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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. #1. Grantmaker • Monitor all community needs… arts & culture, economic development, health, environment, education and more! • Direct grants and resources to appropriate areas • Re-direct funds as community needs change • Knowledge of community issues, opportunities, and resources • Gather information and track local agencies and programs Making a difference where it is needed most in the local community

  5. #2. Giving Vehicle • Educate donors about charitable giving vehicles • Customize giving approaches to match personal interests and tax planning needs as a partner with professional advisors • Share knowledge on community needs • Offer involvement in recommending uses of a gift • Provide the option to give anonymously • Help people create personal legacies via named funds

  6. #2. Giving Vehicle cont…. • Unrestricted Fund • Field of Interest Fund • Designated Fund • Donor Advised Fund • Agency Endowment

  7. IT MAKES GOOD SENSE Why do organizations partner with a Community Foundation? Focus on mission Grow endowments Insure sustainability Take advantage of Endow Iowa Tax Credit

  8. 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

  9. #3. Community Leader/ Convener • Act as a community catalyst • Support high impact opportunities • Governed by leaders with strongties to the community • Foster development of new organizationsand programs • Build endowments to ensure grants are available to support the community Our business is building the local community

  10. IT MAKES GOOD SENSE Iowa Communities Growing Endowments in

  11. IT MAKES GOOD SENSE The Endow Iowa Tax Credit

  12. 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

  13. 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

  14. 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 $1,000 Tax Credit: $2,500 $ 250 Federal Deduction: $3,500 $ 250 Total Tax Savings: $6,000 $ 500 Total Cost of Gift: $4,000 $ 500 *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

  15. Endow Iowa… Proven Results! • In 2010, approx $3.4 million leveraged $13.9 million in giving. (processed by 3.15.11) • 125 contributions were from businesses. • Awarded to donors to approximately 71 different community foundations/affiliates. • Since inception, more than $75 million leveraged through 7,834 separate donations… and its growing! 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

  16. What can we expect as an Endowment partner? Work with you to grow the organization’s endowment Strategize the work Organize a committee Develop a brochure or case statement Inventory current collateral Identify & prioritize potential donors Visit potential donors along with organization's board or committee members

  17. IT MAKES GOOD SENSE Questions & Comments

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