as a woman you may be a... MOTHER
WIFE
GRANDMOTHER
DAUGHTER
SINGLE WORKING WOMAN A PLAN of one’s own BUSINESS OWNER
A WOMAN’S GUIDE TO PHILANTHROPY MID-CAREER PROFESSIONAL
CORPORATE EXECUTIVE
GRADUATE STUDENT
RETIRED VOLUNTEER as women we are all philanthropists …
women, who care about
people, THE community,
AND THE future;
women who give money and time to make the world a better place. A healthy society includes the active participation of women through philanthropy, the voluntary shar- ing of one’s personal and financial resources. Women ‘‘have traditionally been heralded for their generations of life-changing service to society. But today, women are not limited to contributions of service, as they are achieving full confidence in their capabilities as financial donors. ’’WOMEN’S PHILANTHROPY INSTITUTE
THE PAST CENTURY HAS HAD A PROFOUND IMPACT WOMEN CAN NOW SHAPE THE 21ST CENTURY BY
ON WOMEN’S LIVES, RESULTING IN MANY WOMEN BUILDING ON THEIR COLLECTIVE TRADITION OF SERV-
COMING INTO LEADERSHIP POSITIONS. COMMUNITY ICE TO GIVE FINANCIAL AND INTELLECTUAL CAPITAL.
LEADERS, NONPROFIT DIRECTORS, BUSINESS OWN- AS WOMEN BECOME EFFECTIVE PHILANTHROPISTS IN
ERS, PROFESSIONALS, AND MOTHERS WHO HAVE THEIR OWN RIGHT, THEY NEED GOOD INFOR-MATION
PREPARED THEIR CHILDREN TO CONTRIBUTE TO TO INFORM THEIR STRATEGIC CHOICES IN THEIR
SOCIETY, HAVE HELPED SHAPE THE 20TH CENTURY JOURNEY OF GIVING.
FROM THE INSIDE OUT. why philanthropy?
PHILANTHROPY gives our wealth meaning BY BEING a philanthropist, we assist with and engages us as stewards in the community growth. betterment of society. BY GIVING to charitable and philanthropic PHILANTHROPY is our individual organizations, we exercise our support response to human needs; an for the goals, the people, and the purposes in opportunity to give is an opportunity to which we believe. be involved. PHILANTHROPY allows us to shape the PHILANTHROPY is nurturing, caring, future in which we want to live. and serving.
A PLAN OF ONE’S OWN: A WOMAN’S GUIDE TO PHILANTHROPY IS
DESIGNED TO ASSIST AND INSPIRE YOU TO EXPLORE AND CRAFT
YOUR OWN PATH TO EFFECTIVE PHILANTHROPY. FIND OUT HOW
BEST TO GET INFORMATION ABOUT THE ISSUES YOU CARE ABOUT
AND LEARN OF TOOLS TO HELP GUIDE YOU TO THE GIVING OPTION
THAT IS BEST FOR YOU. contents
4 | WHY A SPECIAL GUIDE FOR WOMEN?
5 | WHAT MOTIVATES WOMEN TO GIVE?
6 | WOMEN ARE BREAKING BARRIERS
7 | YOUR JOURNEY: PUTTING IT ALL TOGETHER
8 | CREATING YOUR OWN CHARITABLE GIVING PLAN
33 | WORKING WITH ADVISORS
34 | RESOURCES FOR YOU
35 | GLOSSARY OF TERMS
40 | BIBLIOGRAPHY & ACKNOWLEDGMENTS “THERE IS NOTHING MORE INSPIRING THAN TO WATCH A WOMAN WHO IS COMMITTED AND INVOLVED IN SOMETHING SHE CARES PASSIONATELY ABOUT.” Abbie von Schlegell, Women as Donors, Women as Philanthropists
Why a Special Guide for Women?
FOR CENTURIES, OUTSTANDING WOMEN HAVE Great wealth and unprecedented power represent FOCUSED THEIR EFFORTS AND THEIR FORTUNES ON ripe conditions for the growth of independent, CREATING NEW INSTITUTIONS AND BRINGING ABOUT strategic philanthropy as women fully discover SIGNIFICANT SOCIAL CHANGE. their capacity to impact the causes that impassion them. The role of “volunteer” and “giver” is a traditional It is not an overstatement to say that women, as one for women, yet few people have thought of managers of their individual, family, and shared women as philanthropists. Until recent years, wealth, have the potential to make a profound and philanthropy has remained uncharted territory for lasting impact on society by actively engaging in many women. philanthropy. In the 21st century, it will be women who make This is changing. the difference; women who lead the way as As leaders in every other area of society, women philanthropists, principals of society, and leaders are beginning to understand their full potential as in business, politics, the arts, sports, medicine, philanthropists, as shapers of future society. education, law, and in the nonprofit sector. By Women have come to philanthropy through their building on the tradition of service, leveraging volunteer involvement with the nonprofit causes current expertise, and strategic financial giving, they believe in; now women are building on that women are shaping the future of society. expertise as they forge a path for others. Combining volunteerism with financial resources, Why now? philanthropy is the next frontier of the women’s As we begin the 21st century, women in the United movement. States are in a position of unprecedented wealth Research has found that women have unique and economic power. Today, women control more giving patterns as a result of their socialization. A PLAN A OFOWN ONE'S PLAN wealth—whether individual, family, shared, or Women do not give the same way men do. inherited wealth—than ever before. As their Grounded in a tradition of volunteerism and wealth increases, women are becoming more sharing, women bring a new voice to philanthropic knowledgeable about their own financial resources giving, one that is based on partnership and and responsibilities.1 engagement and is transforming the way Women make up 53% of the workforce and are philanthropy and fundraising work. increasingly moving into higher-paying professional careers. Women make up 1.6 million Many women are looking for information on of the top wealth holders in the U.S., with a how to sharpen their philanthropic skills and
A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S combined net worth of almost $2.2 trillion. focus their giving for the greatest impact. A Women generated $2.1 trillion in earnings in 1999. Plan of One’s Own is designed to help women Perhaps most striking of all, because women take control and increase the impact of their live longer than men, they will end up in charge of giving. much of the $41 to $136 trillion expected transfer from generation to generation over the next fifty years.2
1 “She Said: A Study of Affluent Women and Personal Finances,” Deloitte & Touche, 1998.
2 “Report Reveals Significantly Higher Forecasts for Upcoming U.S. Wealth Transfer: Boston College Researchers Project Range of $41Ð$136 Trillion in First New Wealth-Transfer Estimates Since 1990,” press release, Boston College Social Welfare Research Institute, October 20, 1999.
4 “IN THE OVER TEN YEARS I HAVE BEEN ASSOCIATED WITH WOMEN AND PHILANTHROPY, I HAVE SEEN SUCH WONDERFUL CHANGES. CHANGES IN THE WAY WOMEN ARE REGARDED AS DONORS AND CHANGES IN WOMEN THEMSELVES. WOMEN HAVE TAKEN CONTROL OF SO MUCH IN THEIR LIVES DURING THIS PAST DECADE AND ONE OF THE BIGGEST AREAS IS THEIR PHILANTHROPY.” Sondra Shaw-Hardy, Creating A Women’s Giving Circle
What Motivates Women To Give?
WOMEN GIVE FOR MANY REASONS: Connect ¥ Women prefer to see the human face their gift “Giving gives me a feeling of value and satisfaction… affects. helps me to perpetuate a certain viewpoint or ¥ Women want to build a partnership with people philosophy… allows me to memorialize a friend or connected with the projects they fund. loved one… as a family, give around a purposeful mission. Collaborate ¥ Women prefer to work with others as part of a “It’s a chance for me to give back to my community… larger effort. leave a legacy… or satisfy a desire for leadership… ¥ Women seek to avoid duplication, competition, and to network with like-minded individuals… and waste. capitalize on tax advantages… Commit “…and most of all, it’s an opportunity to create my ¥ Women often volunteer for causes which they own journey and make a mark that’s important to me.” care about. Women often give to the organizations for In their book Reinventing Fundraising: ¥ which they have volunteered. Realizing the Potential of Women’s Philanthropy (1995), Sondra C. Shaw-Hardy and Martha A. Celebrate Taylor, co-founders of the Women’s Philanthropy Women seek to celebrate their accomplishments Institute, identified six recurring themes in their ¥ and have fun with philanthropy. discussions with women philanthropists, which they called “the 6 C’s”: OWN AOF ONE'S PLAN Women who give say they receive the following benefits: Create Altruism, accompanied by a sense of self- ¥ Women want to create new solutions to old ¥ problems. empowerment. ¥ Women seek to create new organizations or new ¥ Being part of a larger community. programs within existing organizations. ¥ Finding like-minded people—meeting others who share interests and values. Change ¥ Participating in the process and watching a
¥ Women give to bring about social change. project unfold. PHILANTHROPY TO GUIDE A WOMAN'S ¥ Women are less interested in providing By giving financial, intellectual, and social unrestricted support to preserve the status quo of capital to charitable and philanthropic an organization or institution. organizations, women can support what they believe.3
3 Sondra C. Shaw-Hardy and Martha A. Taylor, Reinventing Fundraising: Realizing the Potential of Women’s Philanthropy, Jossey-Bass Publishers, 1995.
5 “WOMEN ARE EMERGING AS LEADERS IN EVERY SECTOR, INCLUDING BUSINESS, GOVERNMENT, SCIENCE, SPORTS, AND THE ARTS. THE NEXT FRONTIER IS PHILANTHROPY. IN EACH CASE, THEY ARE BRINING A FRESH PERSPECTIVE AND A NEW APPROACH. WOMEN ARE ENRICHING THEMSELVES AND THE WORLD THROUGH PHILANTHROPY.” Andrea Kaminski, Women’s Philanthropy Institute
Women are Breaking Barriers
THERE ARE A NUMBER OF BARRIERS TO GIVING THAT ¥ Women in the generation born between 1931 WOMEN ARE OVERCOMING; BARRIERS THAT HAVE and 1945 may hold views similar to those of the TRADITIONALLY MADE IT CHALLENGING FOR MANY mature generation, but also may have attended WOMEN TO REALIZE THEIR FULL PHILANTHROPIC college and entered the workforce as pioneers in POTENTIAL. a male-dominated world. This generation tends “to be wary of issues related to money and More women are: power” and prefers giving to traditional ¥ Overcoming racial, cultural, and economic women’s interest areas. barriers. ¥ Familiar with financial matters. ¥ Baby Boomers (born between 1946 and 1964) ¥ Accepting the power and responsibility are more likely to earn money, make decisions associated with money. about it, and seek accountability in the ¥ Solicited directly from charities for donations. organizations in which they invest. ¥ Comfortable making gifting decisions for the Women born after 1964 tend to resist a separate money they share with their husbands, even if ¥ focus on women. They typically earn their own the husband has earned the majority of it. money and depend less on others for financial Feeling that they do not need permission to give. ¥ support.4 ¥ Becoming financially secure and valuing their giving ability. Today, women have increased control over ¥ Feeling comfortable about the future. more money than ever before and are viewing ¥ Comfortable being a public, visible strategic philanthropy as an opportunity to help A PLAN OF ONE'S OWN AOF ONE'S PLAN philanthropist. shape the future of society. Barriers do exist … ¥ Viewing themselves as philanthropists. but as women become more aware of opportunities to give, these barriers will Some of these barriers may be generational. Age continue to be broken. and social influences can have an impact on women’s giving. In her article “No Longer Invisible: The Emerging Role of Women as Philanthropists,” Andrea Kaminski identifies some generational differences in women’s giving: A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S ¥ In the “mature” generation (women born prior to 1931), economic upheaval in childhood led many to commit to giving, sharing, and accepting community responsibility to rebuild society. These women also share a fear of losing their money. Many women never brought home a paycheck so may not think of money as something they can replace. In fact, they may not know how much money they, have much less how they can invest it for growth. They may feel a responsibility to pass all their money to 4 Andrea Kaminski, “No Longer Invisible: The Emerging Role of Women as their children and continue to support their Philanthropist,” Connections (The Association of Professional Researchers for husband’s causes out of a sense of loyalty. Advancement), Spring 2001.
6 “WOMEN DONORS ARE SEEN AS THE NEW FRONTIER, THE NEW POSSIBILITY.” Christine Grumm, Women’s Funding Network
Your Journey: Putting It All Together
TIRELESS AND DEDICATED VOLUNTEERS, WOMEN ¥ Teach the art of philanthropy to the next HAVE LONG BEEN THE BACKBONE OF generation. Instill in your children, and the PHILANTHROPY. young people you associate with, the values you treasure and your commitment to support them. Women are increasingly learning of the benefits ¥ Have fun with your philanthropy. Celebrate your and rewards of leveraging time, talent, and birthday with a philanthropic gift that you might resources on behalf of their interests. Women are not have thought was possible. Surprise your now merging power, wealth, and the desire to act friends and family by giving in their names, or as catalysts for change within their communities. giving to a nonprofit of their choice. The Through strategic giving, women are at the leading possibilities are endless! edge of a new era of philanthropy. Each individual or family who establishes a Combine women’s thoughtful approach to giving charitable giving program is making a far-reaching with their growing philanthropic potential, and a contribution to improve the human condition. It is blueprint for a new philanthropic landscape an investment in humanity that brings a great sense emerges. of accomplishment and satisfaction. It proves the You may be overwhelmed with information and truth of the poet James Russell Lowell’s uncertain about where to begin. Here is some observation: “All the beautiful sentiments in the advice from Martha Taylor and the Women’s world weigh less than a single caring action.” Philanthropy Institute: Women have emerged as leaders in business, ¥ Begin your philanthropy as early in life as government, and other professional careers, and possible. Even if you can’t give as much as are poised to make a major philanthropic impact you’d like, your gifts will add up and begin to by seeking guidance regarding choices about what
form your legacy. becomes of their wealth—how much they spend, OWN AOF ONE'S PLAN ¥ Find your passion, and focus your gifts rather how they invest, how much goes back to society in than scattering them. the form of taxes, and what they accomplish ¥ Think about two or three areas or causes you through strategic philanthropic giving. want to support and make this your philanthropic vision. Not only will your gifts Consider … have more impact, but you will find your giving ¥ If women continue to give more strategically, more satisfying. the impact will be magnified across the country. ¥ Work for parity in giving in your household. ¥ If more women give to the causes they care
You and your spouse/ partner should have equal about, and women who already donate give PHILANTHROPY TO GUIDE A WOMAN'S say about which causes your contributions more, women will help shape a better society for support and what amount is given. future generations. ¥ If you can, give out of your assets to the causes ¥ If more women give to causes that reflect their about which you are passionate. Think of your beliefs and values, they will transform the philanthropy as you would a child—your philanthropic landscape. investment in the future of our world. ¥ If more women give to organizations benefiting ¥ Consider the strength of numbers. Organize with women, some basic gender inequities will be others to provide a pooled gift that can make a addressed. project possible. ¥ Leverage your giving. Increase your impact by Now, let’s begin to create your own charitable challenging others to support the causes you giving plan. hold dear.
7 “THINKING ABOUT OUR POTENTIAL AS DONORS—AT WHATEVER FINANCIAL LEVEL—I AM CONVINCED WILL HELP CREATE A MORE COMPASSIONATE WORLD FOR OURSELVES AND THE PLANET.” Tracy Gary, Inspired Philanthropy: Creating a Giving Plan
Creating Your Own Charitable Giving Plan
THE FIRST STEP IN CREATING A GIVING PLAN IS TO WHERE TO GIVE? DEFINE YOUR MISSION AND DETERMINE HOW YOU For some people, one of the most difficult aspects WOULD LIKE TO STRUCTURE YOUR GIVING. AS WITH of charitable giving is determining where to give ANY IMPORTANT ENDEAVOR IN YOUR LIFE, their money. There are so many opportunities to THOUGHTFUL PLANNING IS IMPORTANT. give that it can be overwhelming to decide where to put your resources. Thousands of organizations Before determining how you would like to and causes compete for funding to do their good structure your giving, try answering the questions works. below. Your honest, thoughtful responses to these questions will better prepare you when you How do you begin? structure a charitable giving plan that best reflects Tracy Gary and Melissa Kohner, authors of your life’s experiences, values, goals, and Inspired Giving: Creating a Giving Plan, write passions. that creating a giving plan is a process of distilling what you love and are concerned with and GIVING QUESTIONS: threading those issues with your own values, ¥ Why are you interested in charitable giving? money, and time. It’s also choosing initiatives, ¥ What would you like to accomplish with your leaders, and non-profits whose missions and giving? strategies are working to make the changes you ¥ What are your values and goals for your giving? want to see. ¥ How would you like to be involved in, or Gary and Kohner believe that knowing what manage, your giving? you feel passionate about is the first step in ¥ How much money do you want to commit to determining how your personal contributions of A PLAN OF ONE'S OWN AOF ONE'S PLAN your philanthropy during your lifetime? After money, time, and energy will be most effective … your death? and that giving money is about giving part of ¥ Do you want to involve others in your giving, yourself. either inside or outside your family? If so, who? The authors suggest identifying your top three values and top three interest areas and concerns ¥ Are there time-sensitive tax considerations and then determining if there is a relationship influencing your giving decision? between the two. They give the following Are you comfortable with a legally binding ¥ example: commitment for a period of time? Do you need income from your financial assets ¥ My top three values are dignity, equality, and A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S now? What are these needs? opportunity, and my top three issue areas are ¥ Would you like your charitable giving to be part education, economic justice, and youth of your retirement planning? If so, in what development. I believe that the opportunity for a ways? good education, particularly for young people who ¥ How have you given to charity in the past? are shut out of their full potential early on because of poor schools, is vital to dignity, equality, and finally, economic justice for everyone.
8 CREATING YOUR OWN CHARITABLE GIVING PLAN
In deciding where to make your charitable gifts, WHAT TO GIVE? you’ll want to make sure that the recipients of your With the variety of giving options available, your gifts have tax-exempt status from the Internal contribution may consist of almost any property, Revenue Service, so that you may claim the tangible or intangible. The following list provides appropriate federal tax deduction for your gift. some of the most common types of assets that you There are also a growing number of resources can donate to charity. This can help to give you an available to help you find a charity that provides idea of what assets you might consider using as programs and services reflecting values similar to you develop your giving plan. Consult a your own. Research nonprofits working in areas of professional advisor for specific details. particular interest to you, and learn more about a particular nonprofit before making a giving ¥ Cash and cash equivalents decision.5 ¥ Publicly traded securities ¥ Closely held securities HOW MUCH TO GIVE? ¥ Life insurance Determining how much to give to charity is a ¥ Real estate personal choice. The only legal requirements for ¥ Personal property giving levels relate to private foundations, which Retirement assets are required by federal law to pay out annual ¥ In-kind gifts and pro bono services grants totaling a minimum of 5% of their assets. ¥ The appropriate charitable giving amount will be different for every person. Deciding how much WHAT GIVING VEHICLES WORK FOR YOU? to give to charity can be influenced by many Charitable giving comes in many forms—all of factors including your family situation, retirement them helpful and beneficial to society. The key is goals, financial picture, personal values, and to give in a way that is most consistent with your passions. personal values and passions. The following Do you want to set a target amount or summaries outline the major variations among percentage of income each year? The national giving options. This information is not meant to be all-inclusive but rather to serve as a first step in average for those who itemize their charitable OWN AOF ONE'S PLAN contributions is 2%. Some faith-based institutions helping you move to the next phase of your giving recommend “tithing”—based on the belief of plan. giving the first and best to faith—which can be up Creating a charitable giving program is exciting to 10% of your before or after tax income. in that you are not limited to just one giving vehicle! Each donor has unique, specific, interests What is comfortable for you? and conditions that must be analyzed in detail What would be a good challenge or stretch? together with a professional advisor (lawyer, A number of experts believe many Americans can accountant, insurance broker, or financial advisor) give a great deal more to charities than they before moving forward to the next phase. The A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S currently give. New Tithing, a nonprofit chart on page 32 provides a simple way to organization dedicated to increasing the charitable compare and contrast giving options based on a donations of Americans, uses a formula to number of criteria. determine a feasible level of giving for donors. The organization’s website (www.newtithing.org) has information and an online calculator to assist donors in determining comfortable and affordable donations. The formula is based on your annual surplus income and investment assets minus your 5 Tracy Gary and Melissa Kohner, Inspired Philanthropy—Creating a Giving current debts. Plan, Chardon Press, Berkeley, CA, 1998.
9 CREATING YOUR OWN CHARITABLE GIVING PLAN
1 Make a direct gift to an established charity
Established charities include charitable The tax deduction for gifts of cash to charity organizations such as churches, educational can be up to 50% of your adjusted gross income institutions, or other nonprofits working in for the year. It is also possible to give gifts of health care, education, the environment, human property to charity, including real estate, mutual services, arts, and others. funds, stocks, and other securities. These gifts provide different deductions for tax purposes. Finding a charity that provides programs and An increasingly popular way to give is through services that reflect values similar to your own is federated funds, like the United Way, the usually not difficult—you probably know of some Combined Federal Campaign, the Black United already. If you have questions about the reliability Funds, and others that collect and distribute donor of a particular national nonprofit, the BBB Wise dollars to nonprofit organizations. Federated funds Giving Alliance (formerly the National Charities raise their funds largely through annual workplace Information Bureau and the Council of Better giving campaigns, and distribute to local, state, Business Bureaus Foundation) is a source of and national nonprofit organizations. Check with information on larger, well-established nonprofit your employer for details about workplace giving organizations (www.give.org). Remember to verify options available. the organization’s tax-exempt status.
NEXT STEP: TO FIND OUT MORE ABOUT NONPROFIT ACTIVITIES IN YOUR AREA, CONSULT YOUR LOCAL COMMUNITY FOUNDA- A PLAN OF ONE'S OWN AOF ONE'S PLAN TION, UNITED WAY (WWW.UNITEDWAY.ORG), WORK PLACE GIVING PROGRAM, STATE ASSOCIATION OF NON-PROFITS, CHAMBER OF COMMERCE, OR THE ONLINE DONATION SITE NETWORK FOR GOOD (WWW.NETWORKFORGOOD.ORG). A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
10 CREATING YOUR OWN CHARITABLE GIVING PLAN
More than 80% of the money raised by charities in this country comes from individuals. ‘‘ BBB WISE GIVING ALLIANCE’’
11 CREATING YOUR OWN CHARITABLE GIVING PLAN
2 Create a private or family foundation
Private foundations are a popular, long-standing Another important benefit of a private form of philanthropy in the United States. foundation is that the funds continue to provide charitable capital as long as the foundation exists. Private foundations are generally founded by an This allows foundations to provide for the long- individual, a family, or a group of individuals and term needs of the organizations and the issues you organized as nonprofit corporations (giving the want to support, typifying the kind of long-term foundation the same tax-exempt status as a impact philanthropy can have on social change. By charitable organization) or charitable trusts. You making endowed gifts, whereby the principal gift can appoint yourself, as well as other family generates annual revenue, the donor’s influence members or friends, to the foundation’s governing can continue to make an impact for generations to board, which is charged with fiscal oversight and come. allocating funds. Private foundations must make charitable Private foundations are flexible in terms of who expenditures of approximately 5% of the market can start one and why. Families sometimes use a value of their assets each year. For example, if family foundation as a forum in which family foundation assets are $5 million, the annual payout members can work toward common goals, or as a in grants would be $250,000. Although exempt way to instill the value of charitable giving in from federal income tax, private foundations must future generations. Individuals who start a private pay a yearly excise tax of 1%Ð2% of their net foundation may do so to retain personal control investment income. and flexibility in their giving program. A group of In addition to the private grantmaking endowed individuals may choose to create a private foundation, there are two other variations of foundation to work toward common goals. Private private foundations to consider: foundations can vary greatly in size and levels of The Pass-Through Foundation is a private involvement. Some are staffed with professional grantmaking organization that distributes all of the
A PLAN OF ONE'S OWN AOF ONE'S PLAN grantmakers, others rely on a collective decision contributions it receives each year—not just 5% of making process to award grants, and others assets. A pass-through option may be made or allocate funds based on donor choice. revoked on a year-to-year basis. As a charitable organization, a private The Private Operating Foundation uses the bulk foundation is exempt from federal income tax, and of its income to actively run a charitable program your gifts to the foundation afford you certain tax or service, thus eliminating the need to decide advantages. You may deduct up to 30% of your annually where funds should be granted. Examples annual adjusted gross income for cash donations. include the operation of a museum, library, Gifts of property may be deducted as indicated by research facility, or historic property. Some private the chart on page 32. If any of your gifts in any operating foundations also choose to make some A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S year exceed the allowed maximum deduction, you grants to other charitable organizations, but this is may carry over the excess deduction for up to five individually determined. years.
NEXT STEP: CONTACT THE COUNCIL ON FOUNDATIONS (WWW.COF.ORG), THE NATIONAL CENTER FOR FAMILY PHILANTHROPY (WWW.NCFP.ORG), THE FORUM OF REGIONAL ASSOCIA- TIONS OF GRANTMAKERS (WWW.GIVINGFORUM.ORG), OR YOUR LOCAL COMMUNITY FOUNDA- TION ABOUT YOUR CHARITABLE INTERESTS.TO FIND YOUR LOCAL COMMUNITY FOUNDATION OR REGIONAL ASSOCIATION OF GRANTMAKERS, CONSULT THE COUNCIL ON FOUNDATION’S COMMUNITY FOUNDATION LOCATOR (WWW.COF.ORG) OR THE FORUM OF REGIONAL ASSOCIA- TIONS OF GRANTMAKERS.
12 CREATING YOUR OWN CHARITABLE GIVING PLAN
Private and community foundation giving has more than doubled since 1995 and private foundation ‘‘growth has been strong in recent years, in part due to the New Economy, with 50,201 grantmaking foundations operating in 1999. Foundation Yearbook, THE’’ FOUNDATION CENTER
13 CREATING YOUR OWN CHARITABLE GIVING PLAN
3 Give to, or through, a community foundation or public foundation
Community foundations are local charitable for the fund, or designate a specific charitable organizations that administer a number of organization, such as the local library, to benefit. endowed and non-endowed funds for local While the final decision on grant distributions rests purposes. with the board of trustees of the community foundation, your fund is not subject to the excise Because community foundations are tax and payout requirements of a private geographically focused, they are able to become foundation. expert in solving community or regional problems A donor-advised fund can be established and improving the lives of people in their area quickly and easily. While the community through the funds they administer. foundation will charge a small annual fee for Community foundations are found in most administering your fund, research indicates that, major cities and in numerous counties and smaller depending on asset size, it is normally less towns; some are statewide. Growing in popularity expensive than the annual operating expenses of a among donors and nonprofits, community private foundation. foundations do offer some distinct advantages and You may also choose to support one of the other options when targeting giving for community public foundations in your area. A typical public needs. foundation is a charity established to address a As a donor, you have several ways in which particular issue (such as the environment) or you can make a gift to a community foundation. support the needs of a particular demographic You may simply make an unrestricted gift, the segment (such as the African American income from which is used where the community community). Its geographic focus may be local, foundation’s board of knowledgeable local statewide, national, or international. Examples leaders/volunteers deem it is most needed. You include the Associated Black Charities of may support a field of interest fund for the arts, Maryland, the Florida Education Fund, the
A PLAN OF ONE'S OWN AOF ONE'S PLAN education, environment, or other area of charitable Foundation for the Jewish Community, and the interest. Or you may identify one or several Children Affected by AIDS Foundation. nonprofit organizations to benefit annually from Public foundations offer the same giving your endowed gift. opportunities and tax advantages as community Because community foundations are public foundations. (Community foundations are, in fact, charities supported by donors from across the a special kind of public foundation.) community, all contributions are eligible for the maximum tax benefits (up to 50% of adjusted CHARITABLE GIFT FUNDS gross income). Many financial institutions provide opportunities Many individuals, families, and even for clients to establish charitable gift funds. These A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S corporations are creating donor-advised funds tax-deductible funds allow the donor to make within their local community foundations. Donor- recommendations about charities they wish to advised funds are exactly what they sound like. support. You can name the fund, establish a broad purpose
NEXT STEP: CONSULT YOUR LOCAL COMMUNITY OR PUBLIC FOUNDATION OR FINANCIAL INSTITUTION ABOUT YOUR CHARITABLE INTERESTS. TO FIND LOCAL INSTITUTIONS FOR FUR- THER INFORMATION, CONTACT THE COUNCIL ON FOUNDATION’S COMMUNITY FOUNDATION LOCATOR (WWW.COF.ORG) OR THE FORUM OF REGIONAL ASSOCIATIONS OF GRANTMAKERS (WWW.GIVINGFORUM.ORG) TO FIND YOUR LOCAL REGIONAL ASSOCIATION.
14 CREATING YOUR OWN CHARITABLE GIVING PLAN
In 2000, U.S. community foundations gave an estimated $2.2 billion to communities across the country ‘‘—a record level of giving. Foundation Yearbook,’’ THE FOUNDATION CENTER
15 CREATING YOUR OWN CHARITABLE GIVING PLAN
4 Join or start a women’s fund or foundation
A women’s fund or foundation can channel including funds focused just on, for example, women’s philanthropy to support programs that women’s athletics or women in the arts. primarily benefit women and girls (though Additionally, there are some women’s funds sometimes the money may be distributed to other that are dedicated to social change philanthropy, causes). which invests in the solutions that marginalized communities design. These include organizing and Women’s funds are public funds, and so like advocacy strategies that create social and policy community foundations and other public funds, changes to promote equity for people of color, both receive donor resources and make grants to low-income populations, women, immigrants and women and girls’ organizations. Though women’s refugees, international communities, disabled funds share the mission of serving women and people, and lesbian and gay people. Social change girls, the breadth and depth of issues is extensive. philanthropy involves community leaders, change There are funds that focus on social, economic, agents, and disenfranchised populations in and cultural issues impacting women and girls, grantmaking, since they know best how to allocate resources in their communities.
NEXT STEP: CONTACT YOUR LOCAL WOMEN’S FOUNDATION AND/OR THE WOMEN’S FUNDING NETWORK (WWW.WFNET.ORG), WOMEN & PHILANTHROPY (WWW.WOMENPHIL.ORG) OR WOMEN’S PHILANTHROPY INSTITUTE (WWW.WOMEN-PHILANTHROPY.ORG) A PLAN OF ONE'S OWN AOF ONE'S PLAN FOR FURTHER INFORMATION ON STARTING OR GETTING IN- VOLVED IN A WOMEN’S FOUNDATION. A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
16 CREATING YOUR OWN CHARITABLE GIVING PLAN
The trend of women funding issues affecting women and girls has grown substantially in recent years, ‘‘as evidenced both in the growth of women’s funds and support of traditional female causes, such as breast cancer. In 1979, there were 5 women’s funds; and in 2001, there are over 95 women’s funds. WOMEN’S FUNDING NETWORK’’
17 CREATING YOUR OWN CHARITABLE GIVING PLAN
5 Develop a corporate giving program or corporate foundation
If you are the owner of a family business or an times and the ability to preserve the company’s officer of a corporation, there are at least two name in an era of mergers and acquisitions. company-run charitable giving vehicles for you The corporate foundation is usually started with to consider. a single gift that can become the endowment, which may be added to on an annual basis or when Many companies have an annual giving program profits allow. Like a private foundation, a to make grants, funded as part of each year’s corporate foundation typically allocates grants operating budget for the company. Owners can based on the profits from the invested principal blend the family business with family philanthropy (endowment) and payout 5% of assets each year. by channeling support through their family The foundation’s officers are usually the company corporation(s). This kind of program has no owners and key executives. At some companies, independent endowment. Corporate staff, directed committees of employees make recommendations by the CEO or an advisory committee of about projects they believe are worthy of support. management staff members, administers its The corporate foundation is subject to the same budget. The corporate giving program is not rules and regulations applicable to other private subject to the rules and regulations governing foundations. private foundations. In addition to grant programs that enhance the However, many corporate leaders have chosen corporation’s strategic business interests, corporate to take the next step by creating a corporate foundations and giving programs often offer to foundation as an independent tax-exempt private match employee gifts of cash and volunteer time to foundation or creating a fund at a community nonprofit organizations. Companies may also foundation. Advantages that may appeal to you in make gifts of in-kind products to nonprofits and/or this option include the ability to preserve the organize workplace volunteer efforts for the good company’s charitable giving during lean economic of the community. A PLAN OF ONE'S OWN AOF ONE'S PLAN
NEXT STEP: CONTACT THE FORUM OF REGIONAL ASSOCIATIONS OF GRANTMAKERS (WWW.GIVINGFORUM.ORG) TO FIND YOUR LOCAL REGIONAL ASSOCIATION, AND/OR THE COUNCIL ON FOUNDATIONS (WWW.COF.ORG) FOR FURTHER INFORMATION ON
A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S HOW TO DEVELOP A CORPORATE GIVING PROGRAM.
18 CREATING YOUR OWN CHARITABLE GIVING PLAN
Women business owners surpass the general population in their level of involvement in philanthropy, both in ‘‘money donated and time volunteered …[M]any make charitable contributions through their businesses and have programs to encourage their employees to volunteer. THE CENTER’’ FOR WOMEN’S BUSINESS RESEARCH
19 CREATING YOUR OWN CHARITABLE GIVING PLAN
6 Establish a supporting organization
A supporting organization is a way for a donor to the most common form of a supporting support one nonprofit organization in a deep and organization, the nonprofit controls a majority of meaningful way while still being involved in the the board appointments. The mission of the grant decisionmaking process and receiving tax supporting organization must also be compatible benefits. with the mission of the nonprofit with which it is identified. The donor, as a board member, is This approach is beneficial if you are seeking an involved in making grants to specific projects or alternative to establishing your own private requests from the nonprofit organization. foundation but still prefer close involvement with Creation of a supporting organization provides grant decisions. In terms of donor control, a an excellent means for a donor to involve family supporting organization, in all its forms, lies members in grantmaking decisions, and often somewhere between a private foundation and a provides access to the program staff of the donor-advised fund at a public foundation. nonprofit for assistance with those decisions. The Since the supporting organization is identified popularity of the supporting organization as a with a publicly supported nonprofit organization, philanthropic vehicle has grown rapidly as donors the donor enjoys the tax benefits and the donor have come to realize that this option avoids many and/or members of the donor’s family may serve of the disadvantages of private foundations (such as members of its separate board. This board is as a need for staff) without requiring that the normally composed of members appointed by the organization abide by other restrictions on public donor and members appointed by the nonprofit. In charities. A PLAN OF ONE'S OWN AOF ONE'S PLAN
NEXT STEP: CONTACT YOUR LOCAL COMMUNITY OR PUBLIC FOUNDATION, THE FORUM OF REGIONAL ASSOCIATIONS OF GRANTMAKERS (WWW.GIVINGFORUM.ORG), AND/OR THE COUN- CIL ON FOUNDATIONS FOR FURTHER INFORMATION ON HOW TO DEVELOP A SUPPORTING ORGANIZATION. A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
20 CREATING YOUR OWN CHARITABLE GIVING PLAN
Establishing a supporting organization at a community foundation is a great approach if you are ‘‘seeking an alternative to establishing your own private foundation but still prefer close involvement with grant decisions. FORUM OF REGIONAL’’ ASSOCIATIONS OF GRANTMAKERS, NEW VENTURES IN PHILANTHROPY INITIATIVE
21 CREATING YOUR OWN CHARITABLE GIVING PLAN
7 Establish your own giving circle
Many women who are involved in giving circles the level of involvement can be flexible; women may also give through other vehicles. can choose to serve on committees, take on a leadership role, or simply serve as a general A giving circle is a group of individuals who member. Perhaps the most important part of a contribute equally to a pooled fund; invest the giving circle is that it provides a way for donors to money; and participate in decisions about how to learn about philanthropy in an engaged yet non- distribute these funds to philanthropic threatening way. organizations or causes. According to Sondra Donors often commit to participation in a Shaw-Hardy, a founder of the Women’s giving circle for a number of years at an Philanthropy Institute, giving circles work well established dollar level. The pooled funds may be because everyone gives the same amount and held at a public foundation in the form of a donor- makes decisions collaboratively—there is an advised fund, for example, at a local bank, or by equality and inclusiveness women appreciate. some other nonprofit or commercial entity that With the collective gifts of a circle, the will invest the funds and enable them to earn members can experience the benefits of being a income. Many women enjoy the collaboration, major donor, because the grants made by giving camaraderie, and leveraged impact of a giving circles are large enough to give the members the circle. power to designate the use of the gift. In addition,
NEXT STEP: A “GIVING CIRCLE STARTER KIT” IS AVAILABLE FROM A PLAN OF ONE'S OWN AOF ONE'S PLAN THE FORUM OF REGIONAL ASSOCIATIONS OF GRANT-MAKERS (WWW.GIVINGFORUM.ORG). CONTACT YOUR LOCAL COMMUNITY OR PUBLIC FOUNDATION AND THE WOMEN’S PHILANTHROPY INSTITUTE (WWW.WOMEN-PHILANTHROPY.ORG) FOR FURTHER IN- FORMATION ON HOW TO START A GIVING CIRCLE. A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
22 CREATING YOUR OWN CHARITABLE GIVING PLAN
Giving circles, a kind of social investment club, are an enormously powerful way to impact social change ‘‘and pave the way for a new frontier in philanthropy. SONDRA SHAW-HARDY, WOMEN’S PHILANTHROYPY INSTITUTE’’
23 CREATING YOUR OWN CHARITABLE GIVING PLAN
8 Venture philanthropy
Venture philanthropists “invest” in nonprofit venture philanthropists seek to fund intensively to organizations in the same manner as one invests build capacity and grow strong nonprofit in for-profit enterprises, which typically includes organizations. providing financial resources, as well as Individuals can join a number of venture management and technical support over a philanthropy funds. Each is different in what it sustained period of time. asks from donors, in terms of involvement in grantmaking and intellectual capital provided to Venture philanthropy came of age during the boom selected nonprofits. Some individuals, also venture of the New Economy and borrows both language philanthropists, make strategic donations through and technique from the venture capital world, with their private foundations or direct gifts that are the fundamental difference and emphasis on the often multi-year, capacity-building, or operational social return on investment. in nature. With a focus on donors who give both in terms of financial resources and intellectual capital,
NEXT STEP: VISIT NEW PROFIT, INC. (WWW.NEWPROFIT.ORG), THE MORINO INSTITUTE (WWW.MORINO.ORG), SOCIAL VENTURE PART- NERS (WWW.SVPSEATTLE.ORG), AND THE FORUM OF REGIONAL ASSOCIATIONS OF GRANTMAKERS (WWW.GIVINGFORUM.ORG), FOR FURTHER INFORMATION ON VENTURE PHILANTHROPY. A PLAN OF ONE'S OWN AOF ONE'S PLAN A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
24 CREATING YOUR OWN CHARITABLE GIVING PLAN
Venture philanthropists ‘invest’ in nonprofit organizations in the same manner as one ‘‘invests in for-profit enterprises, which typically includes providing financial resources, as well as management and technical support over a sustained period of time. ASSOCIATION OF BALTIMORE AREA GRANTMAKERS, BALTIMORE GIVING PROJECT’’
25 CREATING YOUR OWN CHARITABLE GIVING PLAN
9 Explore your local women’s initiatives, giving programs, or alma mater programs
Over the past decade, an increasing number of nonprofits have identified the need for special NEXT STEP: CONTACT THE WOMEN’S PHILANTHROPY programming designed to reach and involve more INSTITUTE (WWW.WOMEN-PHILANTHROPY.ORG), THE women as donors. UNITED WAY (WWW.UNITEDWAY.ORG), YOUR ALMA MATER, OR YOUR LOCAL NONPROFIT ASSOCIATION Women’s philanthropy initiatives are up and FOR FURTHER INFORMATION ON WOMEN’S PHILAN- running in nonprofits as diverse as universities, THROPY INITIATIVES IN YOUR AREA. private schools, YWCAs, environmental organizations, and United Ways. These programs provide a wonderful opportunity to learn about philanthropy, support a favorite charity, and find out more about how women give.
WOMEN’S PHILANTHROPY PROGRAMS MAY TAKE THE FORM OF:
¥ a women’s major gift club, which may ¥ a women’s campaign; include volunteer fundraising; a women’s giving circle; or
¥ a leadership council that advocates for ¥ a combination of these programs. women in a nonprofit institution and A PLAN A OFOWN ONE'S PLAN provides opportunities for leadership;
¥ a “focus on connection” that provides These women-focused programs differ from programming of interest women’s foundations and funds in that they to women donors; do not generally target women’s issues. A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
26 CREATING YOUR OWN CHARITABLE GIVING PLAN
Women have the same core motivations for giving as men—altruism, gratitude, the desire to make a ‘‘better world…however, women approach giving differently than men, just as they have different styles of communication and management. WOMEN’S PHILANTHROPY’’ INSTITUTE
27 CREATING YOUR OWN CHARITABLE GIVING PLAN
10 Explore your planned giving options
Planned giving makes it possible for you to give There are several options in planned giving, all of to the nonprofit of your choice while meeting which can be further discussed with a trusted your current income needs and providing for advisor who can fully explain the impact of each your heirs. choice and assist you in making this decision. One choice is to establish a charitable remainder trust, Recent research by Cindy Sterling indicates that in which provides you with an income with the planned giving women are more likely to give remaining assets passing on to the nonprofit you through bequests, while men are more likely to designate upon your death. A charitable remainder make life-income gifts. One expert quoted trust allows a tax deduction the year the trust is speculates that a bequest may feel safer to women, formed. Another choice is a charitable lead trust, who may fear outliving their resources or not which pays regular, fixed amount to a nonprofit for leaving enough money for their children and a specific number of years. At the end of that time, grandchildren.6 Yet choosing to make a life-income the remainder of the trust passes to your heirs. gift will provide you with annual income, and may provide significant tax advantages, as well as enable you to see the results of your philanthropy during your lifetime.
NEXT STEP: SPEAK WITH A TRUSTED FINANCIAL OR LEGAL ADVISOR ABOUT YOUR PLANNED GIVING OPTIONS. FOR GENERAL INFORMA-
A PLAN OF ONE'S OWN AOF ONE'S PLAN TION ABOUT PLANNED GIVING, VISIT THE NATIONAL COMMITTEE ON PLANNED GIVING (WWW.NCPG.ORG) AND THE SOCIETY OF FINANCIAL SERVICE PROFESSIONALS (WWW.FINANCIALPRO.ORG). THE NATION- WIDE “LEAVE A LEGACY” PROGRAM PROVIDES LOCAL INFORMATION REGARDING PLANNED GIVING AT WWW.LEAVEALEGACY.ORG. A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S
6 Cindy Sterling, “New Research Finds Gender Differences in Planned Giving: Parts One and Two,” Women in Philanthropy Institute News (Women’s Philanthropy Institute), March 2001, June 2001.
28 CREATING YOUR OWN CHARITABLE GIVING PLAN
Women outlive men by an average of 7 years, and an estimated 85Ð90% of women are left in charge ‘‘of family financial affairs. All money that is not bequeathed in a will ends up as a donation to the United States government—75% of Americans do not have wills. ’’KELLY BOLTON, MERRILL LYNCH
29 TION ON TION OF UNITED WAY NFORMA ASSOCIA In its most recent survey, the Independent In its most recent survey, an enhanced capacity? If you’re providing direct an enhanced capacity? on a board of directors service, how about serving Can you provide much or on an advisory board? services pro bono (legal, needed professional design) as part of your accounting, graphic Could you become a volunteer commitment? Most people find they can volunteer fundraiser? dollars for their cause this leverage many more You give on their own. way than they ever could of your own financial can stretch the impact others to join you. contribution by asking service at Sector calculates the value of volunteer Use this figure, if you like, to $15.39 per hour. and give a dollar value to your volunteer work make it a part of your formal giving plan. .NCNA.ORG), OR .ORG) FOR FURTHER I (WWW TCH.ORG, YOUR STATE CONTACT CONTACT YOUR LOCAL VOLUNTEER BUREAU, VOLUNTEERMA NONPROFITS (WWW.UNITEDWAY HOW TO VOLUNTEER YOUR TIME. NEXT STEP: Do you have long-standing commitments? Are Do you have long-standing commitments? Volunteer and share your skills and Volunteer there new organizations you’d like to explore as a there new organizations you’d like to explore your volunteer? Does your volunteering reflect you philanthropic passions and interests? Can or in increase your efforts by serving more hours In addition to giving dollars to nonprofit In addition to giving important way to help organizations, another to give your time. your community is are in great need of Nonprofit organizations may volunteers. Volunteering capable, committed your intellectual capital. also be a way to donate can help you get to volunteer involvement Your of the nonprofit in order to know the programs donate funds and can decide if you want to contributions you make to leverage the financial an organization.
11
CREATING YOUR OWNCHARITABLE GIVING PLAN A PLAN OF ONE'S OWN A WOMAN'S GUIDE TO PHILANTHROPY 30 CREATING YOUR OWN CHARITABLE GIVING PLAN
An estimated 83.9 million adults formally volunteered approximately 15.5 billion hours in 2000. Women ‘‘were more likely to have volunteered than men— 62% of women and 49% of men volunteered in 1998. INDEPENDENT SECTOR ’’
31 5 No No Yes Yes High 50% Limited SUPPORTING ORGANIZATION 5 if a 4 NA Yes Yes Yes 30% profits Yes, if a Yes, Yes, GIVING OR foundation foundation CORPORATE CORPORATE FOUNDATION 10% of pre-tax 5 1 5 2 3 No No , 10% of No No 5 High 50% Limited GIVING TO A GIVING TO COMMUNITY FOUNDATION 30% pre-tax profits OTHER PUBLIC FOUNDATION OR FOUNDATION Notes but the to the stated purpose, restricted gift can be confined A A and its disposition. control of the investments donor relinquishes to make recommendations fund permits the donor donor-advised foundation. ultimate control of the community subject to the or appointed to the board of any public Any citizen may be elected such an outcome The donor gift does not guarantee charity. organizations. except in the case of supporting assess a management or Community foundations often administrative fee. pay the same excise tax as any Corporate foundations must discussion of private foundations private foundation. See earlier regarding the payout requirement. can be carried forward for five years. One years excess donations gifts of closely held stock or real The deductible value of lifetime not market value. The deductible property is limited to the cost, stock is fair market value. value of gifts of publicly traded 5 5,6 1 2 3 4 5 6 Yes Yes Yes Yes High 30% 20% PRIVATE Yes (1–2%) Yes FOUNDATION 5 5 2 No No No No No Low 30% 50% CHARITY GIFTS TO GIFTS ESTABLISHED (% of adjusted gross The table on this page suggests differences in suggests differences The table on this page Cash income that may be deducted) Deduction for Gifts of Tax Stock or Real Property (% of adjusted gross income that may be deducted) Staff and Management Minimum Payout Required on Investment Must Pay Tax Deduction for Gifts of Tax Likelihood of Being Perpetual Donor or Family Member May Sit on Governing Board Requires Donor Time and Effort, Plus Expense of FACTORS Donor Can Control Assets and Priorities tax deductions. It is admittedly simplistic, but tax deductions. It is comparisons. provides a basis for COMPARISON OF OPTIONS COMPARISON FOR GIVING foundation, give to create a private The decision organization, an established nonprofit directly to or foundation, fund within a community establish a be determined based on a another option should professional advice variety of factors. Detailed an attorney or certified should be secured from with foundations, trusts, public accountant familiar area’s Regional Your and planned giving. will be glad to advise Association of Grant-makers forward with the next you on how to move important step. CREATING YOUR OWNCHARITABLE GIVING PLAN
A PLAN OF ONE'S OWN A WOMAN'S GUIDE TO PHILANTHROPY 32 “I THINK WOMEN ESPECIALLY VALUE THE RELATIONSHIPS THEY DEVELOP WITH FINANCIAL ADVISORS WHO INITIATE THE TOPIC OF PHILANTHROPY. WE ARE LOOKING FOR ADVISORS WHO TAKE SERIOUSLY, AND ARE WILLING TO THINK CREATIVELY ABOUT, OUR DESIRE TO EXPLORE PHILANTHROPIC OPTIONS.” Robin Williams Wood, Baltimore’s African American Philanthropy Initiative
Working with Advisors
PROFESSIONAL ADVISORS CAN BE INVALUABLE Selecting Professional Advisors: GUIDES IN HELPING YOU PLAN AND EXECUTE YOUR Because advisors have different expertise and CHARITABLE GIVING. different products and services to sell, you may get a variety of opinions when asking for a When fully apprised of your values, interests, and recommended course of action. As a consumer, intentions, advisors help provide thorough you need to find the right match of skills and information on your giving options and how these personality to meet your needs. You can interview options will work in your specific financial prospective advisors about their expertise in the situation. They can also project how each option giving vehicles you are considering, but it may will affect your tax savings and legacy planning. also be important to learn about an advisor’s The type of advisor and expertise you most need experience in helping clients make determinations may depend, in part, on the kinds of giving options about their values and giving style. you’d like to examine in depth. What is most important in selecting an advisor, however, is the Donors are most satisfied with their advisors level of trust and care you receive as a client. when the advisor: ¥ Discusses philanthropy with them in detail, asks Types of Professional Advisors: questions, and listens. When planning their charitable giving, people ¥ Makes philanthropy a discussion about life most often work with one or more of the following goals, rather than about estate planning and types of professional advisors: mortality. ¥ Attorney (may include estate planning, tax, ¥ Keeps the giving plan simple and/or limits
mergers and acquisitions, or corporate) discussions of complex giving vehicles to the OWN AOF ONE'S PLAN ¥ Accountant top few options. ¥ Estate Planner ¥ Treats the plan as a vehicle for giving rather ¥ Financial Planner than as a financial product he/she is selling. ¥ Stock Broker ¥ Is a giver him/herself. ¥ Insurance Broker ¥ Knows when to look for additional assistance ¥ Planned Giving Officer (These advisors work rather than trying to be an expert on all aspects for the nonprofits who would accept your of giving and family dynamics. donation, but can provide good information to
share with your personal advisors.) Since charitable giving plans deal with personal PHILANTHROPY TO GUIDE A WOMAN'S ¥ Philanthropy Consultant (Some advisors from and sometimes sensitive issues, it is important the disciplines listed above are concentrating that you work with an advisor with whom you their businesses solely on helping clients with feel absolutely comfortable. When it comes to their charitable giving.) narrowing the field, trust your instincts.
33 RESOURCES FOR YOU
“WOMEN ARE BRINGING A ‘DIFFERENT SENSIBILITY’TO PHILANTHROPY, BECAUSE THEY CARE ABOUT AND ARE CONTRIBUTING TO THE IMPORTANT THINGS: HEATLH CARE, CHILDREN, EDUCATION, AND THE ENVIRONMENT. AND THE AMAZING THING IS, THEY DON’T CARE WHO GETS THE CREDIT. WOMEN JUST KNOW THAT A JOB NEEDS TO BE DONE, AND THEY ARE DOING IT.” Sondra Shaw-Hardy, Creating a Women’s Giving Circle
Council on Foundations New Tithing Group The Council on Foundations helps foundation New Tithing Group is a philanthropic research staff, trustees, and board members in their day-to- organization committed to increasing charitable day grantmaking activities and has a variety of giving. information available on their website and in print. ONE MARKET STREET, STEUART TOWER, SUITE 2105 1828 L STREET NW SAN FRANCISCO, CA 94105 WASHINGTON, DC 20036 415.274.2765 202.466.6512 WWW.NEWTITHING.ORG WWW.COF.ORG Resourceful Women Forum of Regional Associations of Grantmakers Resourceful Women promotes positive social Regional Associations of Grantmakers (RAGs) are change by educating and empowering women to nonprofit membership associations created by make informed choices when investing, spending, private grantmakers to enhance the effectiveness and contributing their money. of philanthropy in their cities, states, or regions. P.O. BOX 29423 New Ventures in Philanthropy, a national initiative SAN FRANCISCO, CA 94129 of the Forum, supports coalitions located across 415.561.6520 the United States that aim to increase philanthropy WWW.RW.ORG in their regions. Your local RAG and/or New Ventures coalition can provide you with Women’s Funding Network information and resources based on your WFN is an umbrella organization for women’s philanthropic interests. funds and foundations internationally. 1828 L STREET NW, SUITE 300 1375 SUTTER STREET, SUITE 406 WASHINGTON, D.C. 20036-5168 SAN FRANCISCO, CA 94109 202.467.0383 415.441.0706 WWW.GIVINGFORUM.ORG WWW.WFNET.ORG A PLAN OF ONE'S OWN AOF ONE'S PLAN National Center for Family Philanthropy Women’s Philanthropy Institute The NCFP was established by a group of family WPI is a nonprofit educational organization, philanthropists to focus on the importance of governed by women, that brings together families engaged in philanthropy and their philanthropists and volunteer and professional effective giving. fundraisers to educate, encourage, and empower women as philanthropists. 1220 NINETEENTH STREET NW, SUITE 804 WASHINGTON, D.C. 20036 134 W. UNIVERSITY DRIVE 202.293.3424 ROCHESTER, MI 48307 WWW.NCFP.ORG 248.651.3552 A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S WWW.WOMEN-PHILANTHROPY.ORG National Resources on Women and Giving BBB Wise Giving Alliance (Formerly the National Women & Philanthropy Charities Information Bureau and the Council of Women & Philanthropy is an association based in Better Business Bureau Foundation) is a source of Washington, D.C., of 300+ grantmakers and others information on larger, well-established nonprofit mobilizing the resources of the philanthropic organizations. community to achieve equity for women and girls. 4200 WILSON BOULEVARD, SUITE 800 1015 18TH STREET NW, SUITE 202 ARLINGTON, VA 22203 WASHINGTON, DC 20036 703.276.0100 202.887.9660 WWW.GIVE.ORG WWW.WOMENPHIL.ORG
34 GLOSSARY OF TERMS
501(c)(3) Section of the Internal Revenue Code that desig- Charitable Giving Plan nates an organization as charitable and tax-exempt. A plan that best reflects one’s life experiences, Organizations qualifying under this section include values, goals, and passions that structures giving to religious, educational, charitable, amateur athletic, a charitable organization(s). scientific, or literary groups, organizations testing Charitable Lead Trust for public safety or organizations involved in A legal device used to set aside the money or prevention of cruelty to children or animals. property of one person for the benefit of one or 509(a) more persons or organizations. Specifically, this Section of the tax code that defines public charities type of trust allows for a regular, fixed amount to (as opposed to private foundations). A 501(c)(3) go to a charity for a specific number of years. At organization also must have a 509(a) designation the end of that time, the remainder of the trust to further define the agency as a public charity. passes to one’s heirs. (See Public Support Test.) Charitable Remainder Trust Advisory Board A legal device used to set aside the money or A group of individuals, who offer advice, inform, property of one person for the benefit of one or or notify. An advisory board differs from an more persons or organizations. Specifically, this elected board in that they do not have any type of trust allows one to take a deduction for a oversight responsibilities. gift to the trust in the year in which the trust is formed. One receives income from this type of Altruism trust for life and after one’s death, the assets pass Altruism, like passion, is the key intent that to the charity you designated. philanthropy expresses; a concern for the welfare of others; selflessness. Charity In its traditional legal meaning, the word “charity” Annual Report encompasses religion, education, and assistance to A voluntary report published by a foundation or the government, promotion of health, relief of corporation describing its grant activities. poverty or distress and other purposes that benefit OWN AOF ONE'S PLAN the community. Nonprofit organizations that are Assets organized and operated to further one of these pur- Cash, stocks, bonds, real estate, or other holdings poses generally will be recognized as exempt from of a foundation. Generally, assets are invested and federal income tax under Section 501(c)(3) of the the income is used to make grants. (See Payout Internal Revenue Code (See 501(c)(3)) and will be Requirement) eligible to receive tax-deductible charitable gifts.
Bequest Community Foundation A bequest can be a legacy; a sum of money A community foundation is a tax-exempt, committed to an organization and donated upon nonprofit, autonomous, publicly supported, PHILANTHROPY TO GUIDE A WOMAN'S the donor’s death. philanthropic institution composed primarily of permanent funds established by many separate Board of Directors donors for the long-term diverse, charitable benefit An organized body of advisors with oversight of the residents of a defined geographic area. responsibility. Typically, a community foundation serves an area no larger than a state. Community foundations Challenge Grant provide an array of services to donors who wish to A grant that is made on the condition that other establish endowed and non-endowed funds funding be secured, either on a matching basis or without incurring the administrative and legal some other formula, usually within a specified costs of starting independent foundations. period of time, with the objective of encouraging expanded fundraising from additional sources.
35 GLOSSARY OF TERMS
Corporate Foundation specific public charities. These funds are A corporate (company sponsored) foundation is a sometimes established by a transfer of assets by a private foundation that derives its grantmaking public charity to a fund designated for its own funds primarily from the contributions of a profit- benefit, in which case they may be known as making business. The company-sponsored grantee endowments. The community foundation’s foundation often maintains close ties with the governing body must have the power to redirect donor company, but it is a separate, legal organiza- resources in the fund if it determines that the tion, sometimes with its own endowment, and is donor’s restriction is unnecessary, incapable of subject to the same rules and regulations as other fulfillment, or inconsistent with the charitable private foundations. needs of the community or area served.
Corporate Giving Program Endowment A corporate giving (direct giving) program is a The principal amount of gifts and bequests that are grantmaking program established and administered accepted are subject to a requirement that the within a profit-making company. Gifts or grants go principal be maintained intact and invested to directly to charitable organizations from the corpo- create a source of income for a foundation. Donors ration. Corporate foundations/giving programs do may require that the principal remain intact in not have a separate endowment; their expense is perpetuity, or for a defined period of time, or until planned as part of the company’s annual budgeting sufficient assets have been accumulated to achieve process and usually is funded with pre-tax income. a designated purpose.
Designated Funds Family Foundation A type of restricted fund in which the fund “Family foundation” is not a legal term, and beneficiaries are specified by the grantors. therefore, it has no precise definition. Yet, approximately two-thirds of the estimated 44,000 Discretionary Funds private foundations in this country are believed to Grant funds distributed at the discretion of one or be family managed. The Council on Foundations more trustees, which usually do not require prior defines a family foundation as a foundation whose approval by the full board of directors. The funds are derived from members of a single family. A PLAN OF ONE'S OWN AOF ONE'S PLAN governing board can delegate discretionary At least one family member must continue to serve authority to staff. as an officer or board member of the foundation; they or their relatives play a significant role in Donee governing and/or managing the foundation The receiving organization of a donor’s resources. throughout its life. Most family foundations are (See Grantee.) run by family members who serve as trustees or directors on a voluntary basis, receiving no Donor compensation; in many cases, second- and third- A donor is anyone who gives resources—financial, generation descendants of the original donors man- social, intellectual, and time—to a nonprofit A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S age the foundation. Most family foundations con- organization, public charity or fund. A donor is centrate their giving locally, in their communities. committed to making a difference in society. (See Grantor.) Federated Fund A centralized campaign whereby one organization Donor Advised Fund raises money for its member agencies. These A fund held by a community foundation or other annual workplace giving campaigns raise millions public charity, where the donor, or a committee of dollars for distribution to local, state, and appointed by the donor, may recommend eligible national nonprofit organizations. The United Way charitable recipients for grants from the fund. The and Community Works are examples. public charity’s governing body must be free to accept or reject the recommendations. Field of Interest Fund A fund held by a community foundation that is Donor Designated Fund used for a specific charitable purpose such as A fund held by a community foundation where the education or health research. donor has specified that the fund’s income or assets be used for the benefit of one or more
36 GLOSSARY OF TERMS
Giving Pattern to use to effect change. It is the leveraging of The overall picture of the types of projects and collective brainpower. programs that a donor has supported historically. The past record may include areas of interest, Legacy geographic locations, dollar amount of funding or The gift that an individual leaves, both in the kinds of organizations supported. details of their will and in the tradition of giving they shared with their descendants. (See Bequest) Grant An award of funds to an organization or individual Leverage to undertake charitable activities. A method of grantmaking practiced by some foundations and individual donors. Leverage Grant Monitoring occurs when a small amount of money is given The ongoing assessment of the progress of the with the express purpose of attracting funding activities funded by a donor, with the objective of from other sources or of providing the organization determining if the terms and conditions of the with the tools it needs to raise other kinds of funds; grant are being met and if the goal of the grant is sometimes known as the “multiplier effect.” likely to be achieved. Matching Gifts Program Grantee A grant or contributions program that will match The individual or organization that receives a employees’ or directors’ gifts made to qualifying grant. educational, arts and cultural, health or other organizations. Specific guidelines are established Grantor by each employer or foundation. (Some founda- The individual or organization that makes a grant. tions also use this program for their trustees.)
In-Kind Contribution Matching Grant A donation of goods or services rather than cash or A grant or gift made with the specification that the appreciated property. amount donated must be matched on a one-for-one basis or according to some other prescribed
Independent Foundation formula. OWN AOF ONE'S PLAN An individual usually founds these private founda- tions, often by bequest. They are occasionally Memorialize termed “nonoperating” because they do not run To commemorate; to present a memorial to; to their own programs. Sometimes individuals or honor the memory of an individual or group by groups of people, such as family members, form a donating resources or establishing a fund that foundation while the donors are still living. Many reflects the gifts, values or concerns of the large independent foundations, such as the Ford individual or group. Foundation, are no longer governed by members of the original donor’s family but are run by Nonprofit Organization boards made up of community, business and A term describing the Internal Revenue Service’s PHILANTHROPY TO GUIDE A WOMAN'S academic leaders. Private foundations make grants designation of an organization whose income is to other tax-exempt organizations to carry out their not used for the benefit or private gain of stock- charitable purposes. Private foundations must holders, directors, or any other persons with an make charitable expenditures of approximately 5% interest in the company. A nonprofit organization’s of the market value of their assets each year. income must be used solely to support its opera- Although exempt from federal income tax, private tions and stated purpose. foundations must pay a yearly excise tax of 1%Ð2% of their net investment income. The Ford Operating Foundation Foundation and the John D. and Catherine T. Also called private operating foundations, operat- MacArthur Foundation are two examples of well- ing foundations are private foundations that use known “independent” private foundations. the bulk of their income to provide charitable services or to run charitable programs of their Intellectual Capital own. They make few, if any, grants to outside Intellectual material—knowledge, information, organizations. To qualify as an operating founda- intellectual property, experience—that can be put tion, specific rules, in addition to the applicable
37 GLOSSARY OF TERMS
rules for private foundations, must be followed. Pledge The Carnegie Endowment for International Peace A promise to make future contributions to an and the Getty Trust are examples of operating organization. For example, some donors make foundations. multiyear pledges promising to grant a specific amount of money each year. Operating Support A contribution given to cover an organization’s Private Foundation day-to-day, ongoing expenses, such as salaries, A nongovernmental, nonprofit organization with utilities or office supplies. funds (usually from a single source, such as an individual, family or corporation) and program Parity managed by its own trustees or directors, estab- Equality, as in amount, status, or value. Parity in lished to maintain or aid social, educational, philanthropy is the equal participation by spouses religious or other charitable activities serving the or other family members in the allocation of common welfare, primarily through grant-making. charitable dollars and in receiving the satisfaction U.S. private foundations are tax-exempt under and recognition of their contributions. Section 501(c)(3) of the Internal Revenue Code and are classified by the IRS as a private founda- Passion tion as defined in the code. Boundless enthusiasm; deep and positive emotion; fervent expression of hope; belief in the essential Professional Advisor connection of individual and community; and love Individuals who assist in planning and executing of humanity. Passion, like altruism, is essential to charitable giving through providing information on the action of giving and the purpose of giving options according to one’s specific financial philanthropy. situation. Types of professional advisors include: attorneys, accountants, estate planners, financial Payout Requirement planners, stockbrokers, insurance brokers, planned The minimum amount that a private foundation is giving officers, philanthropy consultants. required to expend for charitable purposes (includes grants and necessary and reasonable Public Charity A PLAN OF ONE'S OWN AOF ONE'S PLAN administrative expenses). In general, a private A nonprofit organization that is exempt from foundation must pay out annually approximately federal income tax under Section 501(c)(3) of the 5% of the average market value of its assets. Internal Revenue Code and that receives its finan- cial support from a broad segment of the general Philanthropist public. Religious, educational and medical institu- A person who loves humanity, is committed deeply tions are deemed to be public charities. Other to making society a better place, and who believes organizations exempt under Section 501(c)(3) that each individual, each dollar, and each action must pass a public support test (See Public makes a difference. Support Test) to be considered public charities, or
A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S Philanthropy must be formed to benefit an organization that is a public charity (See Supporting Organizations). Philanthropy is defined in different ways. The Charitable organizations that are not public origin of the word philanthropy is Greek and charities are private foundations and are subject to means love for mankind. Today, philanthropy more stringent regulatory and reporting require- includes the concept of voluntary giving by an ments (See Private Foundations). individual or group to promote the common good. Philanthropy also commonly refers to grants of Public Foundation money given by foundations to nonprofit organiza- Public foundations are nonprofit organizations that tions. Philanthropy addresses the contribution of receive at least one-third of their income from the an individual or group to other organizations that general public. Public foundations may make in turn work for the causes of poverty or social grants or engage in charitable activities. The IRS problems, improving the quality of life for all recognizes public foundations, along with commu- citizens. Philanthropic giving supports a variety of nity foundations, as public charities. Religious, activities, including research, health, education, educational and medical institutions are deemed to arts and culture, as well as alleviating poverty. be public charities.
38 GLOSSARY OF TERMS
Restricted Funds Technical Assistance Assets or income that is restricted in its use, in the Operational or management assistance given to a types of organizations that may receive grants nonprofit organization. It can include fundraising from it or in the procedures used to make grants assistance, budgeting and financial planning, from such funds. program planning, legal advice, marketing and other aids to management. Assistance may be Seed Money offered directly by a foundation or corporate staff A grant or contribution used to start a new project member or in the form of a grant to pay for the or organization. services of an outside consultant. (See In-Kind Contribution) Social Capital Those stocks of social trust, norms and networks Tithing that people can draw upon to solve common A belief, found in many faiths, of giving 10%— problems. the first and best part—back to the place of worship. Social Investing Also referred to as ethical investing and socially Trust responsible investing, this is the practice of A legal device used to set aside money or property aligning a foundation’s investment policies with its of one person for the benefit of one or more mission. This may include making program-related persons or organizations. investments and refraining from investing in corporations with products or policies inconsistent Trustee with the foundation’s values. The person(s) or institutions responsible for the administration of a trust. Strategic Giving Engaging in philanthropy in a strategic manner to Unrestricted Funds make a major philanthropic impact through Normally found at community foundations, an making better choices surrounding how much one unrestricted fund is one that is not specifically spends, invests and gives back to society. designated to particular uses by the donor, or for which restrictions have expired or been removed. OWN AOF ONE'S PLAN Supporting Organization A supporting organization is a charity that is not Venture Philanthropy required to meet the public support test because it An approach to philanthropy that borrows some of supports a public charity. To be a supporting the best practices of the venture capital world to organization, a charity must meet one of three invest deeply in nonprofits to build their capacity complex legal tests that assure, at a minimum, that effectively. Venture philanthropists value their the organization being supported has some influ- donor dollars in terms of the social return of ence over the actions of the supporting organiza- investment. tion. Although a supporting organization may be A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S formed to benefit any type of public charity, the Volunteerism use of this form is particularly common in connec- Performing an act of kindness, freely giving of tion with community foundations. Supporting your talent, time, and effort for the simple organizations are distinguishable from donor- fulfillment of community expectations. advised funds because they are distinct legal Women’s Giving entities. Considered by some to be the next frontier of the Tax-Exempt Organizations women’s movement, women’s giving builds on Organizations that do not have to pay state and/or the tradition of volunteerism and is empowered federal income taxes. Organizations other than with women’s financial resources. churches seeking recognition of their status as exempt under Section 501(c)(3) of the Internal Revenue Code must apply to the Internal Revenue Service. Charities may also be exempt from state income, sales and local property tax.
39 BIBLIOGRAPHY AND ACKNOWLEDGMENTS
Gary, Tracy and Kohner, Melissa, Inspired Philanthropy—Creating a THIS PUBLICATION IS A PROJECT OF NEW VENTURES Giving Plan. Chardon Press, Berkeley, CA 1998. IN PHILANTHROPY, A NATIONAL INITIATIVE OF THE Kaminski, Andrea, “No Longer Invisible: The Emerging Role of Women FORUM OF REGIONAL ASSOCIATIONS OF GRANT- as Philanthropist.” Connections (The Association of Professional MAKERS, AND PARTNERS AROUND THE COUNTRY, Researchers for Advancement). Spring 2001. INCLUDING: THE BALTIMORE GIVING PROJECT, GIVING NEW ENGLAND, GIVING NORTHERN CALIFORNIA, Lawrence, S., et al. Foundation Yearbook: Facts and Figures on Private LOUISIANA PHILANTHROPY INITIATIVE, SOUTH- and Community Foundations. New York: The Foundation Center. FLORIDA PROMOTION OF PHILANTHROPY, NORTH- “Leaders in Business and Community: The Philanthropic Contributions WEST GIVING PROJECT–PORTLAND, GIVING GREATER of Women and Men Business Owners.” Center for Women’s Business CHICAGO, WASHINGTON GRANTMAKERS, AND THE Research (formerly National Foundation for Women Business Owners), WOMEN’S PHILANTHROPY INSTITUTE. November 2000.
“Minnesota Toolkit for Giving—Fulfilling Your Life’s Passions and Goals,” Minnesota Council on Foundations. www.minnesotagiving.org Specific thanks to Buffy Beaudoin-Schwartz, Siobhán “Philanthropy Among Business Women of Achievement: A Summary of O’Riordan, and Elizabeth Miller for their invaluable Key Findings.” Center for Women’s Business Research (formerly National Foundation for Women Business Owners). November 1999. feedback throughout the development of this publication, and to the Minnesota Council on “Report Reveals Significantly Higher Forecasts for Upcoming U.S. Foundations for providing valuable information. Wealth Transfer: Boston College Researchers Project Range of $41Ð$136 Trillion in First New Wealth-Transfer Estimates Since 1990.” Boston College Social Welfare Research Institute. October 20, 1999. Many thanks for the special contributions to the field by the following scholars and colleagues whose work Shaw-Hardy, Sondra. Creating a Women’s Giving Circle. Women’s Philanthropy Institute. 2000. informed the writing of this publication: Joan Fisher, Tracy Gary, John Havens, Melissa Kohner, Andrea Shaw-Hardy, Sondra C. and Taylor, Martha A. Reinventing Fundraising: Realizing the Potential of Women’s Philanthropy. Jossey-Bass Kaminski, Paul Schervish, Sondra Shaw-Hardy, Cindy Publishers. 1995. Sterling, Martha Taylor, Abbie von Schlegell; and to the A PLAN OF ONE'S OWN AOF ONE'S PLAN following organizations for the research information “She Said: A Study of Affluent Women and Personal Finances.” Deloitte & Touche. 1998. found in this publication: the Center for Women’s Business Research, Resourceful Women, National Sterling, Cindy. “New Research Finds Gender Differences in Planned Giving: Parts One and Two.” Women’s Philanthropy Institute News Center for Family Philanthropy, and Deloitte & Touche. (Women’s Philanthropy Institute). March 2001, June 2001. Warm appreciation is extended to the Council on So You Want To Give. Forum of Regional Associations of Grantmakers, New Ventures in Philanthropy, 1999. Foundations, the Women’s Funding Network, the Women’s Philanthropy Institute, Women & “The Donor Advisor: The Critical Role of the Advisor in Family A WOMAN'S GUIDE TO PHILANTHROPY TO GUIDE A WOMAN'S Philanthropy, the national funders of the New Ventures Philanthropy.” The National Center for Family Philanthropy. in Philanthropy project, and New Ventures grantees for von Schlegell, Abbie J. and Fisher, Joan M. Women as Donors, Women their ongoing efforts to promote and support the growth as Philanthropists. Number 2 (Winter 1993). Jossey-Bass Publishers. of women’s philanthropy.
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