Our Solution Archives - Foundation Source https://foundationsource.com/resource-topic/our-solution/ Your Partner in Giving Wed, 06 Aug 2025 17:07:42 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.2 https://foundationsource.com/wp-content/uploads/2022/09/cropped-FS-slashes-32x32.png Our Solution Archives - Foundation Source https://foundationsource.com/resource-topic/our-solution/ 32 32 How a Private Foundation Is Keeping An (Extended) Family Tradition Going Strong https://foundationsource.com/client-stories/case-study/how-a-private-foundation-is-keeping-an-extended-familty-tradition-going-strong/ Thu, 10 Aug 2023 21:51:16 +0000 https://foundationsource.com/?p=2751 The post How a Private Foundation Is Keeping An (Extended) Family Tradition Going Strong appeared first on Foundation Source.

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Challenge:

The foundation has its roots in a humble frontier feed store. Founded in the 1890s, the store eventually grew into a sizable company with a household name. Relatives of the three brothers who grew that company founded their foundation in the 1940s, and it has been in operation ever since.

Today, the board of the foundation, which is comprised of descendants of the brothers, pays homage to its history by keeping track of other descendants through familial records. There are now dozens of descendants and, upon reaching the age of 18, they are all eligible to join the foundation as a non-voting member and attend board meetings. The foundation will match up to three member gifts to charity for as much as $1,500 total in a given year. Members are also able to provide feedback via grant committees for organizations that have applied for funding.

The foundation’s tradition of making giving a (very large) family enterprise is one of its most cherished hallmarks. Even so, all that gift-matching and grant committee activity makes for an enormous amount of paperwork and a sizable administrative burden.

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Collaboration:

Foundation Source set up their gift-matching program on Applications, our online grants management system for accepting, organizing, tracking, and replying to charitable requests. (Applications is available as an add-on to the robust platform our clients use to manage their foundations.)

Family members use Applications to apply for their gift match. Foundation Source verifies that the family member made a donation and that the recipient organization is eligible to receive grants from the foundation. We also customized Applications so that when a family member is a part of a grant committee, they can log in, review their committee’s applications, and then leave comments for board members.

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Outcome:

Thanks to their experience with Applications, the foundation now benefits from a seamless, paperless process for its gift-matching program. The foundation is free to celebrate its heritage without worry that the growth of its family tree will outstrip its administrative capabilities.

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]]> Connecting a Private Foundation to An Opportunity for Literacy https://foundationsource.com/client-stories/case-study/connecting-a-private-foundation-to-an-opportunity-for-literacy/ Thu, 10 Aug 2023 21:36:01 +0000 https://foundationsource.com/?p=2746 The post Connecting a Private Foundation to An Opportunity for Literacy appeared first on Foundation Source.

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Challenge:

The board of the Charles R. Wood Foundation carries on the work of its late founder by supporting children, the arts, and healthcare in upstate New York.

While traveling in rural North Carolina, the president of the foundation read an article in the local newspaper about Dolly Parton’s Imagination Library program and its outreach to the region. This national program, which is available to any community, mails a book to children under five years of age each month. The purpose of the program is to boost early childhood literacy and foster a love of reading.

As the Charles R. Wood Foundation wanted to promote childhood literacy in upstate New York’s rural counties, they asked their Private Client Advisor at Foundation Source to get them information on how they could get involved.

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Collaboration:

The Private Client Advisor contacted the Dollywood Foundation, which was able to provide the demographic research the foundation required to assess regional need. Dollywood also identified possible literary agencies that might be willing to partner with the Charles R. Wood Foundation. Foundation Source coordinated the effort by discussing the program with the Literacy Volunteers of Clinton County, who agreed to handle the child registration process.

Foundation Source has streamlined the entire application process, saving the foundation significant time and administrative effort. The foundation is very pleased with their new process, but we revisit it each year and continue to refine it based on their evolving needs.

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Outcome:

The Foundation now supports the Imagination Library program, enabling 3,500 children in Clinton, Essex, Franklin, and Hamilton counties to participate. The foundation is thrilled that Foundation Source could help connect them with the necessary partners to make this project happen, and they appreciate how easy we’ve made it for them to track its results, procuring semi-annual updates for their review.

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]]> Corporate Philanthropic Services https://foundationsource.com/resources/product-briefs/corporate-philanthropic-services/ Fri, 03 Feb 2023 10:41:20 +0000 https://foundationsource.com/?p=2096 The post Corporate Philanthropic Services appeared first on Foundation Source.

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Services for Corporate Giving Programs and Foundations

Need assistance with your corporate foundation or corporate giving program? You’ll benefit from our comprehensive suite of tools, technology, and expertise.

Administrative Support

We provide day-to-day support for your corporate philanthropy, including:

Initial Setup

  • Customization of Foundation Source Online®
  • Uploading of historical giving activity (from a standardized electronic file)
  • Configuration of viewing rights and permissions for each employee granted access

Transaction Processing

  • Preparation of donation checks and transmittal letters

Compliance Oversight

  • Confirmation of IRS status for 501(c)(3) organizations
  • USA PATRIOT Act due diligence for terrorist organizations

Additional Services for Corporate Foundations

  • Funding and expense processing
  • Monitoring for self-dealing and jeopardizing investments
  • Tax preparation and filings: annual 990-PF, estimated taxes, year-end

WITH FOUNDATION SOURCE, YOU GET COMPREHENSIVE SERVICES AND A “VIRTUAL STAFF” OF FOUNDATION EXPERTS

IT’S A WIN-WIN: WHY COMPANIES ENGAGE IN PHILANTHROPY

Whether you are a chocolate company fighting to save the rain forest that sources your cocoa or a Detroit engineering firm sponsoring local STEM programs, businesses often find that doing good is perfectly aligned with doing well.

How Philanthropy Helps Society

  • Supports the community and environment in which the company operates
  • Broadens awareness of issues relevant to the company, such as domestic violence, coral reef bleaching, or food insecurity
  • Puts company expertise, networks, and resources in service of the greater good

How Philanthropy Helps the Company

  • Enhances company brand
  • Supports employee recruitment, retention, skill-building, and engagement
  • Fosters improved relationships with customers, vendors, and suppliers
  • Facilitates the creation of discoveries with commercial potential by funding basic research that aligns with company interests

Foundation Source Online®

Foundation Source Online® is a secure, web-based platform for managing your corporate giving activities, including charity research, donation processing, activity tracking, and reporting. Viewing rights and permissions are customized for each staff member given access to the site, enabling you to control what they can see and do while online. This award-winning technology provides oversight and control of corporate giving activities and facilitates communication and collaboration among those involved.

KEY FEATURES

Charity Research

  • Database of IRS-approved public charities and all other exempt organizations
  • Supplemental school data from the National Center for Educational Statistics
  • Access to research from GuideStar® and Charity Navigator
  • Vetting of charities not found in the database

Online Donations

  • Streamlined systems to initiate and review donations
  • Management of multi-year commitments
  • Creation of “favorite charities” list for expedited giving

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Customized Review and Approval Workflows

  • Manage donations by individuals, committees, satellite facilities, and geography
  • Manage donations with programmatic and/or budget restrictions
  • Ability to filter out categories of charitable organizations by National Taxonomy of Exempt Entities

Activity and Financial Reporting

  • Track receipt of donation acknowledgments
  • Library of standardized reports
  • Filters for user-defined reporting
  • Custom reports available

Streamlined Grants Management
Applications makes it easy for you to accept online applications from those seeking donations from your company, then organize and review those applications. It Includes:

  • Eligibility quizzes to pre-screen applicants against program guidelines
  • Customized applications with “required fields” that ensure complete submissions
  • Review and collaboration tools for stakeholders
  • Letter and email templates for notifying applicants of decisions or the need for additional information

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Outcomes helps you track the impact of your charitable donations. It automates the process of collecting key performance information from nonprofits and other recipients:

  • How donations were spent
  • Recipient’s progress towards goals
  • Unexpected challenges
  • Lessons learned

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Advisory Services

Private Client Advisor

Each client is supported by a Private Client Advisor, a relationship manager dedicated to your company, who is available to assist company representatives on a daily basis with our services. He/she gets to know you and your giving program inside and out. Private Client Advisors are backed by specialists with expertise in tax and legal issues, compliance, and philanthropy. They can help:

  • Set up and configure the Foundation Source Online® platform
  • Configure customized granting permissions and grant approval processes
  • Provide orientation and technology support for Foundation Source Online® users
  • Review donations and transmittal letters for accuracy
  • Accept correspondence on your behalf

Philanthropic Advisory Services

Our Philanthropic Advisory Services team has extensive experience in partnering with corporate foundations. Foundation Source clients have access to customized advisory services, tools and resources that enable foundations to maximize the impact and efficiency of their philanthropy.
Talk to us today to learn more.

Employee Engagement

These optional services are available through our network of preferred partners:

  • Employee matching
  • Volunteer tracking
  • International programs
  • Fundraising campaigns

WE CAN HELP YOU DEVELOP A CSR STRATEGY THAT ALIGNS WITH COMPANY BUSINESS GOALS

Adding a Corporate Foundation to Your Company’s Philanthropy

Nearly all companies engage in philanthropy as a means of giving back to the communities in which they operate. This includes financial contributions, donations of product, in-kind services, employee matching and volunteering.

However, only a fraction of these companies take advantage of the additional benefits that come from adding a corporate foundation to their philanthropic efforts. These unique and powerful advantages include:

Tax Benefits

The company can avoid capital gains taxes when land, stock, and other appreciated assets are donated to the foundation.

Expanded Philanthropic Options

Corporate foundations can engage in a wide range of charitable activities that would not be tax deductible if handled directly by the company:

  • International grants directly to organizations outside of the U.S.
  • Employer-related scholarship programs
  • Grants to individuals for disaster relief and economic hardship
  • Loans for a charitable purpose that are paid back to the foundation
  • Grants to for-profit entities, when they are used for a charitable purpose or to advance the work of the foundation

Consistent Giving

Staffing and overhead can be paid by the foundation and counted toward its 5% minimum distribution requirement, resulting in a reduced cost to the company.

Reduced Company Overhead

Corporate foundations are not required to collect substantiation receipts for gifts of $250 or more— a big plus for employee matching programs.

Foundation Creation

If your company is interested in establishing a corporate foundation, we can help. We typically can provide a new corporate foundation, ready for funding, in less than a week. We’ll provide the nonprofit corporate entity, bylaws, recommended governance policies and file IRS Form 1023 for recognition of exempt status.

ONLY A FRACTION OF CORPORATIONS TAKE ADVANTAGE OF THE ADDITIONAL BENEFITS THAT COME FROM ESTABLISHING THEIR OWN CORPORATE FOUNDATION

Our Clients

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Why Foundation Source?

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]]> Processing Your Foundation’s Disbursements https://foundationsource.com/resources/brochures/processing-your-foundations-disbursements/ Mon, 30 Jan 2023 01:19:58 +0000 https://foundationsource.com/?p=2072 The post Processing Your Foundation’s Disbursements appeared first on Foundation Source.

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Disbursement Accounts at Webster Bank

Our standard procedure is to open a disbursement account at Webster Bank, N.A., which will be providing banking services under our master agreement that establishes a highly integrated process. This simplifies the transfer of funds from your foundation’s financial accounts, reduces work for foundation members, and ensures a faster turnaround for making grants and paying expenses. (Foundation Source does not receive payment or other financial incentives from Webster Bank for referring clients who open these accounts.)

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Here’s what you can expect when opening a disbursement account at Webster Bank:

  • We will work with you to complete the simple documentation needed to open the Webster Bank disbursement account.
  • Webster Bank will not charge any fees for this account.
  • Funding for the account is initiated by the client. Deposits may be submitted electronically or by sending a check to Foundation Source.
  • Depending on your foundation’s activity level, you may decide to fund the Webster Bank disbursement account periodically or as needed in advance of distributions. Foundation Source will provide notifications when the account balance is insufficient to meet distribution needs and, if the foundation chooses, notifications when transactions are processed. Note: Foundation Source relies on this account being sufficiently funded in order to process your grants, expenses, tax payments, and service fees without delay. Insufficiently funded accounts may result in complications with grantees and vendors, delays, and possible penalties from the IRS if tax payments are late.
  • If your foundation uses this account for payroll disbursements, you will need to maintain a minimum account balance to sufficiently cover these automatic payments. (The minimum balance amount is based on the foundation’s payroll obligations.)
  • Foundation Source’s authority will be limited to moving cash from the disbursement account at Webster Bank.
  • This account will be an interest-bearing account that is FDIC insured up to current applicable limits.
  • Duplicate statements and view-only online access are available to you upon request.
  • Wire and ACH payments are available and will require additional authorizations if requested.

Disbursement Accounts at Financial Institutions Other than Webster Bank

While a Webster Bank disbursement account is the best and most efficient solution, there is no obligation to open one. If the foundation would like to maintain a disbursement account at another financial institution, Foundation Source can accommodate that for an additional fee.

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Here’s what you can expect when working with an alternate financial institution:

  • We will ask you to designate one “primary account” for all cash disbursements along with a designated contact person(s).
  • Foundation Source will prepare a “Transfer Funds Request” for the foundation as disbursements are requested, and diver it via email or fax, as agreed upon during setup.
  • The designated person at the foundation will be responsible for initiating the funds transfer from the foundation’s “primary account” financial institution to a Foundation Source disbursement account.
  • We will ask you to authorize Foundation Source to receive duplicate statements for this account.

THINGS TO CONSIDER:

  • Your foundation and the person designated for transferring its funds will bear a greater degree of responsibility if the foundation opts to use its own disbursement account rather than one at Webster Bank.
  • Your financial institution may require written or verbal confirmations of the transfer requests, which may be inconvenient and could potentially delay the funds transfer.
  • If the designated person is unable or unavailable to initiate the transfer request, your grants, expenses, tax payments, and service fees could be delayed, which may result in complications with grantees and vendors, and possible penalties from the IRS if tax payments are late.
  • Depending on your financial institution’s policies, your foundation may incur wire or other transaction fees for each transfer.
  • The foundation will be charged an additional annual fee of $1,500.

Disbursement Activities

GRANT TRANSACTIONS

Grant transactions are initiated through Foundation Source Online only by users who are authorized by the foundation to do so. By default, we send a confirmation email to both the grant initiator and the Foundation Representative, with a copy sent to the primary advisor/broker linked to the foundation. Grant requests are kept in a pending status while we verify the status of the recipient charity and the availability of funds in the primary account.

Once the grant request is approved and processed by Foundation Source, and funds to cover the grant are received, payment is sent to the charity. The charity also receives a detailed letter with grant specifications, terms, and conditions. This package is sent directly to the charitable organization or, upon request, to the person who initiated the grant for personal delivery to the charity.

EXPENSE TRANSACTIONS

IRS tax rules require that all foundation expenditures be ordinary and necessary for carrying out the foundation’s charitable purpose, appropriate and reasonable, and properly documented. Further, all expenses should comply with the foundation’s own expense policy. If the foundation conducts any activities other than grantmaking, we also look to see that these activities have been vetted with the IRS (via the IRS Form 1023 submission when it first sought tax exempt status) or reviewed by a qualified attorney. Foundation Source will verify that any expense report submitted for reimbursement to a foundation member, or any invoice submitted for payment to a third party, has been submitted by someone who is authorized by the foundation to do so, and that the invoice contains sufficient information for tax and compliance purposes.

If we determine that an expense strays into a gray area with respect to the regulations, we will contact the foundation to explain the IRS rules or to obtain more information as appropriate.

Once the expense is approved and processed by Foundation Source, and funds to cover the expense are received, payment is sent along with any required documentation.

TAX TRANSACTIONS

The IRS requires foundations to pay an excise tax of 1.39% on interest income, dividends, and realized capital gains. The excise tax is reported on IRS Form 990-PF and must be paid annually at the time for filing that return, or in quarterly estimated tax payments if the total tax for the year is $500 or more.

Unless other arrangements have been made by the foundation, Foundation Source automatically calculates the quarterly estimated taxes on behalf of the foundation and makes the tax payments.

Once calculated, Foundation Source sends an email notification of the transaction to the foundation president or other officer or trustee designated to receive such notifications. The foundation will have a three-day grace period to approve or question the payment. After the third day, it will automatically be submitted for processing, unless the payment exceeds $10,000, then a formal approval is required. There are no forms that require additional signature.

For payments due with the 990-PF return or an extension, the calculated amount is paid automatically once the return or extension is completed. Once submitted for processing and funds are received, payment is made to the IRS electronically.

STATE FILING FEE TRANSACTIONS

Most states require annual corporate reports and/or tax filings with accompanying fees. Unless other arrangements have been made by the foundation, Foundation Source prepares those reports and requests the funds for required fees.

FEE TRANSACTIONS

Fees assessed by Foundation Source are related exclusively to the services we provide in accordance with the Foundation Services Agreement, any Engagement Letter signed by the foundation and Foundation Source, and/or any current Notice of Fees.

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]]> Your Family Office and Foundation Source https://foundationsource.com/resources/brochures/your-family-office-and-foundation-source/ Wed, 04 Jan 2023 06:05:20 +0000 https://foundationsource.com/?p=1994 How We Work with Your Family Office Your designated staff person serves as the liaison between the family and our...

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Your designated staff person serves as the liaison between the family and our foundation management services. Your office gets a dedicated Private Client Advisor who is always just a phone call away to answer questions, resolve issues, and implement special requests. Our foundation professionals are also available to connect directly with the family upon occasion, as you deem appropriate.

THE FAMILY’S FOUNDATION

The family governs their foundation, sets strategy, and makes all granting and investment decisions. They will relate to you, as family office staff, for foundation matters.

FOUNDATION SOURCE

Working in the background, we provide all the services that are required to keep the foundation running smoothly and compliantly on a day-to-day basis. We will coordinate with you on administrative matters for the foundation.

Foundation Source Services Include:

ADMINISTRATIVE SUPPORT

Our professional staff handles the details that keep the foundation running smoothly, relieving the family office of the administrative burden while mitigating risk exposure. We take care of the following:

  • Grant processing and disbursements
  • Expense processing
  • Active compliance monitoring of foundation activities
  • Tracking the foundation’s progress toward meeting its annual 5% minimum distribution requirement
  • Foundation accounting and reconciliation
  • Tax work (990-PF and related filings) plus state filings

SPECIALIZED ONLINE TOOLS

You and the family have access to Impactfully, a secure, customized, web-based “command center” that centralizes the foundation’s activities. Developed specifically for the needs of private foundations, this award-winning technology simplifies foundation control, communication, and collaboration. Designated family members and family office staff get instant access and total transparency into foundation activities. Features include:

  • Individually customized viewing rights and granting permissions
  • An integrated database and specialized tools for charity research and grantmaking
  • Online tracking and reporting, including investment balances across all accounts

PHILANTHROPIC ADVISORY SERVICES

Foundation Source Philanthropic Directors are experienced professionals who are available to provide philanthropic advice to your staff or directly to the family via occasional phone consultations. When the foundation requires more extensive support, our Philanthropic Directors can provide in-depth, custom engagements. These could include:

  • Defining–or revisiting–the foundation’s goals and priorities
  • Translating a general interest (e.g., homelessness or clean water) into a concrete grantmaking strategy
  • Increasing family engagement, including bringing the next generation on board
  • Planning for change, such as leadership succession or a major change in assets

FOUNDATION CREATION

If the family doesn’t already have a foundation, but is thinking about establishing one, we are happy to work with the family’s attorney to coordinate services. Alternatively, we can provide the foundation entity and file IRS Form 1023 for recognition of exempt status. We’ll also provide articles of incorporation, bylaws, and investment, expense, and conflict of interest policies, which can be modified by the foundation.

In Summary

We have decades of experience supporting private foundations. We know that foundations and their needs come in all shapes and sizes. Our goal is to take the time to understand your office and your family, so we can help forge the best path forward. In the end, the family wants to make a difference with their philanthropy…and it’s our mission to help them do just that.

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]]> Your CPA Practice and Foundation Source https://foundationsource.com/resources/brochures/your-cpa-practice-and-foundation-source/ Wed, 04 Jan 2023 05:33:29 +0000 https://foundationsource.com/?p=1992 How We Work with You and Your Clients YOUR FOUNDATION CLIENTS Your clients continue to govern their foundations, set strategy,...

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YOUR FOUNDATION CLIENTS

Your clients continue to govern their foundations, set strategy, and make all granting and investment decisions. They will continue to work with you and their existing wealth advisor and attorney.

YOUR FIRM

You’ll gain access to the foundation’s reconciled asset and transaction data through our online platform. We do all the “behind-the-scenes” administrative work while your firm maintains its role as the primary tax advisor and preparer for the foundation. We make it easier for you to:

  • Calculate quarterly excise taxes
  • Prepare and file federal returns (990-PF and related filings) and state filings

HOW WE HELP

While supporting you as the foundations’ tax advisor, we also provide all the other services that are required to keep foundations running smoothly and compliantly on a day-to-day basis. Your clients will be supported by a dedicated Private Client Advisor who will serve as the primary contact and coordinate all services provided by Foundation Source.

Foundation Source Services Include:

ADMINISTRATIVE SUPPORT

Our professional staff handles the details that keep your clients’ foundations running smoothly, so they can focus on their philanthropic goals. We take care of the following:

  • Grant processing and disbursements
  • Expense processing
  • Active compliance monitoring of foundation activities
  • Tracking the foundation’s progress toward meeting its 5% minimum distribution requirement
  • Foundation accounting and reconciliation
  • Coordinating with you to facilitate your tax work

SPECIALIZED ONLINE TOOLS

Every foundation gets access to Impactfully, a secure, web-based “command center” that centralizes administration. Developed specifically for the needs of private foundations, this award-winning technology platform simplifies foundation control, communication, and collaboration. Designated foundation members get instant access and total transparency into foundation activities. Features include:

  • Individually customized viewing rights and granting permissions
  • An integrated database and specialized tools for charity research and grantmaking
  • Online tracking, and reporting, including investment balances across all accounts

PHILANTHROPIC ADVISORY SERVICES

Foundation Source Philanthropic Directors are experienced professionals who are available to provide philanthropic advice to the foundation via periodic phone consultations. If the foundation requires more extensive support, our Philanthropic Directors can provide in-depth, custom engagements.

FOUNDATION CREATION

If a client doesn’t already have a foundation, but is thinking about establishing one, we are happy to work with the family’s attorney to coordinate services. Alternatively, we can provide the foundation entity and file IRS Form 1023 for recognition of exempt status. We’ll also provide articles of incorporation, bylaws, and investment, expense, and conflict of interest policies, which can be modified by the foundation.

In Summary

We have decades of experience supporting private foundations. We know that foundations and their needs come in all shapes and sizes. Our goal is to take the time to understand your practice and your clients, so we can help forge the best path forward. In the end, your clients want to make a difference with their philanthropy… and it’s our mission to help them do just that.

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]]> Getting Started with Foundation Source – For Attorneys https://foundationsource.com/resources/brochures/getting-started-with-foundation-source-for-attorneys/ Wed, 04 Jan 2023 02:08:09 +0000 https://foundationsource.com/?p=1987  

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THIS GUIDE WILL ADDRESS THE FOLLOWING TOPICS:

What services does Foundation Source provide?
What are the common misconceptions about private foundations?
What benefits does Foundation Source provide for attorneys?
When is a foundation a good fit?
Why work with Foundation Source?
How do I engage Foundation Source?

Easy for Clients, Easy for You to Recommend

WHAT SERVICES DOES FOUNDATION SOURCE PROVIDE?

While we do not manage assets or provide legal counsel, we take care of everything else needed to run a foundation efficiently and compliantly, so your clients can focus on their philanthropy.

Foundation Management

Our services include complete back-office support, including compliance monitoring, transaction processing, tax preparation and filing, and financial and regulatory reporting.

Expert Guidance

A team of private foundation experts serve as the foundation’s virtual staff. Each foundation has its own dedicated Private Client Advisor who is just a phone call away. He or she is backed by in-house philanthropy, tax, legal, and accounting professionals who provide expert advice and responsive service.

Online Resources

A secure website for foundation members to manage day-to-day foundation activities, including charity research, grantmaking, reporting, viewing investment balances, checking the foundation’s minimum distribution requirement, and more.

Foundation Creation

We can help you establish a new private foundation, ready to issue grants, in less than a week.

WHAT ARE THE COMMON MISCONCEPTIONS ABOUT PRIVATE FOUNDATIONS?

THE MYTH:
It takes at least $5 million to start a private foundation.

THE REALITY:
There are tens of thousands of effective, small private foundations in the U.S. In fact, according to IRS data, of the more than 91,000 foundations in existence today, 88% have assets below $5 million and 66% are under $1 million.

THE MYTH:
Private foundations are time-consuming to create.

THE REALITY:
If you choose to have Foundation Source establish the foundation on your client’s behalf, Foundation Source can have the foundation up and running in less than a week. Foundation Source routinely provides this service to attorneys and their clients.

THE MYTH:
Creating a private foundation is costly.

THE REALITY:
While each donor is different, and issues related to settling an estate, liquidating assets, or navigating family dynamics can raise legal and accounting issues that add to the cost, the actual foundation creation doesn’t have to be expensive. Foundation Source can establish a private foundation, using a Delaware corporate structure, for a very reasonable fee.

THE MYTH:
Running a private foundation takes a lot of work, and it’s expensive.

THE REALITY:
Foundation Source provides a “virtual staff” for private foundations, eliminating the hassles and busywork. And because our experts are at the foundation’s service, but not on its payroll, our comprehensive support services are highly cost-effective.

THE MYTH:
A donor-advised fund is easier to manage.

THE REALITY:
Our goal is to make a private foundation as easy to manage as a donor-advised fund. The outsourced services provided by Foundation Source take care of all the administrative work and compliance worries while keeping your client in control of all foundation activities.

Guardrails For Your Clients’ Foundations

WHAT BENEFITS DOES FOUNDATION SOURCE PROVIDE FOR ATTORNEYS?

Foundations are subject to a myriad of regulations, and it’s easy for donors to stray into compliance pitfalls. That’s why it’s helpful to have Foundation Source administer your clients’ foundations.

Our daily oversight enables us to serve as your eyes and ears, flagging possible issues before they rise to the level of violations. Here are some examples of how we’ve worked with attorneys to save clients both trouble and costly penalties.

CASE STUDY #1

The Under-Distributor

When an established foundation became a Foundation Source client, we reviewed several years’ worth of their 990-PF forms. We discovered that their previous preparer had made errors that went back over years, causing them to have under-distributed. Working with their attorney, we were able to get= their tax penalties abated. And because Foundation Source continually updates the foundation’s progress toward satisfying its minimum distribution requirement, and also provides an online console where members can track it in real time, the client will never again confront this same problem.

CASE STUDY #2

The Case of the Missing Tax Return

Before it became a Foundation Source client, one foundation routinely filed its own annual return. One day, however, the foundation received a notice from the IRS that it had missed an annual filing. No one on the board could figure out what had gone wrong until they discovered the forgotten tax return in the desk drawer of a recently deceased foundation member. By the time the discovery was made, however, the foundation was facing $60,000 in penalties. Again, working with the foundation’s attorney, Foundation Source was able to leverage its excellent working relationship with the IRS to explain the situation, file the missing return, and get the penalties abated.

CASE STUDY #3

The “All in the Family” Self-Dealers

A family foundation decided to combine board business with pleasure, bringing their three young children along on a site visit to a Caribbean-based charity. The foundation then submitted its expenses for the trip to Foundation Source for reimbursement because, as they were aware, the foundation could pay for all legitimate and reasonable expenses incurred in carrying out its charitable purpose, including site visits— and count the expenditures toward meeting its minimum distribution requirement. Foundation Source reviewed the charges and discovered that the foundation had included airfare, hotel accommodation, and meals for their children as well as themselves. We caught the error, which could have resulted in a self dealing violation, and explained that only foundation members’ expenses may be reimbursed for attending foundation business. At the family’s request, Foundation Source also provided a special training session on recognizing and avoiding self-dealing conflicts in the future.

Identifying Prospects For Private Foundation Service

WHEN IS A FOUNDATION A GOOD FIT?

Foundation Source can help you determine whether a private foundation is the best charitable vehicle for your client.

A private foundation may be appropriate if the client wants:

Direct Control
Compared to other charitable vehicles, private foundations o er donors unmatched control over the management of the assets and disposition of grant funds, as well as governance, operations, and the charitable mission.

Philanthropic Flexibility
Private foundations have broad latitude to pursue almost any charitable activity, including granting directly to individuals, making program-related investments, and running programs of their own.

A Lasting Legacy
Because foundations can exist in perpetuity, they can provide an enduring testament to the family’s name as well as its philanthropic values, vision, and deeds.

A Current-Year Tax Deduction
The deduction for charitable contributions is available for the tax year in which the assets are donated to the foundation, even though grants resulting from those assets are often made in future years.

82K

Today there are over 82,000 private foundations in the United States. Over 50% of them have been created in the past 12 years.

Avoidance of Capital Gains
In addition to a deduction for income taxes on gifts to a private foundation, donors may also be able to avoid paying capital gains taxes by donating highly appreciated assets to a private foundation.

Reduced Estate Tax Liability
With a private foundation, donated assets are removed from the donor’s estate.

A Tax-Management Strategy for a Liquidity Event
A private foundation can be an important element of a tax-mitigation plan that anticipates the sale of a business, an inheritance, or a legal/domestic settlement.

Extended Family Control Over Charitable Assets
When a private foundation is established alongside either a charitable remainder trust or charitable lead trust, the donor and the donor’s family can receive all the usual benefits of these trusts while retaining family control over charitable giving—potentially forever.

98%

You can be confident that your clients will receive excellent, responsive customer service, as evidenced by the 98% satisfaction rating we receive from our clients year after year.

Ideal Candidates for Foundation Management Services

For clients who already have foundations, our services free up resources, allowing board members and staff (if any) to focus on the strategic issues of philanthropy rather than the day-to-day operational concerns. Here are some characteristics to look for when evaluating which clients could benefit from foundation management services:

  • Foundations experiencing or anticipating a critical transition:
    • Significant growth in foundation assets (planned or unplanned).
    • Change in foundation governance, structure, or strategy.
    • Loss of the foundation founder, major funder, key staff member, or manager.
    • Increasing demand for administrative and operational support, technology, or compliance support.
    • Divorce or other family dissension that requires an existing foundation to split up into two or more separate foundations.
  • Foundations with geographically dispersed family members and/or directors.
  • Foundations with few or no paid staff— the need for our services is especially high if the foundation is operated exclusively by family members.
  • Foundations with a growing volume of grant requests from nonprofits.
  • Foundations struggling to engage family members.
  • Foundations that have IRS-related compliance issues, penalties assessed, or are subject to an audit.

Why Work with Foundation Source?

WE SERVE MORE THAN 2,000 FAMILY, CORPORATE, AND PROFESSIONALLY STAFFED FOUNDATIONS, OF ALL SIZES, NATIONWIDE.

Here’s how we can assist you:

Support for Your Client Relationships
You, as the attorney, maintain the primary relationship with your clients while benefiting from the support of the most experienced and knowledgeable foundation services provider in the marketplace.

Comprehensive Oversight
Your clients are in good hands. We take care of all the details—from creating (or assisting to create) a new foundation to handling the most complex needs of large, established foundations.

Fully Outsourced Services
We provide administration, compliance, and philanthropic advisory services and a customized, online platform that donors, their families, and staff can use to direct foundation activities. While we do not manage assets or provide legal counsel, we take care of everything else, so your clients can focus on their philanthropy.

Resources and Networking For Your Clients
In addition to joining a community of private foundation peers, your clients will benefit from educational content, webinars, and in-person events reserved just for Foundation Source clients.

Savings
Your clients get everything they need for a fraction of what it would cost to hire staff or consultants to provide the same level of service.

Excellent Customer Service
Your clients will receive excellent, responsive customer service, as evidenced by the 98% satisfaction rating we receive from our clients year after year.

 

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]]> Foundation Source In Brief https://foundationsource.com/resources/product-briefs/foundation-source-in-brief/ Thu, 06 Oct 2022 23:36:33 +0000 https://foundationsource.com/?p=1518 Administration MODERN PHILANTHROPY STARTS HERE Our tech-enabled solutions make giving—and having a foundation—easier. Foundation Management New Foundation Creation Provide corporation...

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MODERN PHILANTHROPY STARTS HERE
Our tech-enabled solutions make giving—and having a foundation—easier.

Foundation Management

New Foundation Creation

  • Provide corporation structure (State of Delaware)
  • File IRS Form 1023 for tax-exempt status
  • Define foundation’s policies and guidelines
  • Configure foundation’s cloud-based platform and provide orientation
  • Coordinate with client’s financial, legal and tax advisors

Existing Foundation Implementation

  • Configure foundation’s cloud-based platform and provide orientation
  • Enter foundation grant history (up to seven years unformatted and unlimited formatted)
  • Set up budgeting and any multi-year commitments
  • Assess current state(s) filing status
  • Coordinate with client’s financial, legal and tax advisors

Administration and Governance

  • Undertake foundation recordkeeping
    › Funding and income
    › Expenses and fees
    › Assets and valuations
    › Grant history
    › Substantial contributors
  • Track 5% minimum distribution
  • Archive corporate, tax and other foundation documents
  • Manage online access rights

Compliance

  • Verify grantee’s 501(c)(3) public charity status
  • Provide USA PATRIOT Act due diligence
  • Identify supporting organizations
  • Monitor “Advance Ruling” expirations
  • Monitor grants and expenses to help prevent:
    › Self-dealing
    › Taxable expenditures
    › Excess business holdings, etc.
  • Monitor affiliations with other nonprofits
  • Track substantial contributors

Transaction Processing

  • Process contributions to the foundation
  • Prepare grant checks and transmittal letters
  • Pay fees and expenses
  • Provide payroll services (if applicable)
  • Provide transaction accounting

Tax Preparation and Filing

  • Calculate and pay quarterly estimated taxes
  • Prepare and file federal 990-PF return
  • Prepare and file 990-T UBIT return as needed
  • Prepare Forms 1099 and 1042 for independent contractors
  • Prepare and make state filings
  • Provide donor substantiation receipts
  • Maintain tax records in foundation archive

Financial and Grant Reporting

  • Grant activity and transaction reporting
  • Expense reporting
  • Financial reporting

Advanced Foundation Management

Specialized Grantmaking Services

  • Expenditure responsibility grants
  • Equivalency determination
  • International granting
  • Program-Related Investments and recoverable grants
  • Scholarship, fellowship and award programs
  • Direct charitable activities
  • Set-asides

Specialized Compliance and Tax Services

  • Transition-year tax returns and amended tax returns
  • Audit support (not IRS audit)
  • Limited partnership, trust and S-corporation investments
  • Foundation DBA (doing business as) filings

Specialized Accounting Services

  • Budgets for expenses and grantmaking
  • Prepare monthly financial reports, including customized statements
  • Statement of Financial Position and Statement of Activities
  • Internal control protocols
  • Cash flow projections

Expertise

YOUR PARTNER IN GIVING

Let us join you on your philanthropic journey with the experience and tools you need to reach your goals.

Advisory Services

  • One-on-one customer service
  • Set up customized cloud-based platform
  • Configure granting permissions and grant-approval processes
  • Provide orientation and technology support for platform users
  • Monitor qualifying distributions
  • Manage schedules for state and federal filings
  • Review and process foundation expenses
  • Review grants for compliance with IRS regulations
  • Review grant letters to help avoid compliance issues
  • Provide implementation support for advanced services
  • Facilitate board meeting preparation

Philanthropic Advisory Services

Governance

  • Establishing a board
  • Creating decision-making approaches
  • Facilitating a board meeting
  • Developing a succession plan

Leadership and Staff

  • Defining staff roles
  • Transitioning to new leadership
  • Professional development for board members and staff
  • Identifying opportunities to engage with other funders and nonprofits

Strategic Planning

  • Determining focus areas
  • Crafting a mission
  • Setting long- and short-term goals
  • Evolving foundation priorities

Sunsetting

  • Defining a model for spending down a foundation’s assets

Grantmaking

  • Cultivating and managing grantee relationships
  • Streamlining grantmaking processes
  • Building grant selection criteria

Grantee Relations

  • Grantmaking guidelines and procedures
  • Identification and due diligence of potential grantees
  • Manage application process
  • Review, verify, and document grantee eligibility
  • Manage grant payment schedules and post-award process
  • Monitoring and reporting on programs
  • Annual grant analysis and onsite meetings

Program Development and Management

  • Maximizing the giving capabilities of private foundations
  • Creating programs with measurable impact
  • Developing philanthropy beyond grantmaking

Asset Growth

  • Adjusting giving goals when foundation assets increase
  • Meeting a suddenly higher minimum distribution requirement

Next-Generation Family Engagement

  • Engaging younger generations in the family foundation
  • Unifying diverse generations through the foundation

Monitoring and Evaluation

  • Measuring impact of charitable activities
  • Conducting an annual review

Corporate Philanthropy

  • Establishing and managing a corporate foundation
  • Introductory or advanced skill development in grantmaking, due diligence, communications, leadership transition and governance
  • Guiding the foundation through a company merger

To learn more about Philanthropic Advisory Services offerings, including custom engagements, please contact us.

Technology

AMPLIFY YOUR IMPACT
Our tech platform was built with one thing in mind: more effective philanthropy.

Online Resources

Web-Based Foundation Management Tools

  • Cloud-based platform
  • Orientation and training

Online Research

  • Database of more than 1 million IRS-approved charities
  • Access to GuideStar® and Charity Navigator
  • Charity research requests

Online Granting

  • Automated granting to IRS-approved charities and others
  • Customized grant approval workflows
  • Favorite charities list for expedited granting
  • Hardship, emergency, and medical distress grants to individuals
  • Grant certificates

Advanced Online Resources

Online Tracking

  • 5% minimum distribution requirement
  • Grant history by date, donor and program area
  • Pending grants
  • Funding history by date and donor
  • Foundation expenses

Online Reporting

  • Over 25 customizable report templates
  • Financial activity, expenses, grant history

Online Administration

  • Foundation document archive
  • Personal profile
  • Report codes
  • Contact file

APPLICATIONS

  • Customized grants management platform
  • Online applications
  • Online eligibility quiz to vet applicants
  • Communication and collaboration tools
  • Correspondence management

OUTCOMES

  • Online portal to monitor grant performance and impact
  • Uploading additional grant history
  • Multi-year commitments
  • Program areas with budgeting
  • Multi-payment grant management
    › File management

APPLICANT PORTAL

  • Complete, view and track applications and outcome reports
  • Track status of grant payments
  • Create and manage charity profile
  • Information hub

As Your Foundation Grows, We Grow With You

You get the horsepower and expertise you need to make a real difference without overseeing a team of advisors or building a bureaucracy. Whether you need support for essential functions today, or guidance to explore some of the more complex capabilities of a private foundation tomorrow, you can rest assured that we’ll be with you every step of the way.

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]]> Organizing and Informing Giving https://foundationsource.com/client-stories/case-study/organizing-and-informing-giving/ Tue, 27 Sep 2022 17:50:57 +0000 https://foundationsource.com/?p=1445 The post Organizing and Informing Giving appeared first on Foundation Source.

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Challenge:

When we met her, this successful actress already had a private foundation, and she had a good handle on its finances. She didn’t need us to monitor the finances or prepare the foundation’s tax returns, but she did need help organizing her giving. Every time she wanted to review her grantmaking history with the various organizations she supports, she had to comb through files stuffed with acknowledgment letters and receipts. Researching new potential grantees was a hassle and, since she expected her grandkids to take over the foundation in a few years, she wanted to get an organizational system in place that would make it easy for them to take the reins.

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Collaboration:

To fund her grantmaking, Foundation Source set up an operating account for the client at Sterling National Bank. Going forward, since all of the grants and qualified expenses would be paid out of this operating account, the actress, her accountant, and anyone else she permits will be able to quickly and easily review the foundation’s transactions. Foundation Source also introduced her to Impactfully, our exclusive “command center” that enables clients to research nonprofit organizations, make grants, and review their grantmaking history from any location, at any time.

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Outcome:

The client loves how easy it is to make grants using Impactfully. In fact, it has completely changed the way she gives, helping her track how many times (and how much) she’s given to a specific charity and enabling her to access important information on organizations through sources like Guidestar® and Charity Navigator.TM Moreover, now that the foundation’s house is in order, the actress doesn’t worry about burdening her grandchildren with its day-to-day operations. “Foundation Source has made my life so much easier,” the client says, “It’s a gift from heaven!”

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