Donor Advised funds at Grand Rapids Community Foundation

Donor Advised funds at Grand Rapids Community Foundation

Supporting your vision for our community’s future.

Support the causes you care about through a fund you advise Strategic philanthropic leadership Since 1922, Grand Rapids Community Foundation has strived to support our community by responding to its most pressing needs. By connecting people, their passions and our region’s resources, we have worked toward an inclusive and equitable West Michigan where everyone can apply their talents and creativity to fuel our future. Our donor partners know the power of our endowment means the impact of today’s gifts will continue into the future.

By establishing a Donor Advised fund at the Community Foundation you demonstrate your love, commitment and vision for our community’s future. Your fund will bear your name and represent the hard work and values that define your life, becoming your legacy of generosity. Your gifts have the power to sustain the causes that matter to you as our community grows and changes.

2 Impacting Community and Establishing a Legacy

Ray McCahill was a teacher and coach passionate about removing financial barriers so more youth could participate in athletic and educational programs.

The McCahill family honors Ray and models giving to the next generation through their fund.

4 Impacting Community and Establishing a Legacy

Through our fund, my siblings and I can continue our father’s legacy and support the growth of youth development and athletic programs.

He would be so proud to see the Community Foundation’s positive impact, and that our family is a small part of that initiative.

M O L LY M C C A H I L L L O W E The Ray McCahill Family Fund

Four reasons to establish a Donor Advised fund at Grand Rapids Community Foundation 1

Leave your mark Donor Advised funds are efficient philanthropic tools that will help you thoughtfully support the causes you care about. Through a fund you advise, you can make grants to local, national and some international organizations of your choice. With your Donor Advised fund, you are establishing a giving structure designed specifically to help achieve your philanthropic goals.

2

Create the fund your way A Donor Advised fund can be created from a gift of cash, stocks, closely held stocks, bonds, real estate or other assets. Donor Advised funds are typically established during your lifetime, but can be created through your estate plan for a family member to advise.

3

Personal support from industry and community experts Our professional staff has a deep understanding of community issues and needs, and can guide and support your grantmaking. We will also handle all administrative and legal requirements for your fund, so you can stay focused on the causes you care about.

4

Maximize your impact with multiple tax advantages Contributions to your Donor Advised fund may be tax deductible in the year they are made and grow tax-free. In addition, your gifts receive the most favorable tax treatment under the Internal Revenue Code, because your Donor Advised fund is part of a public charity.

Giving long-term appreciated securities, privately held business interests or other assets may enhance your tax benefits.

Grand Rapids Community Foundation 5

Community Foundation donor, nonprofit and community partners build a thriving community.

Flexibility in your Donor Advised fund To meet the philanthropic needs of our donor partners, Grand Rapids Community Foundation offers three different types of Donor Advised funds. The fund type you choose will depend on your philanthropic goals and the amount of grantmaking activity you desire.

Non-endowed fund The non-endowed fund is established with a gift of $25,000 or more, built over five years or established with a single gift. Once the fund is fully established, the entire value of the fund is available for immediate grantmaking.

Endowed fund The endowed fund is established with a gift of $25,000 or more, given as a single gift or built over five years. This fund is permanently endowed, which means each year a percentage of the fund’s market value is used for grants that you recommend. This fund is permanent and perpetual—a great way to ensure that causes you care about are supported long into the future and establish a legacy for your family’s giving.

Dynamic fund The dynamic fund is established with a gift of at least $250,000. Of this amount, $50,000 is permanently endowed, with the remaining balance available for immediate grantmaking. This type of fund is permanent, but is designed for donor partners who wish to make more grants than the endowed fund and ensure a legacy of support for the community.

Grand Rapids Community Foundation 7

When deciding to create a Grand Rapids Community Foundation Donor Advised fund, a fund offered by another provider, or start a private foundation, you might consider the level of personal support, access to expertise, or fees and administration.

DONOR ADVISED FUND AT GRAND RAPIDS COMMUNITY FOUNDATION

OTHER DONOR ADVISED FUN

Access to professional grantmaking staff with local expertise, who can advise you on where you can direct grants according to your interests.

Grantmaking support and commun

No setup fees.

Set up fees vary.

No specific annual distribution is required, but active, yearly grantmaking is encouraged. If no grants are made in a five year period we will work with you to make a distribution from the fund.

No specific annual distribution is re cases, grants to certain organizatio or a portion of grantmaking must b provider organization.

Income Tax Deductions

Income Tax Deductions

•

Cash: up to 60% of adjusted gross income.

•

Cash: up to 60% of adjusted

•

Appreciated publicly traded stock: fair market value up to 30% of adjusted gross income.

•

Appreciated publicly traded value up to 30% of adjusted

•

Long term real estate and other securities: fair market value up to 30% of adjusted gross income.

•

Long term real estate and ot market value up to 30% of a

You may choose to make grants anonymously.

You may choose to make grants an

Community Foundation staff will partner with you to setup your fund in the way you prefer—in person, by phone or over email.

Setup time can be quick, often thro financial institution you work with.

Administration is pooled and an annual fee is charged.

The Community Foundation handles reporting and due diligence.

Administration is pooled and an an Fund provider handles reporting an

8 Impacting Community and Establishing a Legacy

ND PROVIDERS

PRIVATE FOUNDATION

nity knowledge varies.

Donors must establish and support their own grantmaking structure.

equired. In some ons are prohibited, be directed to the

Setup costs will include legal, accounting and filing fees.

Annual distribution of 5% is required by the IRS.

Income Tax Deductions

d gross income.

•

Cash: up to 30% of adjusted gross income.

d stock: fair market d gross income.

•

Appreciated publicly traded stock: fair market value up to 20% of adjusted gross income.

ther securities: fair adjusted gross income.

•

Long term real estate and other securities: deductible at cost basis.

nonymously.

Tax return with grant listing is public.

ough an existing

Requires legal counsel and may take considerable time to establish.

nnual fee is charged. nd due diligence.

Ongoing annual legal and accounting expenses and filing fees. An annual 990-PF IRS tax form must be filed.

Grand Rapids Community Foundation 9

Partnering to realize your vision In grantmaking The use of your Donor Advised fund is up to you—the Community Foundation will carry out your vision by awarding grants to any nonprofit organization that is recognized by the IRS and serving a charitable purpose. These include the most well-known international and national organizations, local nonprofits and faith-based organizations.

In walking alongside community Community Foundation staff is dedicated to regularly engaging fund holders, introducing them to organizations and networks working in their areas of interest. We can, through our due diligence process, help you determine if a specific nonprofit is the right fit for you. With the expertise of Community Foundation staff, you can be confident in your grantmaking.

In working with your professional advisor Your professional advisor can be a key partner in establishing gifts to benefit the community. The Community Foundation values their expertise and will work with them to bring your intentions to life.

In running your fund The Community Foundation provides professional fund management for all fund holders. After establishing a fund, you can expect quarterly statements with the details of your fund, including investment performance and grantmaking activity. You will also have access to an online portal, where you can view fund statements and fund history and make grant recommendations.

10 Impacting Community and Establishing a Legacy

Our family views Grand Rapids Community Foundation as an integral partner in reaching our shared goals of investing in the growth of our community, leading significant social change, and creating a lasting legacy.

DR. KHAN & LIZA NEDD Khan and Liza Nedd Family Fund

Dr. Khan and Liza Nedd established their nonendowed Donor Advised fund in 2017 and are active in grantmaking each year.

Through our fund we recommend grants multiple times a year to organizations meeting basic needs in our community. The ease of managing our fund and the example our giving sets for our family are two benefits.

R O G E R & J AC Q U E LY N VA N D E R L A A N The Roger & Jacquelyn Vander Laan Fund, a Dynamic Donor Advised Fund

Having a fund we advise has been instrumental in helping us connect our employees to our West Michigan community. With the support of the Community Foundation, we can focus our attention on the activities that matter the most to us.

R A N DY R E N K E R , C F P, A A M S West Michigan Edward Jones Foundation Fund

Purposeful Investment Management Responsible investments Donor Advised funds established with Grand Rapids Community Foundation are kept under the watchful eye of the Board of Trustees, Investment Review Committee and staff. Donor partners with funds at the Community Foundation have four investment options, which a member of the development team will explain in greater detail if you desire more information.

•

Balanced Plus Pool is designed to produce long-term investment returns. This pool is invested in equity investments, fixed income, real assets including real estate, natural resources and infrastructure and in diversifying strategies, primarily hedge funds.

•

Socially Responsible Pool is designed for donors who feel societal concerns should play an important role in their investment strategy.

•

Balanced Pool is an index fund that is not actively managed and carries no exposure to alternative investments.

•

Gift Preservation Pool is designed for minimal investment risk and invested in a money market fund. This pool is designed for those who do not want to take either equity or long-term interest rate risk.

The Community Foundation’s investment portfolio is under the direct oversight of the Investment Review Committee, whose dedicated members have been selected for their expertise. Our staff and the committee are responsible for recommending asset allocation parameters, choosing investment managers and monitoring performance. The Investment Review Committee reports to the Board of Trustees on a quarterly basis and uses a national firm to help manage the portfolio.

Grand Rapids Community Foundation 13

Steps to creating your Donor Advised fund We would love to partner with you through a Donor Advised fund to help you realize your philanthropic goals and vision for our community.

• Let us know your intent. We will prepare a fund agreement to review with you and will collaborate with your professional advisor team if desired.

• Make your initial contribution to your fund and set an orientation appointment, where Community Foundation staff will discuss your goals and how to manage your fund, including how to recommend grants and access your fund information online.

• Enjoy the ease, tax benefits and support of the causes you care about through your Donor Advised fund.

14 Impacting Community and Establishing a Legacy

Managing your fund •

You may recommend a grant at any time and are not tied to a December 31 deadline.

Although we encourage Donor Advisors to put their resources to work by making grants annually, you do not have to make grants from your fund each year.

Although there is no current legal requirement to do so, the Community Foundation encourages you to make grants from your Donor Advised fund annually. If you make no grants in a five year period we will work with you to ensure a distribution is made.

•

You may support any 501 (c) 3 organization including your place of worship, educational institutions including faith-based schools, and local, national and some international nonprofits. The Community Foundation does not restrict the organizations you can support through your fund. If you have questions about an organization our grantmaking staff will be happy to assist you.

•

Completing a legally binding pledge through your Donor Advised fund is prohibited.

•

Because it provides a personal benefit, you cannot make a distribution from your fund for a membership. You can support a fundraising event with your fund, but you cannot accept tickets or receive any other benefit for your contribution.

•

By establishing your Donor Advised fund you are making an irrevocable gift and relinquishing the investment and direct management of your funds to Grand Rapids Community Foundation. Our investment policies are subject to approval by the Board of Trustees, as are the grants made from your fund.

Let’s start a conversation We are excited to partner with you to impact community and establish your legacy.

Our team looks forward to learning about your philanthropic goals and answering any questions you might have about establishing a Donor Advised fund.

Contact the Grand Rapids Community Foundation development team at 616.454.1751.

Grand Rapids Community Foundation 15

Grand Rapids Community Foundation 185 Oakes Street SW Grand Rapids, Michigan 49503 grfoundation.org