Managing Foundations and Charitable Trusts – Essential Knowledge, Tools, and Techniques for Donors and Advisors

<p>Preface xiii</p>
<p>Acknowledgments xvii</p>
<p>CHAPTER 1 The Basics of Charitable Giving 1</p>
<p>Direct Gifts 2</p>
<p>Supporting Organizations 6</p>
<p>Donor–Advised Funds 8</p>
<p>Private Foundations 12</p>
<p>Conclusion 18</p>
<p>CHAPTER 2 Tax Incentives and Limitations 21</p>
<p>Four Powerful Tax Incentives 21</p>
<p>Details on Tax Deduction Limits 25</p>
<p>Finding the Best Giving Strategy 27</p>
<p>The $1.6 Trillion Loss 28</p>
<p>Estate Taxes 29</p>
<p>Conclusion 30</p>
<p>CHAPTER 3 Charitable Planning and Taxes 33</p>
<p>Giving Approach 34</p>
<p>Tax Planning Complexity 37</p>
<p>Guidelines for Analytical Expenditure: Or Is Analysis Worth It? 39</p>
<p>What to Do When Tax Rates Are Uncertain 40</p>
<p>Timing of Gain Realization 41</p>
<p>Charitable Remainder Trusts and Deferral 42</p>
<p>Conclusion 42</p>
<p>CHAPTER 4 Planning with Charitable Lead Trusts and Charitable Remainder Trusts 43</p>
<p>Charitable Lead Trusts 43</p>
<p>Charitable Remainder Trusts 47</p>
<p>Flexibility and Irrevocability 52</p>
<p>CHAPTER 5 Foundations and Children 53</p>
<p>Affluenza 54</p>
<p>Bringing Families Closer 56</p>
<p>Transmitting Values 56</p>
<p>Providing Valuable Skills 56</p>
<p>Conclusion 59</p>
<p>CHAPTER 6 Benefits of Giving While You re Still Alive 61</p>
<p>Personal Satisfaction 61</p>
<p>Create a Legacy 62</p>
<p>The Problem with Waiting 63</p>
<p>From the Grave: Control But Not Too Much 64</p>
<p>What about Too Little Direction? 66</p>
<p>Who Gets Control? 68</p>
<p>Conclusion 69</p>
<p>CHAPTER 7 Effective Foundations: The Business of Philanthropy 71</p>
<p>The Mission Revisited 71</p>
<p>Getting Started 74</p>
<p>Know Your Charities 75</p>
<p>Governing for Effectiveness 77</p>
<p>Approaches to Grant Making 81</p>
<p>You Get What You Negotiate 82</p>
<p>Stand on the Shoulders of Others 83</p>
<p>Outside Experts Can Make the Difference 84</p>
<p>Types of Support: Periodic versus Endowment, General versus Program 84</p>
<p>Is Measurement Worthwhile? 86</p>
<p>Establishing Measures 90</p>
<p>Provide Feedback 91</p>
<p>Give Wisdom in Addition to Wealth 91</p>
<p>Give Strategically 93</p>
<p>Exercise of Leverage 95</p>
<p>Make Foreign Donations Deductible 96</p>
<p>Use Public Relations Effectively 97</p>
<p>Create Financial Leverage through Tax–Exempt Financing 98</p>
<p>Let Your Foundation Do the Dirty Work 98</p>
<p>Conclusion 99</p>
<p>CHAPTER 8 The Road to Hell: Beware of Unintended Consequences 101</p>
<p>Food Aid 103</p>
<p>Private Charity and Unintended Consequences 105</p>
<p>Fungible Money and Inadvertent Funding of Terrorism 107</p>
<p>How to Give Restricted Grants 109</p>
<p>Poverty Again 110</p>
<p>CHAPTER 9 Developing an Appropriate Foundation Investment Policy 113</p>
<p>What to Include in an Investment Policy 113</p>
<p>Conclusion 121</p>
<p>CHAPTER 10 Developing and Implementing a Foundation Asset Allocation Policy 123</p>
<p>Differences between Corporation and Foundation Investment Plans 123</p>
<p>The Seven Deadly Sins of Foundation Asset Allocation Policy 125</p>
<p>Developing a Good Asset Allocation Policy 129</p>
<p>Should an Asset Allocation Policy Change over Time? 135</p>
<p>Capturing the Rebalancing Bonus 136</p>
<p>Active Management versus Indexing 137</p>
<p>Who Is Responsible for the Asset Allocation Policy? 138</p>
<p>Conclusion 139</p>
<p>CHAPTER 11 Main Themes in Legal Compliance 141</p>
<p>Some Compliance Errors May Seem Funny, but They re Not 142</p>
<p>A Fail–Safe System 143</p>
<p>Required Activities 144</p>
<p>Prohibited Activities 147</p>
<p>Conclusion 151</p>
<p>CHAPTER 12 Fraud, Inflation, and Market Risk 153</p>
<p>Stanford Case 157</p>
<p>Enron 160</p>
<p>Baptist Foundation of Arizona Case 162</p>
<p>The Bre–X Fraud 163</p>
<p>Allied Capital 166</p>
<p>Fraudulent or Not? You Decide 167</p>
<p>What Is XYZ? 169</p>
<p>How Will Social Security End? 170</p>
<p>Promised Benefits 170</p>
<p>Real Terms 171</p>
<p>Inflation: A Brief History 174</p>
<p>Inflation Indexing 176</p>
<p>Foundations and Endowments Are Highly Exposed to Inflation 180</p>
<p>Avoiding Fraud 180</p>
<p>CHAPTER 13 Other Planned Giving Vehicles 183</p>
<p>Charitable Gift Annuity 183</p>
<p>Gift Annuities versus Regular Annuities 184</p>
<p>Partial Exclusion of Annuity Payments from Income Tax 185</p>
<p>Bargain Sale 186</p>
<p>Charitable Gift Annuity versus CRT 189</p>
<p>Remainder Gifts with Retained Life Estate 190</p>
<p>Pooled Income Funds 192</p>
<p>CHAPTER 14 Donor–Advised Funds 195</p>
<p>History 196</p>
<p>Guidelines Highlights 196</p>
<p>Fees and Costs 199</p>
<p>CHAPTER 15 Building Assets with Charitable Planning 201</p>
<p>Professionally Managed, Turnkey Private Foundations 205</p>
<p>Foundation Manager s Role 206</p>
<p>Conclusion 207</p>
<p>CHAPTER 16 How to Select a Foundation Manager 209</p>
<p>Choosing a Full–Service Manager 209</p>
<p>Conclusion 212</p>
<p>CHAPTER 17 What Can You Donate to Charity? 213</p>
<p>Publicly Traded Securities 213</p>
<p>Nonpublicly Traded Business Interests 215</p>
<p>Tangible Personal Property 216</p>
<p>Intangible Personal Property 218</p>
<p>Qualified Retirement Plans 221</p>
<p>Real Estate 223</p>
<p>Conclusion 225</p>
<p>CHAPTER 18 When the Shoe No Longer Fits 227</p>
<p>Private Foundations 227</p>
<p>Charitable Remainder Trusts 231</p>
<p>Getting Rid of Other Charitable Vehicles 243</p>
<p>Conclusion 245</p>
<p>Selected Resources 247</p>
<p>About the Authors 249</p>
<p>Index 251</p>