ALASKA COMMUNITY FOUNDATION

1. ALASKACOMMUNITYFOUNDATION SM Connecting People Who Care…With Causes That Matter

2. Affluent households Net worth of $500K+, not including primary residence 19.4million 11.2million 1995 2000 2005 Sources: Spectrem Group; Cerulli Associates; TowerGroup; Packaged Facts; Celent Communications; HNW, Inc. Growth in personal wealth

3. 74% first generation high net worth 276 billionaires 350 thousand deca-millionaires Growth in personal wealth

4. Growth in personal wealth Transfer of wealth: $41 trillion to $136 trillion

5. w a t h is a community foundation? is a community foundation?

6. We are a tax-exempt public charity created by and forthe people of Alaska.

7. A community foundationhas three special features.

8. o n e personalized service

9. feature one Personalized service ›Educate people on charitable giving vehicles ›Customize giving approaches to match personal interests and tax planning needs ›Facilitate complex forms of giving ›Share knowledge on community needs ›Offer grantmaking expertise and administrative services ›Help people create personal legacies via named funds ›Offer involvement in recommending uses of a gift ›Provide the option to give anonymously Creating solutions that fit every situation

10. t w o local expertise

11. ›Local organization with local staff andboard members › Knowledge of community issues, opportunities,and resources ›Monitor all community needs… Arts and culture Economic development Education Environment Health Human services Recreation Neighborhoods ›Gather information and track local agencies and programs › Direct grants and resources to appropriate areas feature two Local expertise Making a difference where it is needed most

12. t h r e e community leadership

13. feature three Community leadership › Act as a community catalyst › Build endowments to ensure grants are always available to support the community › Support high impact opportunities › Are governed by leaders with strongties to our community › Foster development of new organizationsand programs ›Re-direct funds as community needs change Our business is building community

14. A bit of background.

15. 1914 First U.S. community foundation established in Cleveland, Ohio 1986 Alaska Community Foundation incorporated today Nearly 700 community foundations in the United States foundation facts A brief history › Serving citizens across the nation › More than $30 billion in assets › More than $2 billion in local grants each year › And growing!

16. foundation facts Our vital statistics Alaska Community Foundation › More than 140funds › $30,000,000 in endowed assets › More than $3,000,000 in annual grants

17. Tools for giving.

18. named funds A personal legacy of giving Donors can establish a fund in their name, in a family’s name, or in the name of any person or organization they wish to honor. Grants distributed from a donor’s fund are awarded in the name of their fund. This person or organization will always be remembered and linked to good works in our community.

19. tools Charitable funds for giving › Unrestricted FundMeeting ever-changing community needs › Field of Interest FundAddressing needs in a specific area or cause › Designated FundDirecting gifts to specific agency or agencies › Donor Advised FundInvolving donors in the use of their gift › Agency Fund Build a sustainable source of funds for a NPO › Special Project FundsFiscal oversight for short term community projects You can create a named fundin any of these categories.

20. tools Charitable instruments for giving › Outright GiftsGive cash, stocks, real estate or other assets › Bequest by WillDesignate a portion of an estate › Charitable Lead TrustTrust pays the community foundation a fixed amount for a number of years and then assets go to beneficiary › Charitable Remainder TrustTrust pays beneficiary for life and then assets transfer to community foundation › Life Estate ContractDonor transfers home to community foundation and still enjoys use while living We accept a wide variety of assets.

21. The advantages of planned giving People giving back

22. people The advantages of planned giving giving back Charitable Lead Trust: › Transferred $1,000,000 inappreciated assets › $75,000 paid annually to community foundation for 15 years; establishing afund in their name › After 15 years, remaining assets transfer to children › The family meets regularly to recommend charitable distributions

23. Amount to charity — Donor Advised Fund 0 $1,125,000 Total family and charitable benefit $1,318,107 $2,430,414 people The advantages of planned giving giving back Conventional Community Investment/ FoundationEstate Plan Lead Trust A quick comparison Initial value of stocks and bonds $1,000,000 $1,000,000 Current taxable gift to heirs NA $300,000 Gross amount to heirs at end of 15 years $2,396,558 $1,440,414 Less: Federal estate tax (@ 45%) ($1,078,451) ($0) Less: Gift tax adjustment ($0) ($135,000) Net amount to heirs $1,318,107 $1,305,414 (sample calculation — for illustration only)

24. Professional advisor’s role in helping clients realizetheir charitable goals.

25. listening Talking with your clients about charitable giving for opportunities As clients look for more meaning in their lives, planning must become more inclusive. Three levels of exploration: › Financial security for self and spouse › Appropriate inheritance for family › Legacy for society

26. listening Talking with your clients about charitable giving for opportunities Clients expect professional advisorsto suggest charitable opportunities...or might assume it is not an option. In fact, you may be able to help them: › Increase their current income › Increase their heirs’ inheritance › Leave a legacy in the community › Teach their children about philanthropy

27. people Teaching charitable giving giving back Philanthropic goals: › Opportunity to make charitable decisionsas a family › Hands-on experience for children—each can express giving preferences › Teach financial and community responsibility › Passing along family “giving values”to next generation

28. greatest opportunities Some of the to make charitable gifts arise when makingmajor business, personal and financial decisions.

29. Scenario Just earned a large bonus, but no time to decide on the most deserving charities. Opportunity Establish a Donor Advised Fund for an immediate tax deduction, and stay involved in gift for years to come. listening Year-end tax planning Helping your clients realizetheir charitable goals for opportunities

30. Scenario Thinking about establishing a private foundation, but looking for alternatives. Opportunity › Establish a Donor Advised Fund and stay personally involved with the distribution ofgift dollars. › Use community foundation for simple administration and grantmaking expertise. listening Private foundations Helping your clients realizetheir charitable goals for opportunities

31. Donor Advised Fund Private Foundation listening Comparing the differences for opportunities › Cash gifts, deduct 50% AGI › 30% AGI › 20% AGI on long-term appreciated securities ›Deduct 30% AGI on long-term appreciated securities › Easy to establish › Several months to establish › Minimal administrative fees › Typically higher administrative fees › No minimum payout › 5% minimum payout › Grantmaking advice › On their own › 1–2% excise tax › Self dealing disclosure requirements

32. Scenario Passionate about meeting a specific community need and wants to make a meaningful gift. Opportunity Community foundation uses grantmaking expertise to recommend ways to make the greatest impact. listening Strategic giving Helping your clients realizetheir charitable goals for opportunities

33. Scenario Owns highly appreciated stock in a companythat is about to be acquired. Opportunity › Structure a charitable gift of stock before the company is sold to reduce capital gains and increase charitable deductions. › Establish Donor Advised Fund so once-in-a-lifetime event can help client do good forever. listening Sale of a business Helping your clients realizetheir charitable goals for opportunities

34. Scenario Personal net worth is tied up in a closely heldcompany, but wants to give back. Opportunity › Donate a portion of company stock to the community foundation; company may buy it back for fair market value. › Establish Donor Advised Fund or planned gift; donor is eligible for a tax deduction at the fair market value of appreciated stock (lessany planned gift value). listening Closely held stock Helping your clients realizetheir charitable goals for opportunities

35. Scenario Estate planning identifies significant taxesgoing to the IRS, but wants to keep dollars local. Opportunity › Reduce taxable estate through charitable bequest or other planned gift. › Create personal legacy in community that stays true to client’s charitable intent forever. listening High estate taxes Helping your clients realizetheir charitable goals for opportunities

36. Scenario Concerned about running out of moneyduring lifetime, but has always been charitable. Opportunity › Establish a charitable remainder trust that pays an annuity for life. › Upon death, the fund begins distributing grants with client’s charitable interests in mind. listening Frugal living in retirement Helping your clients realizetheir charitable goals for opportunities

37. Scenario Wants to leave estate to family and community and has substantial assets in retirement accounts. Opportunity Help client evaluate the most beneficial asset distribution to minimize taxes, giving more to heirs and preserving charitable intent. listening IRA and 401(k) Helping your clients realizetheir charitable goals for opportunities

38. Scenario Have appreciated stock, but many charities are too small to accept direct stock gifts. Opportunity Give appreciated stock to a community foundation and receive a tax deduction on its full market value, while avoiding the capital gains tax that would otherwise arise from sale of the stock. listening Sale or disposition of highly appreciated assets Helping your clients realizetheir charitable goals for opportunities

39. t e n reasons people choose to givethrough community foundations

40. 1 We are a local organization with deep roots in the community 2 Our professional program staff has broad expertise regarding community issues and needs 3 We provide highly personalized service tailored to each individual’s charitable and financial interests 4 Our Donor Advised Funds help people invest in the causes they care about most 5 We accept a wide variety of assets, and can facilitate even the most complex forms of giving ten People choose to givethrough community foundations reasons

41. We multiply the impact of gift dollars by pooling them with other gifts and grants 8 7 We offer maximum tax advantage under state and federal law 9 We build endowment funds that benefit the community forever and help create personal legacies 10 We are a community leader, convening agencies and coordinating resources to create positive change We partner with professional advisors to create highly effective approaches to charitable giving 6 ten People choose to givethrough community foundations reasons

42. under which she will never sit, then you knowthat civilization has come to that land. plants a tree When a person Greek philosopher