5 minute read
Prairiewood
Wealth Management
A Trusted Partner For Understanding The Big Picture Of Charitable Giving
The FM Area Foundation helps donors maximize their philanthropy to help create a vibrant community full of opportunities for everyone. Our organization works closely with individuals, families, and businesses who share our commitment to positively impacting the local community and beyond. Recently, we had the opportunity to chat with Steve Nelson, a fund holder at the FM Area Foundation and a professional advisor at Prairiewood Wealth Management. During our conversation, Steve shared his personal and professional experiences with the FM Area Foundation.
For over six decades, the FM Area Foundation has been a steadfast presence in the local community, serving as the sole community foundation in the area. What began as a mere idea among community leaders has since blossomed into an institution that has granted over $82 million to charities, both within and beyond the community. The Foundation’s work today is still guided and motivated by the core values that founded the organization in 1960. Local attorneys, wealth advisors, and financial advisors alike play a vital role in educating Cass and Clay County residents on the many opportunities that are available through the community foundation. Thanks to their tireless efforts, the FM Area Foundation continues to provide invaluable support to the community and those in need.
Prairiewood Wealth Management is committed to providing clients with a wide range of financial services, including comprehensive financial planning, proactive tax planning, and investment management. Their team consists of highly skilled professionals who are dedicated to delivering exceptional client service. They strive to help their clients coordinate their entire financial life and ensure their financial well-being.
Steve and Christine Nelson have two funds at the FM Area Foundation. They established a personal Qualified Endowment Fund to benefit from the ND Qualified Tax Credit. They also created a donor advised fund by donating a portion of their privately held business. Donating a privately-held business interest is a complex form of giving with significant tax advantages, and they felt it was great to have the local expertise of the FM Area Foundation team involved in the gift. Steve wanted to experience working with the FM Area Foundation before recommending it to his clients.
Steve recommends the FM Area Foundation to his clients because of the Foundation’s experience and dedication to fulfilling clients’ charitable giving goals. For clients with North Dakota income tax liability, having a local option to qualify for the 40% ND Qualified Tax Credit is very helpful. Collaborating with donors, their advisors and the FM Area Foundation can achieve a mutually agreeable outcome by addressing challenges and working towards a shared goal.
Prairiewood Wealth Management has had clients set up donor advised funds and endowment funds with the FM Area Foundation. Setting up a personal ND Qualified Endowment Fund can eliminate any ND income tax liability the client may have. It can also streamline the annual process of deciding which charities to donate to and reduce the risk that the charity spends or invests the funds inconsistent with the client’s wishes. In addition, we recommend, and our clients have utilized, the FM Area Foundation when a complex gift (real estate or privately-held businesses) would benefit from the Foundation’s expertise.
Steve recommends discussing values, goals, interests, and tax impacts with potential clients to understand their charitable giving, and if possible, consider involving the client’s children so that the next generation can be included in charitable giving. They suggest planned giving strategies that minimize taxes or increase contributions. They coordinate with estate and tax advisors to maximize family impact.
“Given charitable giving impacts everything - investment planning, taxes, and estate planning, a holistic approach where someone understands the big picture is often helpful.”
- Steve Nelson
Steve and the team at Prairiewood Wealth Management feel very fortunate and humbled to have a significant number of highly successful, charitable business owners as clients. When asking their clients why they want to build additional wealth, they often answer so they can more meaningfully support charitable causes. These successful entrepreneurs have built great businesses with great systems, processes, and plans, and a natural evolution for them is to focus on using their success to make a difference in the world around them and create a legacy that lasts beyond their lifetime. Prairiewood Wealth Management’s mission is to come alongside them and help them do that as effectively as possible. The FM Area Foundation has been a great partner in helping to serve their clients’ charitable needs.
Given that there are so many ways and strategies to give tax efficiently to charities, we are surprised at how many people gift cash, the least efficient method. After sharing some of the charitable giving strategies with them (charitable bunching, gifting appreciated stock to donor advised funds, Qualified Charitable Distributions (QCDs) from IRAs, charitable trusts, endowment funds, etc.), the question Prairiewood Wealth Management gets most often is, ‘’Why has no one told me about these before?’’.
“Donors have the option to recommend their own fund manager when establishing a charitable fund through the FM Area Foundation. There is sometimes the perception that referring clients to us will result in lost business for existing managers and advisors, but this simply isn’t the case.
We understand the value of the relationship you’ve built, and we want to help facilitate giving. Advisors who work with us can become part of our fund manager portfolio.”
