The
Philanthropist Next Door
Written
By: William
"Bill" Fox,
Vice
President of Philanthropic Services
First
Community Foundation of Pennsylvania
Originally
Published January 19, 2006
You
may associate the concept of philanthropy with names like Carnegie,
Mellon and Heinz, but did you know that you could be the
philanthropist next door?
You
can make an impact in your own community, while maximizing tax and
estate planning benefits, and you do not need to be a wealthy
industrialist or a billionaire to do it.
You can establish your own community legacy simply by using
your community foundation for your charitable giving.
One
of the fastest growing sectors of philanthropy, community foundations
use gifts of all sizes for the betterment of residents of a
specific geographic area. Community
foundations share common traits: they
use donated assets to create permanent, endowed funds that generate
grants to qualified charitable organizations and scholarships to
promising young people.
Establishing
a fund at a community foundation differs from making a gift to a nonprofit
organization for a specific program. Instead
of spending donors' dollars immediately, the foundation creates endowed
funds with the money. Income
from the funds is used for grants and scholarships, and the principal
continues to grow. Over time,
the donation will provide many times over the amount of the original gift
to the community.
Because
community foundations are nonprofit, charitable organizations, gifts made
to them are tax-deductible to the fullest extent allowed by the IRS.
The foundations can accept many different types of gifts, making
them a flexible giving option for donors.
Community foundations may also offer professional gift planning
expertise for individuals and can work closely with their professional
advisors as they structure their gifts.
Gifts that may be accepted by
community foundations include:
ˇ
Cash
Gifts and Memorials
ˇ
Gifts
of Appreciated Assets
ˇ
Bequests
Via Wills or Living Trusts
ˇ
Gifts
of Homes, Farms and Vacation
Property
ˇ
Gifts
of IRA's and Retirement Accounts
ˇ
Gifts
of Life Insurance
ˇ
Charitable
Gift Annuities
ˇ
Charitable
Remainder Trusts
ˇ
Charitable
Lead Trusts
Donors
also have many options to decide how the community will benefit from their
donation. Funds that may be
established at a community foundation include:
Unrestricted
Funds
For
donors who prefer to use the community foundation's knowledge of
community needs, unrestricted funds award grants to charitable
organizations through the foundation's competitive grant process.
Unrestricted funds benefit a variety of causes, based on community
needs.
Field
of Interest Funds
Grants
are made to benefit causes within a broad field of interest (i.e. the
arts, youth, animals, or the environment).
Designated
Funds
Grants
are made to a charitable agency, or agencies, designated by the donor at
the time of the donation. Designated
funds allow donors to provide perpetual income for their favorite
charities.
Donor
Advised Funds
The
donor or the donor's fund representative(s) make recommendations on
grants. Donor advised funds
are ideal for individuals who want to stay connected with their gift, or
who want to involve their family in making recommendations on grants.
Scholarship
Funds
Income
from these funds provides scholarships.
The donor may specify criteria for the scholarship at the time of
the gift.
So
how can a community foundation help you become the philanthropist next
door?
By
offering many options to donors, community foundations make giving to your
favorite causes easy and highly personalized.
The
First Community Foundation of Pennsylvania serves donors in Central and
Northcentral Pennsylvania. Bill Fox can be reached at the First
Community Foundation of Pennsylvania at (570) 321-1500 or toll free (866)
901-2372.
For
more information on the Foundation, visit the website at www.fcfpa.org.
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