Reasons for Giving to a Community Foundation Instead of Directly to a Charity
The Value of "Endowment" vs. "Lump Sum"
- Donor prefers to make large gifts to charities as permanent or endowed gifts, so the principal remains intact and only the income is distributed to the charity.
- Chance to endow their giving without the cost of a private foundation.
- The community foundation as an endowment vehicle opens up gifts for the benefit of specific charities- gifts that wouldn't have been made directly.
The Benefits of an "Independent Screen"
- Provides donors with an "independent screen." There is, in effect, a layer of insulation between the operating entity and it also encourages gifts that wouldn't have been made in its absence.
The Protection From a "Disappearing Charity"
- Donors can be confident that gifts to a charity, intended to be permanent endowments, won't simply disappear should the charity discontinue.
- Agreements allow donor to set up a designated fund for annual payments, & gives donors the right to specify an additional charity should the first cease to exist.
The Opportunity to Split "Stocks"
- Affords a donor the chance to "split up" a stock and distribute the proceeds to however many charities he or she wishes.
- Acts as a "pass-through" charity & opens up gifts that otherwise wouldn't be made.
The Advantage of an "Immediate Deduction"
- Allows the donor make a gift now, and obtain the desired tax deduction now, but defer the identity/sharing ratio decisions until later.
- Offers donors a "temporary parking place" to stimulate gifts that otherwise wouldn't be made.
The Choice of Deciding the "Investment-Manager"
- Allows gift donors the opportunity to request that his or her fund be managed and invested by a trust company, brokerage firm, or other entity of the donor's choice, allowing the donor to remain loyal to his or her investment advisor.
The Attraction of "Gifts From Others"
- Allows a charity to effectively "gets its name out" and attract donations that would not otherwise occur.
The Security of "Asset Protection"
- Keeps donors money out of reach of the charity's creditors, even though the money is held for the exclusive benefit of that charity.
- Offers a creditor-proof alternative that gives donors confidence when making gifts.