on at their employer. Consider carving out 30 minutes every month to report on the company’s charitable endeavors, whether that’s simply an internal communication or a more public update on the company’s website or social media channels. Business owners and executives are often surprised at how much goodwill comes from simply celebrating the good the company is already doing.

As always, the team at the community foundation is here to help you and your company with its charitable giving program. We can help you set up a corporate donor-advised fund, assist your team with creating and operating a matching gifts program, set up disaster-relief workplace campaigns, establish donor-advised funds for executives and employees, collaborate on a philanthropic component of a business sale, and much, much more. There’s plenty to smile about!

In the news: Billionaire givers, QCDs, and celebrity inspiration

This month, we’re offering three suggestions for deeper reading on current topics in charitable giving.

Bring out your inner academic with this blog post published by the Lilly Family School of Philanthropy at Indiana University, especially if you’re interested in the latest chatter and variety of opinions on so-called “billionaire philanthropy.”

If you’re contemplating charitable giving in your retirement years, read this Kiplinger article to brush up on the Qualified Charitable Distribution (QCD), recently enhanced by late-2022 legislation. We totally understand that the first (and second, and third) time you read about QCDs, your eyes may glaze over, but the concept really is worth understanding. Contact the team at the community foundation. We are happy to break it down for you in English!

Finally, it can be reassuring to see high-profile individuals (Idris and Sabrina Dhowre Elba, for example) speaking up about their philanthropic values. In a world where so much needs to be done to improve lives and respect humanity, role models offer hope that philanthropy and community involvement can be important factors in progress.

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.