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. 

Donor Connection | January 2023

Stay the course: Intentional philanthropy is critical in a downturn

Your family may be among those who are taking their charitable giving budgets more seriously this year, given the stock market’s challenges, rising interest rates, economic concerns, and anticipated cash crunches.

At the same time, not surprisingly, community needs tend to rise during uncertain economic times. As 2023 gets into full swing, inflation, housing challenges, and economic uncertainty are pressuring people who are already vulnerable due to financial insecurity, illness, or disability. Nonprofit organizations serving these populations need additional resources—and even more support from charitable giving—to meet the escalating demands.

A budget has benefits

Here are a few steps to consider in building a 2023 budget for charitable donations that can help you continue to support your favorite causes and remain fiscally cautious.

–Review all your charitable donations from the last three years and compile totals for each organization. This can be an easy exercise for people who use a donor-advised fund at the community foundation because the data can typically be pulled directly from the community foundation’s donor portal or requested from the community foundation’s team.

–Carefully review the list of organizations you’ve supported over the last three years. Regardless of your donation levels, which are the most important to you? Are you serving on the board of directors of any of these organizations? Do you regularly volunteer at any of them? Is there a personal connection?

–Are there any organizations on your list that you supported primarily because the organization was raising money for a capital campaign, or because you were helping out a friend who is involved with that organization? These may be organizations to possibly put on hold and then revisit supporting in future years when the economy picks back up.

–Add up your total giving over the last three years and then divide it by three to get your average. Is that number doable this year? If not, reduce it to a level that fits within your financial situation to arrive at your tentative 2023 giving budget. Remember to consider the value of publicly-traded stock gifts you could make this year if preserving cash is a priority.

–Consider whether to keep certain organizations at historic levels of giving, such as those you’re personally involved with. Or on the flip side, you may decide to temporarily reduce your level of giving to organizations for which you are providing other types of support, including volunteering or board service.

–Review the list to see if there are any organizations you’ve supported that you’d like to learn more about. The team at the community foundation is extremely knowledgeable about nonprofits in our region and would be happy to provide information on how a particular organization spends its money and how it measures impact.

–Finally, do the best you can to set targets for the amount of support you’d like to provide to each organization—and perhaps even set targets for the timing of your gifts. You can change these targets at any time, of course. The point here is that the planning and budgeting process is a great way to create more intentionality around your giving. Intentional giving is not only more rewarding for you but is also likely to increase your level of engagement with the recipient charities and enhance your understanding of how dollars are being deployed to meet the mission. This, in turn, helps your favorite organizations get better at carrying out their programs and serving those who rely on their work.

Consider taking a year-long view of your giving 

As compelling as year-end giving may be, perhaps even more compelling are the reasons for planning and launching a charitable giving strategy early in the year, starting with January. Benefits of a year-long giving strategy include:

–Helping nonprofit organizations meet their budgets all year long, which can save them from worrying as much about whether constituents’ ongoing needs can be addressed.

–Leveraging employer matching gifts programs early in the year when dollars are available and there is plenty of time to process the paperwork.

–Increasing predictability of cash flow and therefore being proactive, not reactive, in supporting the causes you love. You might even consider setting up automatic contributions to a donor-advised or other type of fund at the community foundation by working with your financial advisor to formalize this component as part of your ongoing plan.

–Taking advantage of plenty of time to learn more about the charities you plan to support so that you can be an even more informed and impactful donor, including fully utilizing the community foundation’s expertise and resources.

–Giving yourself time to include children and grandchildren in the charitable giving conversation as a learning experience for the whole family.

–If you are over 70 ½, being able to avoid the year-end scramble to process a Qualified Charitable Distribution (QCD) from your IRA directly to an eligible charity by executing a QCD in the first quarter.

–Leaving enough time to explore options for more complex giving tools that might provide tax benefits as well as meet your charitable goals, rather than waiting until the last minute when it may be hard to get on the calendars of your attorney, financial advisor, and accountant to map out the best strategy for your situation.

As always, the community foundation is here to help. Please reach out to our team to learn more about how you can make the biggest difference with your charitable dollars, including how you can use an existing or new donor-advised fund, or other type of fund, to carry out your 2023 charitable wishes. You’ll be glad you planned ahead to help your favorite organizations fulfill their missions throughout the entire year, as well as maximizing your own tax benefits and avoiding December’s crunch time.

Invest in impact built on trust

If you’ve supported a particular charitable organization for many years, and perhaps even served on its board of directors, you are likely familiar with some basic concepts of “trust-based philanthropy,” even if you didn’t know that’s what it is called.

As a devoted supporter of the nonprofit organizations you love, you know that an organization’s chances of success are greatest when the organization’s leadership and talented staff are able to deploy the organization’s resources in the ways they believe will best fulfill the mission. This, in turn, sometimes translates into the organization placing a high value on what are called “unrestricted” donations, meaning that the organization can use the dollars in whatever way it sees fit. An example of this, grossly oversimplified to illustrate the point, is when a donor writes a check to a food pantry and instructs that the money be used to purchase canned goods, but the food pantry’s leadership knows that what they really need at the moment is to fix the roof or hire a staff member to help with sorting food before the pantry will be in a position to accept more canned goods.

Unrestricted gifts are only one component of the overall trust-based philanthropy concept. The broader model is designed to increase the impact of philanthropy by encouraging collaboration, communication, and information-sharing among all stakeholders, including not only donors and the nonprofits they support, but also the community as a whole.

Trust-based philanthropy has become somewhat of an academic phenomenon, and it is not without some controversy. Still, the fundamentals make sense, such as listening to community stakeholders and lifting some of the administrative burdens on nonprofit organizations who receive funding.

Trust-based philanthropy is nothing new to the community foundation. In many ways, the community foundation’s mission already embodies these principles: Deeply understanding the needs of the community, building strong relationships across all stakeholders, helping donors maximize the value and impact of their charitable giving, establishing permanent support for the community to address whatever needs may arise, connecting donors more deeply to the causes they care about through personal service and education, and leading on critical community issues.

We look forward to working with you as you get even more involved with the causes you care about.

Ring in the new year with new charitable giving tax laws

If you’ve been tracking federal legislation, you’re likely aware that on December 29, 2022, President Biden signed a $1.65 trillion-dollar omnibus spending bill known as the Consolidated Appropriations Act of 2023 (“CAA”).

A component of this legislation, known as “SECURE 2.0,” includes many provisions that make it easier for people to build retirement savings, ranging from required enrollment in employer-sponsored 401(k) plans to larger “catch up” contributions to enable workers nearing retirement to add more to their retirement accounts each year.

Three of the new law’s provisions are particularly interesting to people who give to charities, especially related to a planning tool called the Qualified Charitable Distribution (QCD). Many charitable individuals who are 70½ or older have already been taking advantage of the QCD. This technique allows a taxpayer to make an annual transfer of up to $100,000 from an IRA to a qualifying public charity such as a field-of-interest fund, scholarship fund, or unrestricted fund at the community foundation. The taxpayer does not need to pay income tax on the distribution and, for taxpayers who must take RMDs from their retirement plans, the QCD counts toward that year’s RMD.

Here’s what’s new, thanks to SECURE 2.0:

More time to accumulate retirement assets

Under the new law, the required minimum distribution (RMD) age (previously 72) increased to 73 on January 1, 2023. RMDs are the IRS-mandated distributions from qualified retirement plans. The RMD age will further increase to 75 beginning on January 1, 2033. This provision is a boost to retirees’ financial plans and may mean more dollars available for charitable giving, especially in the form of a tax-savvy beneficiary designation of retirement plans to charity.

Note that the age for QCD eligibility is still 70½, and, still, donor-advised funds are not eligible recipients of a QCD.

“Legacy IRA” opportunity

SECURE 2.0 makes QCDs even more attractive because taxpayers may now 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). These components of the new law are called the “Legacy IRA” provisions.

Bigger QCDs

The annual per-taxpayer $100,000 QCD cap is now slated to be indexed for inflation, which will allow taxpayers to give even more from their IRAs directly to charity.

The team at the community foundation would be happy to talk with you about how the new laws can enhance your charitable giving plans. Reach out anytime!

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

Be Ready, Be Resilient

In late August, Central Kansas Community Foundation (CKCF) hosted a convening at Butler
Community College for affiliate leadership, community partners and other interested parties to
share information and opportunities associated with the most recent grant from the Funders
Network.

Presenters for the event included: Jeff Kohler, Mennonite Disaster Service, Cari Cullen, Center
for Disaster Philanthropy and Julie Stimson, Sedgwick County Emergency Management.

One important area of emphasis for the conversations that day was the emerging need for our
communities to be aware of marginalized populations who are under-served during a time of
disaster. Good conversations around diversity, equity and inclusion took place.

Represented affiliate foundations/communities learned about their eligibility for a $1,000 grant
to use for within their area to support this important work.

Grant awards will be used as follows:

Bethel College/North Newton CF
Invest in 22 emergency supply kits-Red Cross 3-day Emergency Pack for Bethe College residential halls which includes Haury and Voth Halls and Warkentin Court. Resident assistants in the buildings will be responsible for securing the supplies.

Butler County
Work with city managers in Butler County towns along with area landlords to collaborate on
increasing the number of renters in the county who hold renters’ and comprehensive auto
insurance. Utilize an informational campaign on multiple platforms to educate area renters on
the risks of being under-insured.

Elk County CF
Educate the community’s knowledge of emergency preparedness, response and recovery through distribution of an informational magnet with important contact details and a QR code that links to a website. Purchase a Heiman Viper Gallonage Nozzle for the Longton Volunteer Fire Department.

Goessel CF
Utilize the services of an engineer to explore the options for flood control and/or prevention in
the community of Goessel.

Halstead CF
Partnering with local organization, The Neighbors Store, the foundation will offer the opportunity for a pillowcase project for underserved populations. Supplies will include non-perishable items and a binder for essential documents.

Hesston College
Purchase six Bleeding Control Stations and five NOAA Weather Radios for placement in the residential areas of the college. Provide education to all students on proper usage of the new equipment.

Hesston CF
Partnering with Hesston Fire/EMS give community members with opportunity to create “GO BAGS” to be used by families in the event of a disaster. Bags will be backpacks that have File of Life documents, LED flashlights, phone chargers and water-resistant document folders.

Hillsboro CF
Working to enhance emergency preparedness in their community, the foundation will provide emergency site drone training and upgrade the body vests for law enforcement.

Newton CF
Partnering with the Harvey County Community Chaplain Response Team, the foundation will continue to grow their program for educating and supporting the Hispanic members of the community.

Peabody CF
Collaborating with students from the Peabody Middle and High Schools and the Peabody Fire Department, the group will work to clean curbs and paint house numbers on them for easier recognition by emergency responders.

Valley Center Police Department
Valley Center Police Department will purchase traffic barricades to assist during high traffic- pedestrian or vehicular-to keep citizens safe during a critical incident.

Wilson County
Partnering with Elk County, the Emergency Management department of Wilson County will provide a magnet with emergency information and a QR code. The public will have an opportunity to obtain the magnets at local partners, including city halls, libraries, senior centers and at community events.

Central Kansas Community Foundation (CKCF) has worked in partnership with the Funders
Network of Coral Gables, Florida for five years as a part of a cohort of community foundations in the Midwest to increase our understanding of the role that philanthropic partners, especially community foundations, play in disaster education, preparedness, response and recovery. Over the years we have received several generous grants from the Funders Network that CKCF has used to support our affiliate foundations in this important work.

2022 Annual Meeting

October 24, 2022: Central Kansas Community Foundation hosted its Annual Meeting. In attendance were CKCF and Affiliate Foundation Board Members, Community Partners, Charity Leaders and Other Friends. We celebrated with a toast for what has been and what is to come. Pictured below are those we recognized at the event.  You can also review the presentation given and read the fascinating success stories in our 2021 Annual Report. This event was hosted at the Wild Prairie Event Center in Newton, KS. 

ANNUAL MEETING PRESENTATION

2021 ANNUAL REPORT

 

 

Grant Writing 101

A Grant Writing Seminar was held  Friday, September 9th in partnership with Harvey County United Way. It was a huge success. The Porch venue in downtown Newton was utilized to host this well attended event of nearly 50 participants. Kaely Burgess with Health Ministries provided the presentation and did a phenomenal job. Her presentation included the importance of building relationships with funders, the art of storytelling, key dos and don’ts of grant writing, a process to vet requests for proposals, and funder research techniques. A lot of valuable information was shared by Kaely as well as participants in the room.

Newton Public Library Close to Goal

Newton Public Library Foundation, a CKCF affiliate, has reached 90 percent of its goal for the WHERE COMMUNITY CONNECTS Campaign to help construct a new Newton Public Library to benefit Newton and surrounding communities.

The campaign, with an October deadline, has a goal of $2.7 million to augment funding from the City of Newton and Newton Public Library for the $10 million project. The new library will be built adjacent to the existing library, and is designed to be a place for reading, learning, creating, and connecting. Features such as an updated children’s library, a dedicated teen area, private study rooms, an additional meeting room, and an indoor/outdoor seating area will provide an inviting space for traditional library experiences and new opportunities. By making the library accessible, up-to-date, and inviting, we can ensure that Newton Public Library can continue to provide quality service for generations to come.

LEARN MORE

DONATE TO THE NEW LIBRARY

If you wish to explore alternative ways of giving, please contact Angie Tatro, CEO, to learn more about IRA gifts, gifts of securities, tax credit opportunities and more. She can be reached at angie@centralkansascf.org or 316-239-9451.