Professional Advisors Professional advisors of all kinds – attorneys, accountants, estate planners, and others – play a vital role in helping grow philanthropy. The Eau Claire Community Foundation wants to be a resource for you as well as a philanthropic partner for your clients. You can learn more about: The Advisor's Role in Philanthropy An informed advisor should be prepared to talk with clients about charity. Why? A host of reasons: Many clients are already in the habit of charitable giving, so incorporating philanthropy into the planning process is a natural reflection of most clients’ values. For clients with substantial estates, minimizing or eliminating estate and income taxes is difficult to do without some charitable planning. Regardless of the status of the estate tax, charitable planning offers tax advantages in many other situations, such as the sale of highly appreciated stock and the disposition of retirement accounts upon death. Philanthropy can help resolve many personal issues that are deeply important to clients. In addition, many professional advisors find that assisting clients in this area is personally rewarding as well, because they struggle with the same issues. Despite the reluctance of many advisors to bring up the question of philanthropy, clients want help with their charitable giving and are looking for informed advisors. Good Advice Good charitable advice strengthens the client relationship by providing better service to the client and generating greater client loyalty. Clients expect to be referred to experts in charity, as they would to other specialists, like lawyers or accountants. Although the Eau Claire Community Foundation is a public charity, it does not promote one charitable cause. Instead, its mission is to build and hold a permanent and growing endowment, thereby helping your clients achieve goals in ways not available through other organizations. For a more complete discussion of the Foundation’s services, as well as some suggestions on how to raise the topic of charitable giving with clients, please contact the Foundation. Giving Through the Eau Claire Community Foundation Yes, giving through, not to. The Foundation is the tool through which your clients can connect with their favorite charitable causes. We’re here to help your clients achieve their long-term charitable goals. The Foundation consists of named funds established by many donors –individuals, families, corporations, and organizations – principally for the benefit of the Eau Claire area. But the Foundation’s work is as broad as the interests of the donors who have entrusted their philanthropy to us. So what should you ask a client interested in giving through the Eau Claire Community Foundation? What would you like to achieve? To give back to the community by creating an endowment to meet its future needs? To ensure that a favorite cause or organization will receive support far into the future? To find a way to involve family members in philanthropy? To remember a loved one in some way? How would you like to give? Let’s discuss the options: a lifetime gift, bequest, or deferred gift? With case, stock, real estate, retirement accounts, or other assets? The Foundation is a public charity, designed to offer the most favorable tax treatment possible for your client’s gift. Our professional staff will help you develop a meaningful, personalized giving plan tailored to your interests. Remember, the Foundation exercises strict fiduciary responsibility over all its assets and provides prudent stewardship of donor funds. Because gifts to a community foundation are pooled for investment purposes, your client will also enjoy the advantage of a diverse portfolio mix that minimizes risk and enhances the likelihood of a maximum return to charity as the gift grows over time. The Eau Claire Community Foundation does not offer legal advice to individuals regarding their estate plans. We encourage donors considering a bequest to the Foundation to work with their legal and financial advisors. Types of Funds The Eau Claire Community Foundation offers a range of different funds, providing flexibility in fulfilling your client’s charitable objectives. Whether she or he wants to benefit a community, a cause, or many charities, we can structure a fund to meet their needs. Acorn An Acorn fund is a starter fund that grows over time (with a maximum of five years to become fully funded). When contributions and earnings reach the minimum donation for the specific type of fund, granting can begin. Minimum of $500 to establish; amount to become fully funded varies. Designated Named A Designated Named fund allows donors to support their favorite nonprofit organization, church, or school forever. A single fund can support one or more charities, even specific programs of these charities. If the organization chosen eventually ceases to exist, the Foundation will redirect the fund’s income to another organization with a similar mission. Minimum of $500 to establish; minimum of $10,000 to grant. Donor Advised Donor Advised Funds allow individuals, families, and businesses to be fully involved in their philanthropy. Donors recommend grants to their favorite nonprofits, while the Foundation handles all the paperwork and administration. These funds offer many of the same benefits as a private foundation without the burden and cost. Plus, many of our fundholders appreciate the opportunity to tap into our knowledge of local issues. Donor Advised funds are especially useful for donors who want to take a charitable deduction in one year and recommend distributions over several years. Minimum of $1500 to establish; minimum of $25,000 to grant. (Please note that IRS regulations require the ultimate decision-making authority for the award of the grants to lie with the Foundation.) Field of Interest A Field of Interest fund allows donors to allocate their contribution for the benefit of one or more areas of interest. These include, but are not limited to, education, health, social services, the arts, or preservation of resources. Field of Interest funds are broad in scope, yet encompass many of the essential strengths and needs of the community. Minimum of $500 to establish; minimum of $10,000 to grant. Unrestricted An Unrestricted fund allows the donor’s charitable giving to have the greatest possible impact now and in the future. The Foundation is authorized to allocate gifts to a variety of programs and services, giving the most flexibility in responding to emerging needs and opportunities in the community. Minimum of $500 to establish; minimum of $10,000 to grant. Scholarship Scholarship funds are dedicated to the continued education or training of children or adults. Scholarship programs may be designed to meet certain specifications, such as supporting students in a specific area of study, rewarding academic achievement, mitigating financial need, or supporting students from a particular high school. The Eau Claire Public Schools Foundation supports the Eau Claire Area School District scholarships. Minimum of $500 to establish; minimum of $10,000 to grant. Some restrictions apply. Other types of Funds at ECCF Agency Endowment Agency Endowment funds allow charitable organizations to establish endowment funds within the Foundation rather than create and manage such a fund themselves. This type of fund generates a predictable stream of income while the rest of the investment grows into perpetuity, so that the nonprofit can use the earnings from the fund to offset their operations forever. Minimum of $500 to establish; minimum of $10,000 to grant. Municipal Municipal funds are established by municipalities for a specific purpose. These charitable funds can help provide income for operations and maintenance of public facilities and programs. Minimum of $500 to establish, minimum of $10,000 to grant. Pass-Through Pass-Through funds are a short-term fund that supports a specific purpose or project which will benefit our community forever. Minimum of $500 to establish; minimum of $10,000 to grant. Some restrictions apply. Supporting Organization A supporting organization (also known as a “supporting foundation”) is a 501(c)(3) charitable organization formed to support the work of another charitable organization. It is a distinct legal entity affiliated with the Eau Claire Community Foundation’s purposes and operations. If your client prefers not to start a fund Clients can donate to any fund at the Foundation except for an Agency Endowment Fund. Donations to these two funds are particularly appreciated because they support the entire community: Community Fund The Community Fund benefits the Eau Claire area as a whole. It enables the Eau Claire Community Foundation to respond to changing community needs and emergencies, to support innovative solutions to community problems, and to enhance the quality of community life. No restrictions are placed on how this fund may be used, leaving the most effective charitable application to the expertise and discretion of the Foundation’s Board of Trustees. Operations Fund The Operations fund provides operational support for the Foundation. Support of the Operations fund makes a lasting impact on the community by providing resources to expand the mission of the Foundation. For more information about how to donate to the Community Fund, please consult the Ways to Give page. Confused by all the different types of funds available? Let this simple chart make life easier by comparing the types of funds. Assets Accepted Comparing the ECCF with Other Giving Vehicles Selecting the right charitable giving vehicle for a particular client involves many variables, including how much money is available for charitable giving, whether family members are available as volunteers, and the client’s need for operational control. According to the Internal Revenue Service, over 105,000 private foundations were registered with the federal government in 2006. More than 60% of U.S. private foundations have assets of less than $1 million. Chances are good that a private foundation was not the best option for all of these donors, but the donors may have selected a private foundation because they were not fully informed about the alternatives. ECCF v. Private Foundations The vehicles most often considered are a private foundation and a donor advised fund. To offer your client the best recommendation between these options, think through the following questions dealing with the startup phase of the giving vehicle, as well as ongoing operations: How much time does the client have to complete a gift? How much money will be available to contribute in the near and short term? What kind of initial start-up costs and ongoing operational expenses is the client willing to pay? Are the differences in tax deductibility significant? Does the client demand absolute operational control? Will family members be available to run the foundation as volunteers? If not, can the foundation hire staff? Does the client already know what they want to accomplish and how? Are the annual operating costs reasonable and sustainable? How will the client react to the operational restrictions? Is the client strongly concerned about privacy? An advised fund at the Eau Claire Community Foundation might allay these concerns. Public charities like the Foundation file donor lists and grant lists with their tax returns, but federal law protects the donor lists from public inspection. Let this simple chart make life easier by comparing the differences between a private foundation and a donor advised fund at the Eau Claire Community Foundation. Services for Private Foundations As a community foundation, the Eau Claire Community Foundation is legally classified as a publicly supported charity. At the same time, the Foundation shares some of the features of a private foundation, particularly its grant-making expertise. Because of this hybrid quality, the Eau Claire Community Foundation can offer a number of services to private foundations. Here are just a few: Minimizing or Eliminating Administrative Burden Clients who established private foundations years ago may find that they are no longer suitable or convenient. Perhaps no family members or friends are available to run the foundation as volunteers. Perhaps the administrative burdens have become a nuisance, or the size of the private foundation now makes it difficult to justify the operational costs. Whatever the situation, working with the Eau Claire Community Foundation is a great alternative. Transfer of Assets The private foundation may transfer all of its assets to the Eau Claire Community Foundation and then elect with the IRS to terminate both its private foundation status and legal existence. The private foundation could then create any type of fund at the Foundation, such as a field of interest fund, to continue grant-making in areas important to the private foundation, or a Donor Advised fund with family members or trustees as donor advisors. The private foundation may transfer all of its assets to the foundation without electing to terminate. Through this method, the private foundation avoids excise taxes and the obligation to file a tax return, since it has no assets and no income. But the private foundation still exists as a legal entity in order to advise the community foundation on disbursements from the fund. Meeting Annual Distribution Requirements Clients who have private foundations may occasionally have difficulty meeting the foundation’s annual federal payout obligation. Perhaps the private foundation has not received sufficient applications within its focus area, or a favored project is not quite ready to proceed. In these situations, the private foundation can create a Donor Advised fund at the Eau Claire Community Foundation and contribute all or part of the current year’s required distribution to the fund. Because the Foundation is a public charity, this contribution to the Foundation is a “qualifying distribution” that counts towards the federal payout requirement. The private foundation’s trustees can then recommend grants from the Donor Advised fund as needed. Identifying Worthy Charities With more than 1.5 million public charities in existence nationwide, and thousands locally, it can be difficult for private foundations, particularly those with no staff and few volunteers, to identify the most worthy agencies. In such a case, the private foundation could create a fund at the Eau Claire Community Foundation and then ask our grant-making staff to develop a portfolio of charities for the private foundation’s consideration and recommendation. Making Grants Anonymously For any number of reasons, a private foundation might want to support a nonprofit anonymously. If so, the private foundation could establish a Donor Advised fund at the Eau Claire Community Foundation, and then recommend that a grant from the fund be made anonymously to the ultimate beneficiary. All of the private foundation’s grants are public information. The Eau Claire Community Foundation’s grant lists are also public, but the Foundation is not required to specify which fund was the source of a particular grant. ECCF v. Charitable Gift Fund The past decade has seen an explosion in the number of charities offering some version of an advised fund, based on the original community foundation model developed in the 1930s. The best known among them is the Fidelity Charitable Gift Fund, started in 1992, which now has several billion dollars in assets. Reportedly, more than 60 similar gift funds exist, and more are being created. Mutual fund companies, brokerage firms, and large, sophisticated nonprofits are among themany providers. (Advised fund programs administered by these nontraditional providers are collectively referred to here as “charitable gift funds.”) What to consider Charitable gift funds have different policies, costs, and capabilities. Whomever the provider, the professional advisor should consider a range of issues when considering whether to recommend this option: What level of service does the client want now or potentially need in the future? What types of assets does the client want to contribute, and how much? What about investment choices for the fund? What will it cost to use a particular fund, and what services are available in exchange? Does your client want to make gifts for charitable purposes to non-registered charities or international groups, or to be limited to certain kinds of charities? Plan By Age Want to learn more about the estate, financial, and gift planning topics that matter to you? Select the age group that bests describes you to get started. Under 40 Your life feels newly supersized with career responsibilities surging and, perhaps, a young family in the nest. You’re focused on the present, but what would happen to your loved ones if they were faced with your sudden death? Let us help you protect the people and causes you love with your first estate plan. Ages 40-54 With growing children, aging parents and a busy schedule, estate and financial planning can be a challenge. We can help you get your plans in order to protect your family and support your favorite causes. Ages 55-69 Retirement is just around the corner—or here! Take steps now to make sure you can thoroughly enjoy the extra time you’ll have to travel and perhaps spend time with your children and grandchildren. Ages 70+ Put your mind at ease by learning how to make your retirement dollars last. Now is the time to be diligent about updating estate plans that put your family first and talking to your loved ones about your choices. Planned Giving Options The future of the Eau Claire Community Foundation and its ability to benefit the residents of the greater Eau Claire area is assured by the continued generosity of our donors. When it comes to making a long-term impact, there are many giving options to choose from. Through planned giving, you can help your clients further our mission while providing them with tax or other financial benefits. This simple chart will help you compare possible outcomes and types of assets. Find Out More >> Other Professional Services Individuals The Eau Claire Community Foundation can provide an additional layer of privacy for a client in sensitive circumstances, even on a short-term basis. The Foundation may accept “pass-through” gifts, gifts that are to come into the Foundation and be redistributed to another charity within a short period. A client who wants to make a one-time anonymous gift to a charity may be able to route it through the Eau Claire Community Foundation as a pass-through gift. In addition, the Eau Claire Community Foundation can provide a range of consulting services on either a formal or informal basis. For example, some clients want help in developing their own charitable giving priorities. Or a client may want some confidential background research on a charity before deciding on a gift. Professional advisors are encouraged to contact the Eau Claire Community Foundation with questions about any charitable issue. Corporations Businesses of all sizes, including closely held or family businesses, may wish to work through the Eau Claire Community Foundation to implement both corporate and individual charitable giving goals. Many corporate executives believe in the importance of being a “good corporate citizen” by supporting nonprofit organizations in the communities they serve. But the costs and administrative responsibilities of running such a program can overwhelm internal enthusiasm. As cash flow permits, a business can set aside funds for charitable giving through a donor advised fund. The Eau Claire Community Foundation’s staff can work with the company to help identify the company’s goals and implement the program. Corporate representatives can serve as the advisors to the fund to recommend grantees. The Eau Claire Community Foundation will receive all grant applications, and handle all the administrative responsibilities, such as paying grants and monitoring and evaluating grantees. Small business owners may be interested in other aspects of the Eau Claire Community Foundation, in addition to donor advised funds. A small business owner might use the charitable lead trust as a way of transferring business ownership to children in a tax-favored way. Nonprofit Organizations The Eau Claire Community Foundation can provide back-office services to nonprofit organizations that lack the volunteer or paid personnel needed to administer their organizations. If the nonprofit establishes a fund, the Foundation can provide the following services: Receiving Charitable Contributions The Foundation can receive all gifts intended for the organization. Checks usually are made payable to the Eau Claire Community Foundation with the notation that the gift is for the particular nonprofit. The Foundation can also receive credit card donations by telephone or over its Web site. Acknowledging Contributions The Foundation will acknowledge contributions in a letter that satisfies federal tax law requirements. Paying Expenses and Grants The Foundation will pay fund-related expenses after the nonprofit submits appropriate documentation of the charitable purpose of the expenses. The Foundation will also pay grants to nonprofit organizations coming from the fund. Banking Each nonprofit’s fund becomes part of the Foundation’s overall banking arrangements with all necessary internal controls. Accounting and Audit The Foundation issues quarterly reports to all fund-holders. Each fund is included in the Foundation’s annual independent audit and federal tax return at no additional cost to the nonprofit. Stock Delivery Instructions
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