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Creating a Charitable Legacy

Creating a Charitable Legacy

By Barzella Papa

 

Carnegie, Ford, Rockefeller, Gates, Buffett—these names are synonymous with not only business titans, but also some of the world’s greatest philanthropists. They turned portions of their fortune into charitable foundations and endowments that assure they are remembered for good works long after their deaths.

Locally, you don’t have to be a billionaire to be a philanthropist, nor do you have to create a private foundation to accomplish your charitable goals. The Community Foundation of North Central Florida makes it possible for anyone to create a lasting charitable legacy.

The organization is one of more than 700 community foundations that have been created in the United States since the first one was established in Cleveland, Ohio in 1914. Interestingly, the concept of community foundations was conceived by Frederick Goff, president of the Cleveland Trust Company, one year after John D. Rockefeller made a $35-million gift to start the Rockefeller Foundation. Goff decided there needed to be a way for people of all means to benefit their community, without creating a private foundation. The idea was simple: people would donate funds to meet local needs and the funds would be “pooled” together and administered by local professionals.

In less than 100 years, community foundations have grown to total more than 1,400 worldwide—making it the fastest growing sector in philanthropy. Today, donors still experience all the benefits of having a private foundation without the troublesome expenses, restrictions and administrative burdens.

These advantages have not been lost on area residents. The Community Foundation of North Central Florida channels almost $1 million in grants every year to local and regional nonprofits and has distributed more than $9 million since its inception in 1998.

With more than 50 charitable funds under its management, the local foundation does the behind-the-scenes work of the nonprofit sector, such as handling investments and accounting, filing annual tax returns and providing annual audits. Because of its role, the organization maintains a relatively low profile compared to its tremendous level of outreach. Many current donors only learned about the foundation while working with their financial adviser or when trying to set up their own private foundation.

While the foundation oversees the administration and investment of the funds, donors guide how their charitable dollars are spent. Donors can establish different types of funds, depending on how involved or uninvolved they would like to be with their gifts. For example, a family might choose to establish a Donor Advised Fund and make regular recommendations as to how they would like to allocate grants. Another donor might choose to create a scholarship in memory or honor of a loved one or invest in a particular cause through a Field of Interest Fund.

Benefits

By offering a variety of options to donors, the foundation helps people attain their charitable goals. Moreover, the benefits of working with the foundation, such as professional administration, tax advantages, anonymity and cost effectiveness, only help donors to expand their philanthropic choices.

For many donors, organization is one of the greatest perks of working with the Community Foundation of North Central Florida. Giving through a single fund allows them to track all of their annual gifts on one tax receipt.  Also, rather than responding to on-the-spot solicitations by sporadically writing checks here and there, donors have the advantage of being able to plan and prioritize their contributions.

See Also

Tax breaks are another advantage of working with the Community Foundation of North Central Florida. Many donors fund their charitable gifts through appreciated assets, such as stocks and real estate, avoiding capital gains tax and directing their resources into the local economy rather than to the federal government.

As a public charity, community foundations are generally not required by the IRS to disclose the names of their donors. Donors who desire anonymity can accomplish this through a community foundation. Private foundations, on the other hand, are required to make public the names of their donors.

Private foundations can be costly to establish and maintain, reducing the amount available to charity. Even for the simplest private foundation, the initial filing and approval can take months and cost thousands of dollars. Routine operating items such as bookkeeping and government reporting can add significantly to the costs. Funds in community foundations are typically far less costly to operating and can be established quickly.

Another benefit of donating through the foundation is being part of a network of fellow philanthropists. Donors can become acquainted with one another, building relationships and generating discussion of a wider range of charitable causes.

Donors today have a number of options for their charitable giving—making it possible for anyone to leave a lasting legacy.

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