You’ll have more time this year for strategic philanthropic and financial planning.
Effective planning requires time—something there never seems to be enough of during the year-end holidays. While the actual process of starting a foundation is easy with the help of experts—Foundation Source can help you do so in less than a week—why try to squeeze it in during the holidays when, likely, you’re already extra busy? Setting it up sooner will afford you, your foundation members and your professional advisors ample time to best plan for how you can maximize your charitable giving and benefit your finances.

You’ll build awareness of your foundation.
With your foundation established before giving season, you’ll be ready to engage with the myriad charities that will surely solicit your support. While you likely can’t assist all of them, welcome the chance to learn about them and promote your foundation to increase visibility of your charitable focus. Another great way to build awareness? Ensure your good works have a great website.

You’ll start and secure your family’s legacy
Private foundations are designed to operate in perpetuity, making them the ideal tool for creating a lasting legacy. When you link your name with your philanthropy through a foundation, it expresses your values and provides a blueprint for future generations to carry your charitable vision forward. Plus, the State of Delaware’s database, a preferred location for the incorporation of foundations, has limited names…so the sooner you can lock yours in, the sooner your legacy will be secured.

Want to see the rest of the benefits?
Check out our infographic.

Did you know…
We can help you create a private foundation in less than a week! Call 800.839.0054 or send us an email at info@foundationsource.com. Together, let’s #begiving.

The post The Busy Giving Season Is Starting Soon: Here’s How to Make the Most Of It appeared first on Foundation Source.

#2 Strategic Philanthropy
With this proactive giving approach, you’re in the driver’s seat for determining the problems you want to address and how to solve them, rather than reactively supporting initiatives driven by a charity. This approach also involves robust reporting so you can measure your charitable impact. Ideas: Make grants and loans to charities, start a scholarship program, conduct research, or establish a food pantry.

#3 Trust-Based Philanthropy
Giving in this way means you view your grantees as the charitable experts. You grant them unrestricted funding, trusting them to deploy your support most e‡ectively. You’re also more
transparent in your communication and you streamline your reporting requirements so grantees can focus on what’s really important – achieving charitable impact.

Want more?
Check out the full infographic to see all the diverse ways private foundations can give.

Want to See Other Ways You Can Give Back with a Foundation?
From granting to individuals to direct charitable activities, foundations are a powerful charitable giving vehicle, allowing you so much versality—and the chance to be creative. Check out our white paper on the 10 Things You Didn’t Know You Could Do with Your Foundation.

Want to learn more about the ways we support philanthropists with private foundations?
Schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

The post 5 Ways Private Foundations Can Give appeared first on Foundation Source.

1. only for the Ultra-High-Net-Worth
2. difficult and time-consuming to establish
3. burdensome to operate
4. expensive due to continual investment in staff and infrastructure

Today’s foundations benefit from advancements in technology as well as guidance and outsourcing from philanthropy experts like Foundation Source. These professionals can provide varying degrees of support according to one’s needs and philanthropic goals. They can work directly with an individual or family or can partner with financial advisors to help them provide charitable giving guidance to their clients. (A growing number of financial advisors are adding philanthropy expertise to their practice. They’re realizing it can help them engage more personally with their clients by addressing meaningful topics like family values, motivations for giving and how to establish a charitable legacy. These discussions help to provide more holistic financial advice.)

The private foundations of today are a whole new and exciting ball game – and a realistic charitable giving option for more people than one might expect. Let’s discover the truth about them by dispelling these five common myths.

Myth #1: You need at least $5 million to start a foundation.

Fact: Today more than 67% of all private foundations have less than $1 million in assets. While foundations’ administrative costs used to require initial funding of at least $5 million, it’s now practical to start a foundation with less than $1 million in assets, thanks to savings realized through online foundation management platforms such as our Impactfully platform and professional outsourced support and advisory services such as those provided by our Foundation Source experts.

Myth #2: Private foundations are time-consuming, difficult and expensive to set up.

Fact: With the help of philanthropic experts like Foundation Source, a private foundation can be established and operational in less than one week.

Simply put, a donor needs only to do three things to start a foundation:

1. determine a name for their foundation
2. complete a brief set-up questionnaire to denote who will fund the foundation and where its investment account will reside
3. fund the foundation to begin giving

Myth #3: Private foundations are a burden to operate.

Fact: With today’s technology solutions and expert guidance and outsourcing, running a foundation is much easier and more enjoyable than it was decades ago. For example, Foundation Source’s robust Impactfully platform offers a dynamic operational dashboard that helps foundations consolidate their operations and administration and efficiently manage their grantmaking. With it foundations can, for example, file their taxes; review their financial accounts; engage with their nonprofit partners, board members and staff; create, distribute and review grant applications; and measure the impact of their giving.

For additional support, foundations can turn to expert philanthropic advisors for guidance in myriad charitable giving issues such as developing a charitable focus or mission, running an effective board meeting or communicating with a grantee.

Myth #4: Private foundations require continual investment in staff and infrastructure.

Fact: Such an investment is optional, thanks to the flexible nature of foundations as well as outsourcing support. From a flexibility standpoint, when one starts a foundation, they can essentially do as much or as little with it as they wish, from simply making straightforward annual charitable donations to elaborately managing myriad philanthropic initiatives.

For donors who choose the latter and aim to do great things with their foundation but don’t want to hire staff and manage charitable programs, outsourcing from management solution providers like Foundation Source is available. These experts can serve as the foundation’s virtual staff or work in partnership with its founders and advisors. They can file taxes, monitor compliance; handle back-office responsibilities; and, in our case, provide the foundation with a purpose-built platform.

Myth #5: Only cash can be donated to a private foundation.

Fact: Private foundations can be funded with a wide variety of assets. And unlike other giving vehicles that often require liquidation of donated assets, private foundations can continue to hold them. This can be particularly advantageous if the assets are expected to continually increase in value. These assets could include:

• Publicly traded securities
• Alternative assets, including private equity and hedge funds
• Real estate
• Tangible assets (art, jewelry, collectibles)
• Intangible personal property (copyrights, patents, royalties)
• Life insurance and annuities
• Cryptocurrency

Running a private foundation can be one of life’s most rewarding experiences. And with the help of robust technology platforms and philanthropic experts who can assist with the legal, accounting and compliance requirements of private foundations, donors can focus on the deeply satisfying part of their giving – effecting positive change in the world.

Want to learn more about starting a private foundation?
Read about the benefits and considerations of a private foundation beyond tax savings.

Also be sure to subscribe to our blog so you don’t miss a beat!

Have a Question?
Schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

The post Fact or Fiction: Setting the Record Straight About Private Foundations appeared first on Foundation Source.

• Tips for How and When to Donate During a Crisis: provides a guide to navigating the giving season in a year filled with natural disasters and humanitarian crises, suggesting strategies for balancing immediate and longer-term support.
• 5 Giving Strategies for Sophisticated Investors: details five creative strategies that the savviest philanthropists use, often with guidance from professional advisors, to achieve tax-wise social impact.
• Philanthropic Community: Advice From Your Peers – this special compilation asks foundation leaders for the piece of advice they most want to share with other philanthropists to find meaning and success in giving.
• Be Giving: a new podcast series that explores the incredible impact charitable giving can have on individuals, communities and the world at large through compelling conversations with notable guests and experts. The podcast is available through Apple, Google, Spotify or the web.

Check out the 2023 full guide.

Want to learn more about the ways we support private foundations?
Looking for an easier way to manage a foundation or want to start a foundation? Our philanthropic specialists are here to help! To learn more, schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

The post Giving Tuesday: Resources To Maximize Your Year-End Giving appeared first on Foundation Source.

Check out the infographic>>

Let’s Talk About One More Incentive
When you start a private foundation now, you’ll get the first year of service for only $5K! It’s never been easier, faster or more cost effective—act now to get this limited-time offer!

Hurry, Offer Ends Dec 22! >>

The post Give More, Get More: A New Incentive For Starting a Private Foundation Before 2024 appeared first on Foundation Source.

Tax Deductions
When you start and fund a private foundation before the end of the tax year, you are eligible for a qualified charitable deduction of up to 30% of your adjusted gross income. This is especially attractive in years when you have excess income or realized capital gains. Once contributed, your assets can continue to grow on a tax-advantaged basis.

Advanced Charitable Toolkit
Commit to your philanthropic goals with a private foundation and unlock a sophisticated suite of giving tools. In addition to making grants to public charities, foundations enable you to award scholarships and prizes, conduct direct charitable activities, make hardship and emergency gifts directly to individuals, support mission-related investments, make low or no interest loans to charities, align the assets in your endowment with your philanthropic mission, and much more.

Start Your Legacy Now
Private foundations are designed to last in perpetuity, making them the gold standard for creating a lasting legacy. When you link your name with your good deeds, it expresses your values and provides a blueprint for future generations to carry your vision forward. Also, the Delaware database, a preferred state of incorporation, has limited names…you can lock in your family foundation name now and ensure your legacy.

Want to see the rest of the benefits?
Check out our complete resource.

Did you know…
We can help you create a private foundation in less than a week! Call 800.839.0054 or send us an email at info@foundationsource.com. Together, let’s #begiving.

The post Top 5 Reasons to Start a Private Foundation Before The Year’s Over appeared first on Foundation Source.

If appreciated stocks are contributing to your client’s bottom line, one tax-effective strategy is to contribute up to 20% of their adjusted gross income (AGI) to a private foundation in the form of highly appreciated, publicly traded stock held for at least a year.

If your client were to sell these securities, they could have tax liability arising from long-term capital gains. If they’re in the highest marginal tax bracket, the effective long-term capital gains tax rate would be 23.8% (taking into account the 3.8% net investment income tax). However, if they were to take that stock and donate it to their foundation, they’d be eligible to get a fair-market value deduction and avoid the substantial capital gains tax.

UNLIKE OTHER CHARITABLE SOLUTIONS, THE FUNDS CONTRIBUTED TO A PRIVATE FOUNDATION STAY UNDER YOUR CLIENT’S DIRECT CONTROL AND YOUR FINANCIAL MANAGEMENT

Example: Let’s say Mary Smith, who is in the highest marginal tax bracket, bought stock for $100,000 five years ago, which has since appreciated to $1M. If she were to sell the stock for its current value, her capital gains exposure would be $214,200 ($900,000 gain at 23.8% = tax bill of $214,200), leaving $785,800 for her personal benefit. If, instead of selling the stock, she donated it to her private foundation, her foundation’s tax rate would be, at most, its 1.39% excise tax. The resulting tax bill would be $18,000, leaving $982,000 for charitable purpose under her direct control.

Make a Combined Donation of Stock and Cash

Alternatively, Mary could combine her donation of highly appreciated stock with a cash donation.

Example: Let’s say Mary’s AGI is approximately $5M. Her AGI maximum is therefore $1M for stock (20%). If she were to donate cash, she’d be permitted to donate up to 30% of her AGI—an additional 10%. She could therefore donate that same $1M of highly appreciated stock used in the previous example along with an additional $500,000 in cash. Assuming she has no other limitations (this example is exclusively for illustrative purposes), she would be eligible for a deduction of up to $1.5M. Meanwhile, her private foundation would only pay a 1.39% excise tax on the stock’s gain of $900,000, resulting in a tax bill of $18,000 and a $982,000 endowment for her foundation.

Donate Other Types of Appreciated Assets

Private foundations can be funded with a wide variety of assets. And unlike other giving vehicles that require liquidation of donated assets, private foundations can continue to hold them. These assets could include:

• Publicly traded securities
• Alternative assets, including private equity
• Real estate
• Tangible assets (art, jewelry, collectibles)
• Intangible personal property (copyrights, patents, royalties)
• Life insurance and annuities
• Cryptocurrency

Note that not all contributions are treated the same with respect to cost basis and deductibility. Whereas cash donations are deductible up to 30% of AGI, assets are generally deductible at the lesser of cost basis and fair market value (with the exception of certain publicly traded stock, as mentioned above) for 20% of AGI. Any contributions that exceed the applicable AGI caps can be carried forward for up to five years. And if your client has a charitable remainder trust, they can name their foundation as the beneficiary.

Additional Benefits of Private Foundations

Tax savings aside, private foundations offer nearly endless capabilities for investors to engage in philanthropy. Here are just some of the things one can do with a foundation:

• Make grants to non profit organizations – nationally and internationally
• Makegrants directly to individuals in times of emergency or hardship
• Issue loans to nonprofit organizations that are aligned with the foundation’s mission
• Create and run charitable activities (e.g., a camp for children with special needs; a shelter for victims of domestic violence)
• Establish scholarship/award programs for individuals
• Invest in for-profit companies that are aligned with the foundation’s mission

Additionally, private foundations afford investors the opportunity to build a meaningful legacy of giving and to unify their families through philanthropy.

(Almost) Immediate Gratification

Because Foundation Source can establish a new private foundation in less than a week, you don’t have to wait to lock in your client’s tax savings. They can get started on their philanthropic legacy right away! Schedule a call with us or reach us at 800-839-0054 to learn more about the important benefits of a private foundation.

The post Reducing the Tax Liability of Appreciated Assets appeared first on Foundation Source.

The post The Top 10 Advantages of Having a Private Foundation appeared first on Foundation Source.

Some new foundations find that they already have a focus area or areas of interest. These are often based on:

• A founder’s personal philosophy.
• A company’s primary business or area of operation.
• A cause that inspired the creation of the foundation. For example:

> If the foundation was funded from the estate of someone who battled cancer.

> If the foundation was created with a geographic focus, such as supporting after-school programs in their local community.

#2: Starting with a Blank Slate

If you don’t yet have a focus area, one way to get started is by selecting a handful of issues to support while learning the ropes, gathering information and formalizing an approach. Remember that it’s okay to experiment and take risks. Starting with a blank slate can inspire creativity, help you clarify what’s important to your foundation and provide an understanding of your giving philosophy at a deeper level than you may have explored. Also keep in mind, you don’t need to be an expert in your area(s) of funding to get started—you just need to care about making a difference. To identify potential funding areas, consider:

• Finding topics that have proximate relevance, whether derived from life experience, the local community, career paths or corporate goals.

> Define the impact you want to see and then identify organizations, programs or projects that will move towards that goal. For example, a founder for a tech company may be interested in finding ways to grow opportunities in STEM education or a founder who grew up in poverty may want to focus on food insecurity.

> Get firsthand experience with the issues—this can be helpful in informing which organizations/ projects to support. This can be accomplished in a variety of ways, including informal conversations and interviews with nonprofits, people impacted by the issue(s) and other funders; site visits; primary research; and meta-analysis.

> Recognize opportunities to align foundation work with that of the parent company.

• Experimenting with different approaches.

> Try different ways to accomplish a goal and see what resonates. For instance, if your goal is improving access to quality education, you could try funding a charitable organization with a similar mission, awarding scholarships and running Direct Charitable Activities (when a private foundation runs a program or activity by itself rather than relying on a nonprofit to carry it out).

> Try funding different topic areas within a similar geography and see what has the most meaning to the foundation and the community. For instance, if your goal is to support a particular county, you could simultaneously fund initiatives focused on beautifying public spaces, economic growth and low-income housing to see if one issue gets more traction than another.

Interested in the #3 way to create philanthropic programs? Check out the full article.

Want to Learn More?
Spend time browsing our Path to Impact Resource Kit, where you can listen to the complete discussion with foundation leaders and access bonus resources from our Philanthropic Advisory Services team. Enjoy!

Looking for More Philanthropic Support?
We’re here to help! Schedule a call with us here or call 800-839-0054. Together let’s #begiving.

The post The Top Ways Foundations Can Create Programs For Their Philanthropy appeared first on Foundation Source.

Before plunging your philanthropy headfirst into a funding area, ask yourself if you understand the context by which your giving will really help make an impact. For example, if your goal is to beautify a park, it first makes sense to know the types of plants that will grow and thrive there—along with those that are invasive.

Another way to bring this tenet of impactful giving to life is if you are focused on a particular issue, such as minimizing high school dropout rates. In order to achieve your goal, you first need to know the reasons, which are typically different for boys versus girls. Thinking through these details at a granular level before you start granting can help your giving be more impactful in the long run.

Know the Players

No matter the cause or issue area you’d like to support, there are always other players both at the organization you are funding and also like-minded funders in the space you are targeting with your strategy. This means the chances are good that some other foundation or individual philanthropist is looking to achieve the same outcomes.

By coming together and joining forces, perhaps you can fill a gap that someone else hasn’t been able to address. Remember that you don’t have to go it alone—there is power in the collective, so strive to convene experts and learn from each other.  You should maximize the benefits of your grant and its chances of success by doing your due diligence much the way you would for a business investment.

So, if you want your giving to yield the greatest results, remember that your philanthropic strategy should always be research and reality based.

Looking for More Tips on Impactful Giving?
Stay tuned for part five of our Tenets of Impactful Giving Series on defined roles and checkout the rest of our series.

Want to talk to a philanthropic specialist?
Schedule a call with us here or reach us at 800-839-0054. Together, let’s #begiving.

The post The Tenets of Impactful Giving Series Part 4: Get Granular with Research & Reality-Based Philanthropy appeared first on Foundation Source.