Advisors: Your frequently asked questions answered
Clients can set up a fund at the Community Foundation for whatever purpose they want and know that their wishes are going to be carried out. I don't worry about referring clients to the Community Foundation; I know they're in good hands.”
– Nancy Little, retired shareholder, Buhl, Little, Lynwood & Harris
You have the skills and knowledge to best serve your clients' financial and legal interests. We have the local knowledge and expertise to best serve your clients' philanthropic interests with tax benefits.
It's a perfect partnership.
We're here to support the work you do to create your clients' philanthropic plan. Take a look at some of the questions we regularly hear from your peers:
Donor-advised funds (DAFs) at the Community Foundation are superior to those offered at commercial institutions, in part due to these top benefits:
- Personalized donor support
- Extensive knowledge of community needs and local nonprofits
- Administration fees support the local community
- No minimum retained balance required
In contrast, commercial donor-advised funds are transaction-based. The commercial institution cannot provide guidance or insight into the community, its needs, or nonprofit leaders. Nor do the fees charged against these commercial funds support philanthropy in the region. Our fees support their community.
Additionally, the Community Foundation can accept the full range of gift opportunities, while gifts to create funds at commercial institutions tend to be limited to cash and publicly-traded securities. Our DAF's can also accept gifts from client's friends and family.
To see all the differences easily, look at our full DAF comparison chart.
A fund at the Community Foundation is less costly and less time-intensive to establish than a private foundation. Our staff can help your clients establish a fund in weeks or less, and then we handle all the administrative details and reporting. Establishing a private foundation can take many months, and the private foundation then becomes responsible for substantial legal, accounting, and operational matters.
A private foundation is usually endowed by a single family or corporation and managed by that family or corporation. Because a community foundation is publicly supported and controlled, it is accorded certain advantages over private foundations by the IRS, including the following:
-
Higher deduction limits for donors.
-
No excise tax imposed.
-
No minimum payout requirement.
-
No separate tax reporting on individual funds.
The Community Foundation is the right choice for clients who:
-
Care deeply about their local community
-
Give to more than one charitable cause
-
Are interested in creating a personal or family legacy in their community
-
Are considering the creation of a private foundation, but are concerned about the cost and administrative complexity
-
May like to stay personally involved in the use of their gift dollars
-
Want to receive maximum tax benefit for their charitable contributions under federal law
-
Want sound financial management of their contributions
If any of these criteria fit your clients, they may benefit from your referral.
We work closely with professional advisors in mid-Michigan to offer services including assistance with charitable options, fund types, customized calculations, personalized presentations, and attendance at client meetings.
We're trained to assist individuals and families in thinking through their charitable goals and giving options to help you better serve your clients. We encourage a continuous interface between clients and their legal, accounting, and/or financial counsel. We become part of your team, helping your clients with current and future philanthropic endeavors.
No. We meet to make sure we're the best fit/resource for your clients charitable giving/planning. If we're not, we will provide guidance on who would be a better fit.
We can accept the full range of assets including cash, publicly-traded or closely-held securities, retirement assets (QCDs and RMDs), as well as real estate. A fund at the Community Foundation can also be the beneficiary of bequests, charitable remainder and charitable lead trusts, and insurance policies.
Your client’s tax situation should be viewed on an individual basis to determine the deductibility allowed for them. A fund at the Community Foundation is usually a better alternative than a private foundation. Some of the tax advantages of working with the Community Foundation include:
- Gifts to funds at the Community Foundation receive more favorable tax treatment than gifts to private foundations.
- Federal tax deductions: The Community Foundation is a 501(c)(3) public charity. As such, gifts to the Community Foundation qualify for the best income, gift, estate, and generation-skipping transfer tax treatment allowed for charitable transfers.
- Clients avoid capital gains taxes on gifts of long-term appreciated assets such as stock (both public and privately owned companies) and real estate. Their deduction will be valued at full fair market value, but they won't have to recognize the built-in gains as income.
- Funds established at the Community Foundation are not subject to private foundation income taxes, excise taxes, or 5% mandatory distribution rules.
That’s where the real enjoyment and excitement begins for your client. A member of the Community Foundation’s staff will work with your client to fine-tune their charitable goals and make their philanthropy as meaningful as possible. We can do nonprofit research, set up site visits, and introduce your clients to other like-minded fundholders.
Your clients establish their fund by completing a fund agreement and providing an initial minimum contribution. Your client may make additional gifts to their fund in any amount and at any time.
When fundholders wish to make a grant from their fund, they may do so online through our fundholder portal or via email.
We create and send regular statements reflecting activity of the client's fund. Client's can also view their fund statements online through the fundholder portal.
Yes, we offer personalized services to help your clients create a plan that will outline their wishes for giving beyond their lifetime. There is no fee for inactive testamentary funds.
