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The Power of Philanthropy

Community Foundation of Washington County. The Power of Philanthropy. IT MAKES GOOD SENSE. What is a Community Foundation?. Community Foundations Are…. 1. Grantmakers. They support a wide range of community needs- education, health, human services and more.

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The Power of Philanthropy

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  1. Community Foundation of Washington County The Power of Philanthropy

  2. IT MAKES GOOD SENSE What is a Community Foundation?

  3. Community Foundations Are… • 1. Grantmakers. They support a wide range of community needs- education, health, human services and more. • 2. Local Giving Vehicles. They establish and hold numerous funds for a variety of charitable purposes. • 3. Community Leaders and Conveners. They act as community catalysts focusing on long-term endowment building and sustainability.

  4. IT MAKES GOOD SENSE Iowa Communities Growing Endowments in

  5. Surprising wealth transfer in 50 years $41 trillion in United States $531billion in Iowa through probate estates alone $6.1 billion in Washington County $ 274,425 per probated estate in Iowa… $314,186 per probated estate in Washington County.

  6. YEAR 10 YEAR 50 $45.2 million charitable gifts $10.9 milliontotal grants $53.3 million community endowment $304 million charitable gifts $646,.6 milliontotal grants $783 million community endowment If 5% of estates transfer to endowment funds… A Washington County Example Many gifts, many generations What could be accomplished in your community…

  7. Definition: Endowment Permanent, persistent resource Ps a revenue source that allows for enhancement or expansion of programs during successful years, and that provides some security in more challenging financial times. Provides a revenue source that allows for enhancement or expansion of programs during successful years, and that provides some security in more challenging financial times.

  8. YEAR 25 YEAR 1 YEAR 15 YEAR 50 Establish a Named Fund $95,000 in cumulative grants and services $164,000 balance $193,000 in cumulative grants and services $234,000 balance $662,000 in cumulative grants and services $570,000 balance $100,000 gift Initial gift has been invested: 1 TIME 2 TIMES 6+ TIMES One gift, many generations LOOKING AHEAD assumes 4.5% annual payout and 8.5% rate of return

  9. IT MAKES GOOD SENSE The Endow Iowa Tax Credit

  10. WHAT IS Endow Iowa? • Encourages Iowa Taxpayers to Contribute to • Endowment Funds at Qualified Community • Foundations • Permanent Endowment Fund • Has to be held at and receipted by the • Community Foundation • Iowa Charitable Purpose • (scholarships, agency endowments, donor • advised funds, etc.) • No more than 5% spending/granting policy

  11. WHAT IS Endow Iowa? • THEN donors can be eligible for... • 25% state tax credit for contribution- in addition to normal federal charitable deduction • Limits each year • per taxpayer (up to $227,590) • statewide (approx $4.5 million in 2011) • Tax credit paperwork has to be completed • Awarded on a first come-first served basis • Tax Credit Letter/# sent by IDED once awarded • Can be carried forward up to 5 years

  12. Endow Iowa Tax Credit Example Surprising wealth transfer in next 50 years With Endow Iowa, donations to community foundation endowments cost donorsless. For example, a $10,000 gift could cost just $4,000. Gift: $10,000 Tax Credit: $2,500 Federal Deduction: $3,500 Total Tax Savings: $6,000 Total Cost of Gift: $4,000 *Based on 35% marginal federal tax rate $41 trillion in United States $531billion in in Iowa through probate estates alone $XXX billion in [County] Calculate for yourself and see the charitable impact at http://www.iowacommunityfoundations.org/resources.aspx $XXX,XXX per probated estate

  13. YEAR 25 YEAR 1 YEAR 15 YEAR 50 Establish a Named Fund $9,000 in cumulative grants and services $16,000 balance $19,000 in cumulative grants and services $23,000 balance $66,000 in cumulative grants and services $57,000 balance $10,000 gift Initial gift has been invested: 1 TIME 2 TIMES 6+ TIMES nonprofits The Impact to assumes 4.5% annual payout and 8.5% rate of return

  14. Surprising wealth transfer in next 50 years $41 trillion in United States $531billion in in Iowa through probate estates alone $XXX billion in [County] $XXX,XXX per probated estate

  15. What has this all done for Iowa? • In 2005…. • Approximately 13 community foundations operating within National Standards for US Community Foundations • Estimated $206 million in total assets • In 2011…. • Approximately 130 community foundations/affiliates operating within National Standards for US Community Foundations • Estimated $523 million in total assets… growth of $317 million since 2005!

  16. IT MAKES GOOD SENSE Questions & Comments Thank you

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