Professional Advisors: Advisor Resources
Typical Ways Your Clients Might Benefit From Community Foundations
- Year-end tax planning: Your client has just earned a large bonus. By recommending that your client establish a fund through the local community foundation to counterbalance the tax consequences of the bonus, you will have shown your client how to get an immediate tax deduction as well as how to make a meaningful charitable investment in the community.
- Retiring in comfort: Your client would like to give back to the community but is concerned about having enough money for life. This person may benefit from establishing a Charitable Gift Annuity with the community foundation. These annuities can provide a solid income stream during the person’s life and yet be customized to meet the charitable desires of the donor upon death. Annuities can also be established to provide income through the lifetimes of a client and spouse.
- Preserving an estate: Rather than being subject to estate taxes, your client can tailor his or her estate to reduce or avoid them. Suggest that your client direct dollars for local benefit. Your client's taxable estate can be reduced through planned gifts, such as a charitable bequest to a community foundation.
- Sale of a business: Help your client reduce capital gains tax via structured charitable gifts and planned giving strategies involving the local community foundation.
- Substantial IRA/401(k) assets: Partner with the local community foundation to help your client evaluate the most beneficial distribution of assets to minimize taxes – giving more to your client's heirs while at the same time pursuing your client's charitable goals.
- Desire to establish a private foundation: Contact your client's local community foundation for information about a donor-advised fund as a simple and more cost-efficient alternative. The community foundation can also provide a comparison showing advantages and disadvantages of private foundations, donor-advised funds, and supporting organizations.
- Closely held stock: A donor-advised fund or planned gift at a community foundation may be a solution for your client's eligibility for an income tax deduction measured by the fair market value of appreciated stock (less any planned gift value).
- Sale or disposition of highly appreciated stock: Sometimes charities are too small to accept direct stock gifts. Establishing a fund at the local community foundation with a gift of appreciated stock allows your client to receive a tax deduction on the full market value, avoid the capital gains tax that would otherwise arise from sale of the stock, and direct the funding to benefit your client's philanthropic choice.
- Strategic giving: To make a meaningful high-impact gift, you and your client may consult with community foundations utilizing their knowledge and expertise regarding community needs and programs.
Sample Legal Language & Other Instruments
Legal language templates regarding donor gifts and the creation of funds are provided to assist professional advisors in establishing these legal documents. For more information or assistance, please contact your local community foundation.
The model documents were developed by Duane L. Tarnacki, Esq., counsel for the Council of Michigan Foundations and attorney with Clark Hill P.L.C. in Detroit, Michigan.
The documents were made possible through the community foundation project of the Council of Michigan Foundations supported by grants from the W.K. Kellogg Foundation, the Charles Stewart Mott Foundation, and the Council of Michigan Foundations' community foundation members.
Planned Giving Design Center
The Planned Giving Design Center is the world's largest website on the subject of planned giving. It delivers the highest quality planned giving information at no cost. To register without charge, visit the national Planned Giving Design Center website.
- Annuities and structured settlements, laws and regulations at http://www.annuity.org/
- Community Foundations of Canada: Professional Advisor eResources