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As attorneys information their shoppers by advanced property planning, tax and charitable giving points, they’ve a robust however typically ignored device at their disposal — group foundations. At these philanthropic organizations, employees are specialists in native points and the nonprofit organizations working to deal with them. And group foundations can accomplice with property attorneys to develop philanthropic plans that join with their shoppers’ core values, set up significant charitable presents, and profit from tax planning alternatives.
There are greater than 900 group foundations working within the U.S., in keeping with the latest knowledge from the Council on Foundations. Silicon Valley Neighborhood Basis (SVCF) is the most important, with greater than $14 billion in charitable property and $4.58 billion in grants made in California and around the globe in 2023.1
Whereas attorneys could know that group foundations exist of their communities, they will not be accustomed to all of the sources group foundations can provide them for stylish charitable planning.
At SVCF, for instance, donors can open donor suggested funds (DAFs), endowed funds, scholarship funds and extra.
Donors can fund their philanthropy with extremely appreciated property that many smaller nonprofits aren’t capable of settle for, and, in sure circumstances, could even advocate their very own trusted monetary advisors to handle a donated charitable asset.
Donors who need assist in making a philanthropic technique or discovering the fitting organizations to assist can work with philanthropic advisors who’ve deep experience in native points and data of the organizations working to deal with them. Donors who need to advocate advanced or worldwide grants can depend on SVCF’s in-house experience in grantmaking and compliance.
Attorneys typically search essentially the most tax-efficient methods for shoppers to assist their favourite causes, and group foundations is usually a highly effective ally on this effort. They can assist guarantee shoppers’ philanthropic intentions align with long-term tax methods, fostering significant social influence whereas usually lowering tax burdens.
For entrepreneurs, executives and rich shoppers which have collected long-term appreciated property with a low tax foundation, liquidating these property to make charitable presents of money can generate vital capital positive aspects taxes.
What’s extra, a few of these property could also be illiquid or topic to restrictions on sale.
However donating the property themselves to charity typically gives highly effective charitable planning and tax advantages. By donating appreciated publicly traded securities, for instance, donors could keep away from the capital positive aspects tax due upon sale, and the charity is ready to use the complete worth of that asset for charitable functions. The donor will usually obtain an instantaneous truthful market worth deduction of as much as a 30% adjusted gross earnings restrict, with a five-year carry ahead.
The identical profit could apply to presents of different kinds of long-term appreciated property. That’s the place SVCF’s capability to just accept advanced property for charitable donations can assist property attorneys formulate efficient property plans. Many nonprofits can not settle for such donations, however SVCF typically can — permitting donors the chance to contribute various and sophisticated property to create or add to their donor suggested funds.
Along with donations of publicly traded shares, mutual funds, and bonds, SVCF facilitates the giving of personal enterprise pursuits together with:
- Non-public C-Corp and S-Corp Inventory
- LLC and Restricted Partnership Pursuits
- Non-public Fairness and Hedge Fund Pursuits
- Pre-IPO Inventory
- Carried Curiosity
Moreover, SVCF can usually settle for donations of non-publicly traded property together with:
- Cryptocurrency
- Actual Property
- Life Insurance coverage
- Oil and Gasoline Royalties
- Restricted Inventory
With regards to property planning and legacy presents, SVCF gives beneficial companies that make testamentary giving simpler and extra versatile.
Donor suggested funds (DAFs), for instance, enable donors flexibility in lifetime giving, however they’re additionally nice automobiles for legacy and multigenerational giving. Households can collaborate to create a giving mission and determine on grants collectively. Donors can also add members of the family over the age of 18 as fund advisors, enabling them to advocate grants themselves. Donor suggested funds may maintain property presents that come from trusts, wills and beneficiary designations to centralize all charitable presents in a single charitable car. Mother and father can then appoint their youngsters as successor advisors to steward the household’s philanthropy into the following technology.
If a donor doesn’t have a donor suggested fund — or has one however doesn’t need the fund to proceed after their dying — they will work with SVCF to create a legacy settlement to endow new funds for the advantage of the group. The settlement may be up to date with out having to amend property paperwork.
And if a donor needs to learn their group however doesn’t know which organizations to assist, a present to SVCF’s Neighborhood Endowment Fund supplies unrestricted funds to be allotted to satisfy group wants sooner or later. Such a present supplies SVCF the flexibleness to deal with crucial group wants as they come up over time.
Neighborhood foundations provide experience in giving methods, deep data of native charities, and entry to a group of different philanthropists. SVCF can assist with each step of the philanthropic course of, together with:
- Guiding donors to charities that align with their objectives and values and structuring presents, together with annual or conditional presents
- Customizing funding choices for fund holders.
- Constructing communities of like-minded philanthropists
In sure circumstances, group foundations can also be capable of accomplice with a donor’s present workforce of advisors, together with funding advisors for ongoing administration of property, CPAs for tax planning, and personal basis employees for consolidated
monetary reporting.
By partnering with SVCF, attorneys can present their shoppers with flexibility and assist of their charitable giving plans. Whether or not it’s providing recommendation on structuring a tax-efficient reward, receiving advanced property for subsequent charitable giving, or supporting attorneys in guiding households by the intricacies of legacy planning, group foundations function trusted allies within the course of.
For donors, this partnership opens the door to considerate, impactful philanthropy that may evolve over time. And for attorneys, it’s a possibility to deepen shopper relationships whereas guaranteeing that their shoppers’ charitable and monetary objectives are aligned.
1Council on Foundations, Survey Outcomes, https://cof.org/cfinsights/outcomes/2022/property
*Silicon Valley Neighborhood Basis doesn’t present tax, authorized, or accounting recommendation. This materials has been ready for informational functions solely, and isn’t meant to supply, and shouldn’t be relied on for, tax, authorized or accounting recommendation. You must seek the advice of your individual tax, authorized and accounting advisors earlier than partaking in any transaction.
