Read on to learn more about their journey—from the challenge they faced after launch to a solution they implemented that made all the difference.

Launching The PRI Lending Program
The Archarios Foundation aimed to provide capital funds to nonprofits and support projects that aligned with their mission to provide modern infrastructure for housing and educational facilities for women and at-risk youth. However, once the program was launched, managing and collecting repayment turned out to be more complicated and time consuming than expected.

“It only took one loan to realize we needed more than an Excel spreadsheet to properly manage, track and make accurate accounting entries,” said Steve Rabago, Founder and CEO of the Archarios Foundation.

Steve considered the PRI challenge through the lens of his other endeavor, ZimpleMoney, and realized that the platform originally designed to help private lenders track loans, automate accounting, and streamline payments online could be deployed for PRIs. A great partnership between the foundation and ZimpleMoney emerged. “Once we implemented ZimpleMoney’s private lending platform, we were able to grow our single loan to a larger, more impactful portfolio of PRI loans,” added Steve.

By implementing ZimpleMoney, the foundation was able to:

• Initiate the capital improvements before the non-profit raises money or secures capital grants.
• Earn interest on money loaned.
• Use the PRI loan as a portion of the foundation’s minimum annual contribution.
• Proactively track loan performance and repayment with real-time visibility into loan balances, payment history and delinquency rates.
• Provide online tools for flexible loan repayments.
• Generate detailed loan and portfolio reporting.
• Make it easier for their accountants to properly report PRIs to the IRS.
• Have secure login access to the records on the platform for the borrower and lender.
• Help nonprofit partners complete their capital investment and work with other donors to help repay 100% or portions of the outstanding PRI loan.
• Provide a mechanism for the foundation to convert its loan into a grant and maintain an accurate financial record.
• Grant access to the foundation’s records to accountants and advisors.

ZimpleMoney helped the Archarios Foundation manage and scale its PRI lending program while providing critical capital investment and financial support to organizations that support its mission.

We celebrate entrepreneurs like Steve who are similar to our own founders here at Foundation Source—two philanthropic brothers who saw a need for professional management of family foundations. When they couldn’t find a solution in the market, they created their own.

Thanks to the Archarios Foundation for sharing their story with us!

Want to Learn How Foundation Source Support Other Types of Advanced Grantmaking?
Whether you’re interested in making program-related investments or grants-to-individuals, take a few minutes to learn more about how we support private foundations with an upcoming live presentation. Together, let’s #begiving.

The post How One Foundation Scales Its PRI Lending Program for Grantees appeared first on Foundation Source.

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.

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.

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.

The post How a Private Foundation Is Keeping An (Extended) Family Tradition Going Strong appeared first on Foundation Source.

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.

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.

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.

The post Connecting a Private Foundation to An Opportunity for Literacy appeared first on Foundation Source.

I’ve been through some difficult times, and animals have always been there for me. I am therefore dedicated to ending animal cruelty in all its forms, whether that’s providing medical treatment for sick animals, rescuing wild mustangs, or educating the next generation on kindness, compassion, respect, and responsibility for animals. The Wags and Menace Make a Difference Foundation provides medical treatment for sick animals in Colorado, the United States, and in five of seven continents. The foundation funds organizations and activities that benefit animals, and inspires, teaches, and motivates other individuals and organizations to achieve similar objectives.

What inspired you to launch a private foundation?

I lost my father when I was very young and it was devastating. I still deal with it every day. I was the youngest of three, and animals were there for me. They were my teachers. I feel that I have a spiritual obligation to be their voice.

What do you know now about being a grantmaker that you wish you knew starting out?

I did not realize how much my volunteering impacted the growth of fundraising for sick and homeless animals. It’s not just about donating the money—it’s about showing up. And I showed up before I had the money. I try to build momentum with people; be infectious; be part of the solution. Volunteering is a spiritual, ethical component to being a human being. That’s why I was pulling horses out of mud during a flood in Northern Colorado. I want to be involved.

Want to Read The Rest of the Story?

Check out our full interview with Cindy Lee here. Also, be sure to check out our client stories for even more giving inspiration!

Want to Learn More?

Whether you’re creating your first private foundation or want to professionalize your foundation with robust tools and applications purpose-built for your needs, Foundation Source is here to help. Schedule a call with us here or reach us at 800-839-0054. Together, let’s #begiving.

The post Saving Animals: A Conversation with Cindy Lee appeared first on Foundation Source.

A majority of donors maintained their status quo in 2022

• 74% did not change their grantmaking activities
• Of those that did: 45% increased the number of grants they made, 39% increased the size of grants and 23% increased the number of grantees supported
• 83% didn’t change the asset allocation of their foundation’s endowment
• Of those that did: 29% added equities and 32% added liquidity, with 40% noting the changes were due to the economic environment

2023: Taking an Optimistic View

Most donors plan to maintain or expand their activities

• 58% of foundations have no planned changes and will continue to pursue their long-term strategy
• 21% plan to slightly expand their giving
• 43% plan to add to their endowment in 2023 with 62% of that group citing a planned addition and 18% expecting a liquidity event

Another interesting finding? Our survey respondents also noted that managing succession, hearing from other funders, and understanding the unique features of foundations are topics of highest interest. If you want to learn more about the giving and investing trends of our clients, check out our 2022 Report on Private Philanthropy.

Want to Learn More?
Whether you’re an existing foundation looking for an easier, better way to run your foundation’s operations or you’re looking to start a foundation, please contact our phenomenal team of philanthropic experts. We’re always here to help! Together, let’s #begiving.

The post Generosity & Optimism Are Growing for Donors: 2022 Client Survey appeared first on Foundation Source.

• Increased income tax rates
  • Individuals to 39.6% (ordinary) and long-term capital gains (LTCG) and dividends for taxpayers with adjusted gross income (AGI) of more than $1 million
  • Increase in corporate tax rate from 21% to 28%
• Gifts, bequests, trust distributions as capital gains realization events
  • Loss of capital gains“step-up”
  • Gifts and certain trust distributions as realization events
  • 90-year trust realization event
  • $1 million exclusion

THE POTENTIAL IMPACT ON CHARITABLE GIVING

• The top marginal individual income tax rate would increase from 37% to 39.6% for taxable income in excess of the top bracket threshold—as tax rates rise, the value of itemized deductions also rises.
• For taxpayers with AGI of more than $1 million, long-term capital gains and qualified dividends tax rate would increase to match the proposed ordinary income tax rate. For a taxpayer with income in excess of $1 million, rates would jump from 20% (or really 23.8%, including the net investment income tax) to 39.6% (or really 43.4%, including the net investment income tax).

2. The House Ways and Means Proposal

• Return of proposed estate tax changes instead of capital gains tax
  • Accelerate “sunset” of current estate tax levels (effectively dropping in half from $11.7 million to about $5.5 million)
  • No mention of loss of “step-up” or gifts/distributions as realization events
• Income tax changes
  • Highest personal rate to 39.6%; capital gains rate to 25% – 3% surcharge for in come over $5 million
  • Corporate rate to 26.5%
  • Changes to certain cross-border tax rates and rules
• Changes to grantor trusts (pulled into taxable estate)
• IRA changes
  • Increased required minimum distribution for high-income taxpayers with large balances ($10 million plus, and can never stay over $20 million)
• In terms of charitable giving, like with the Green Book proposals, higher taxes lead to a more valuable deduction
• Estate taxes
  • Brings a lot more people into the estate tax net
  • Eliminates a lot of common planning for reducing estates (e.g. grant or trust planning) – Eliminates valuation discounts
  • Makes gifts to charity and certain charitable lead trusts far more valuable

3. The ACE Act

Co-sponsored by Senators Angus King (I-ME) and Chuck Grassley (R-IA)

• Private foundations would no longer be allowed to count grants to DAFs towards meeting the annual minimum distribution of income requirement (MDR) if the private foundation retains advisory privileges.
  • Note: This is not a concern for a terminating foundation or for a foundation that grants to a DAF account over which the foundation has not retained advisory privileges.
• Private foundations would no longer be able to count administrative expenses (for example, payroll, travel, and other similar expenses) of certain insiders towards meeting the MDR.
  • Note: This limitation is targeted only at insiders who are family members of a foundation’s substantial contributors. The payroll and expenses of non-family members would still count towards satisfying the MDR.
  • Note: This rule would still allow foundations to pay salary to and cover the expenses of the targeted insiders—these expenditures would not be taxable expenditures. However, such expenditures would not count towards satisfying the MDR.
• Private foundations that choose to sunset within 25 years would pay no excise tax. However, if such a foundation makes prohibited grants to related foundations, or it opts not to sunset at the point in the future when it is required to do so (after not paying excise taxes for 25 years), the foundation would have to pay the IRS any taxes it saved because of this tax break.
• Private foundations would pay no excise tax in any year in which it satisfies a voluntary 7% payout requirement determined by reference to the value of the foundation’s assets on the first day of the tax year.
• A private foundation that uses DAFs to avoid “tipping” of the public charity status of a donee may no longer be able to do so, as distributions from DAFs will be treated effectively as distributions from the private foundation.

THE POTENTIAL IMPACT ON DAFS

• For non-community foundation DAFs, generally, the legislation would allow a current charitable deduction for cash or marketable security gifts to a DAF only if such gifts are distributed by the DAF to charities within 15 years of the first contribution to the fund and all advisory privileges terminate.
• There are narrow exceptions to these rules for DAFs that are set up at community foundations, but the exceptions apply only for amounts donated up to $1 million or there is a 5% MDR on the individual qualifying community foundation donor-advised fund.

The post Philanthropy in Transition appeared first on Foundation Source.

“Our students are one flat tire away from dropping out of school,” said Abigail Seldin, CEO of SHSF. “Conversely, they may be one consistent, well-designed, affordable bus route from completion.”

Through their work, they continue to see strong engagement from both policymakers and advocates. SHSF’s data provided the foundation for the bipartisan PATH to College Act, which captured all of the recommendations of the 2021 SHSF Public Transit Map research brief and has now passed in the House twice. Their report was credited in the Congressional announcements and an endorsement letter that attracted sign-ons from the leading organizations in higher education. They look forward to sharing additional media and state map launches later this fall.

We are proud to serve SHSF and can’t wait to see the continued impact they are having!

Have a foundation story you’d like to share?
Write to us at marketing@foundationsource.com for a chance to be featured in an upcoming blog!

Want to learn more about the ways we support private foundations?
Whether you are looking for support for your existing foundation or want to create a private foundation, our philanthropic specialists are here to help. To learn more, schedule a call with us here or reach us at 800-839-0054. Together, let’s #begiving.

The post Tracking Community Colleges’ Proximity to Public Transportation appeared first on Foundation Source.

Evaluating a nonprofit to ensure there’s alignment with your mission really depends on the type of funder you are—or want to be. Are you an innovator? An advocate? A change agent? A capacity builder? For example, let’s say you want to contribute to education. There are several ways to go about this, but you want to be sure the steps you
take tie back to the defined role you want to play in fulfilling your philanthropic objectives. Do you want to advocate for education change on Capitol Hill? Or build schools in Africa? Those are two very different paths, so before you find the right nonprofit, it’s important to define your philanthropic personality.

EVALUATING A NONPROFIT TO ENSURE THERE’S ALIGNMENT WITH YOUR MISSION REALLY DEPENDS ON THE TYPE OF FUNDER YOU ARE—OR WANT TO BE.

2. Does the Organization Have a Clear Mission That Aligns with Your Passions and Values?

Look for specificity. It should be focused, concise and clearly explain the entity’s unique set of skills for strategically solving problems. Ambiguous intent with statements such as “We’re dedicated to making the world a better place” often leads to vague, intellectual work. What is the overriding purpose of the organization? Is it clearly focused on an issue or cause that matters to you? When you do receive a proposal, does the need addressed align with your mission and objectives? It should be a clear fit— from the population they serve to their organizational strengths.

3. Does It Meet a Critical Need?

In other words, does the nonprofit matter? You need to determine that there’s a clear need for its services and whether there’s substantial data available to justify its mission and e orts. It’s important to understand what its target population is and what percentage of that population it serves. Then you can examine whether these numbers have increased or decreased over time.

4. Do You Agree With Its Approach?

How is the nonprofit fulfilling its mission? A group of nonprofits with similar missions, say ending childhood hunger, may approach the same problem from di erent angles and perspectives. Be sure you agree with the organization’s strategy and tactics for addressing the issues you care about. Do they make sense? Are they based on credible research? Are you comfortable with them? For example, if the nonprofit frequently lobbies state and national legislatures yet you dislike politics, it may not be the right fit for your donation.

To compare nonprofits with a similar focus, visit “watchdog” organizations like CharityWatch, Charity Navigator, Give, and GiveWell. These websites apply uniform standards to grade the financial and programmatic quality of nonprofits. They will also help you beware of scams, fraudsters, and fake charities trying to trick unwary, but well-intentioned donors.

5. Is It Making a Positive Impact?

For many people, impact-driven philanthropy is a top priority. Will you achieve a bonafide positive impact by donating? Can the nonprofit prove its success? Does it report tangible evidence that it’s successfully meeting its goals? If results aren’t publicized, consider it a red flag, and instead donate to a nonprofit that tracks data and provides metrics of success. After all, you have to trust the recipient to make your contribution count.

To take it a step further, choose a nonprofit that will partner with you to measure impact. For example, a nonprofit could work with you to provide serial funding with future gifts that are contingent on results. But don’t base success only on output. Instead, look at the outcome. For example, if your goal is to help at-risk school children do better
in class–and you want to gauge how e ective a charity’s after school program is in achieving this—look beyond how many kids participate. That’s the program’s output, but what may really count is its outcome; how significantly the children’s performance in school improves.

ONE OF THE BEST WAYS TO GET TO KNOW YOUR PROSPECTIVE NONPROFIT IS TO PAY THEM A VISIT. MEET THEIR LEADERS AND CONSIDER VOLUNTEERING FOR THEM.

6. Does It Have a Solid Reputation and a Credible Board of Directors?

Check to see if the nonprofit has been in the news—and if that news has been positive. Does it have an upstanding reputation? Any allegations of bad conduct? Even if you suspect that the organization has been unfairly tarred by controversy, whether deserved or not, negative publicity can compromise success.

Additionally, look at the board of directors. Are its members chosen logically and thoughtfully, or are they seemingly chosen at random? Is the board dominated by the founder and a few insiders? Ideally, a mix of influential individuals and rainmakers should comprise the board along with experts relevant to the organization’s mission.

7. Are They Transparent?

Do they make their financial information readily available? If so, be sure their expenses are in line with their budget and look at their 990-PF form to verify its tax-exempt status. It’s also a good idea to do a quick search to see if other reputable donors are funding the organization. If they’re hiding something, it’s in your best interest to move on.

8. Have You Looked Locally?

You don’t have to look far from home to find those who are in need. Nonprofits with local ties, particularly with communities that are marginalized, are often disproportionately impacted. This has been starkly illustrated by COVID-19, racial and social justice concerns and recent natural disasters that are having the greatest impact on communities of color, low-income communities, LGBTQIA+ people and people with disabilities. Also, try seeking out nonprofits taking the long-view approach as opposed to just focusing on the immediate aftermath of attacks, situations and extreme weather-related events.

9. Have You Done a Site Visit?

One of the best ways to get to know your prospective nonprofit is to pay them a visit. Meet their leaders and consider volunteering for them. This is a great way to get to know the people, how they operate and the quality of the work. Site visits also help you build relationships–it’s a great first step to learn more about them even before you ask for a formal proposal or grant request. However, a site visit alone isn’t sufficient— what you learn while there must be considered in the context of the other steps to ensure the right fit.

10 Are You Factoring in Flexibility and Responsiveness When It Comes to Giving?

It’s not always what you give–it’s also how and when you give that matters, so that nonprofits can use the funding in the way that is most important at that moment. For instance, nonprofits everywhere have been impacted by changes in funding due to the acute and unpredictable needs that emerged in 2020, as well as supply chain issues and a reduction in government support. To help them keep the lights on, consider giving to general operational purposes rather than specifying how the funds should be used.

YOU DON’T HAVE TO LOOK FAR FROM HOME TO FIND THOSE WHO ARE IN NEED.

NEXT STEPS

If you’re not finding the information you need, contact the nonprofit. And if you’re contemplating a sizeable gift or ongoing commitment to the organization, this warrants additional due diligence to ensure your giving creates the desired impact.

By researching before donating, you’ll gain valuable insight and experience. With time, you’ll acquire the skills to determine when your donation isn’t just a gift, but an investment in progress.

The post Every Dollar Counts: How To Evaluate a Nonprofit appeared first on Foundation Source.

Having supported thousands of private foundations for more than 20 years, our philanthropic experts found that our clients rely on the five following touchstones to help family members adopt a giving mindset and create a foundation that inspires younger generations.

1. Instill Values & Traditions

o Involve children in the causes you care about
o Work together as a family to give back
o Teach that giving is a habit, like brushing your teeth

2. Maintain Family Ties

o Hold quarterly or annual family meetings
o Schedule meetings outside of the holidays to stay focused on the purpose
o Provide virtual options for those who can’t attend in person

3. Deepen Social Consciousness

o Conduct a nonprofit site visit with family to better understand needs
o Use the foundation to discuss problems and how to solve them

4. Increase Personal Fulfillment

o Try psychologist Martin Seligman’s exercise to have the family engage in “one pleasurable activity and one philanthropic activity”
o Write about both experiences and have the family discuss

5. Develop Skill, Knowledge & Awareness

o Task young children with simple acts such as donating birthday gifts or toys
o Involve young adults in the foundation to develop skills such as leadership and financial management

Want to get the complete checklist?

Philanthropic Support Is Just a Call Away
Have questions about philanthropy? Want to talk about a specific client? We’re here to help! Schedule a call with us here or call 800-839-0054.

The post Q4 Conversations: Engage Clients with This Family Philanthropy Checklist appeared first on Foundation Source.

Engaging the next generation presents a powerful opportunity for a family foundation and its continued legacy. Getting family involved is a pivotal chance to connect shared history and values across generations of your clan—whether it’s the stories that matter to your families or the ideals that you’re expressing through your foundation. For many families, next-generation engagement can also be an amazing moment that sets the stage for the kinds of growth, connection and maturing that family foundations experience when rising members step into leadership roles—or help evolve new ones.

Blending new voices brings diversity, new strengths and developing roles to your mission. And the more diverse your decision-making body is, the better decisions you make. In these ways, involving succeeding generations of family members becomes a learning experience that ensures continuity, too, which ultimately can enhance your grantmaking and lead to increased impact.

2. Acknowledge the Challenges

It’s a fact: navigating family dynamics is hard but necessary. You and your family members may not have identical values, so it can take some work to recognize and identify what your shared values really are. Reaching that point means taking stock of individual interests and beliefs and then creating a common, shared vision from which you all can move forward. Having different views is a given; the task is to figure out how to align them in the best ways.

To make this a success, it’s also important to recognize that family foundations are often mirrors of the family culture, dynamics and communication styles behind them. That defining trait makes the ability to communicate about differences and similarities alike—and navigate around any dysfunction—essential challenges of working together as a family.

One way to approach these inherent challenges is to start early with a learning emphasis. What do your children, grandchildren or other relatives really know about your foundation? As they grow, for example, perhaps they can get involved in the selection process of charities to fund. Or maybe they can accompany you to site visits or events sponsored by the organizations you help.

Another step is to think about how to work empowerment into your governance when onboarding new generations. There can be a certain tension, after all, as it naturally creates a mixed group, in which some people feel more empowered to make decisions and others feel less so. Family foundations that have been run solely by their founding generation, for instance, may find it difficult to transition to a more democratic process as new generations come on board.

Blending new voices brings diversity, new strengths and developing roles to your mission.

That’s why a more formal onboarding process is often preferable over, say, just family discussions, to smooth those crucial transitions. It can be hard to step into a leadership role if you feel that you don’t have clear authority to question, challenge and make decisions. So, having governance practices and decision-making structures in place brings more objectivity to a process that can be subjective—and that gives next-gen family leaders a solid base to lean back on in terms of how to engage, integrate and contribute.

3. Master Transition Planning

When managing transitions, taking the time to discover passions and identify roles that fit is a best practice to move forward successfully. Square pegs will never fit round holes, so don’t try to force them. Instead, it’s vital to match interests, responsibilities and leadership abilities to family members who have the desire, enthusiasm, education and drive for the roles that make the most sense for them to accept. The bottom line? Intrinsic motivations will maintain the foundation’s effectiveness and sustainability.

What about bringing outsiders into the multigenerational family mix? It’s a trend among most family foundations today, according to NCFP’s Trends 2020 study, but it’s also something that a lot of them grapple with. Before adding outside directors, prioritize effective family communication, a focus on values and operational direction.

It’s not always easy for an outside party to walk into a family setting, so make sure your reasons for engaging other voices bring value and new expertise to the table and that the advisory goals you set are clearly defined. Whether you’re actively bringing on the next generation, outside advisors or both, always remember to be mindful of the actions you take. You’re laying the groundwork for the next stage of your family foundation and defining what you want your message to the world to be.

To learn more about these key takeaways and other valuable insights, listen to the full webinar discussion.

The post Family Philanthropy: Thriving Through the Generations appeared first on Foundation Source.