Managing Foundations And Charitable Trusts: Essential Knowledge, Tools, And Techniques For Donors And Advisors

"Establishing a private foundation is not only of benefit to tax and estate planning, but is a powerful way to help your community and build a permanent legacy. Managing Foundations and Charitable Trusts is an essential guide to setting up a private foundation, whether you are looking to establish one or provide financial advice to those who are. Already nearly five percent of high-net-worth individuals have private foundations, and interest in setting up charitable organizations is on the rise. This newedition looks at the latest issues such as: Avoiding and detecting fraud The growth of donor advised funds Charitable planning in the face of tax rate uncertainty What to do when private foundations get too small This straightforward and authoritative guide explains the reasons for establishing a foundation, the steps for setting one up, and tips for avoiding common pitfalls. Author Roger Silk and his firm are well known in the adviser community for providing professional management to foundations, and he covers the ins and outs of private foundations from the perspective of both philanthropists and the advisers who work with them"--

Roger D. Silk, CEO of Sterling Foundation Management, is widely recognized as a leading expert in the field of private foundations and charitable trusts. As a founder and board member of several nonprofit organizations, former bond trader at the World Bank, and Stanford-trained PhD economist, Dr. Silk possesses a unique blend of experience, practical knowledge, and theoretical insight that has enabled him to help build Sterling Foundation Management into the market leader that it is today.

James W. Lintott is Chairman of Sterling Foundation Management and a board member of Dean and Deluca and several private investment companies. He has over two decades of experience working with wealthy individuals and families. In addition, Mr. Lintott serves on the boards of a number of nationally recognized charities, including the Freer/Sackler Galleries of the Smithsonian Institution, the U.S.-Japan Foundation, and Best Buddies International.

Preface.

Acknowledgments.

Chapter One: The Basics of Charitable Giving.

Direct Gifts.

Supporting Organizations.

Donor-Advised Funds.

Private Foundations.

Conclusion.

Chapter Two: Tax Incentives and Limitations.

Four Powerful Tax Incentives.

Details on Tax Deduction Limits.

Finding the Best Giving Strategy.

The $1.6 Trillion Loss.

Estate Taxes.

Conclusion.

Chapter Three: Charitable Planning and Taxes.

Giving Approach.

Tax Planning Complexity.

Guidelines for Analytical Expenditure; Or, is Analysis Worth it?

What to Do When Tax Rates are Uncertain.

Timing of Gain Realization.

Charitable Remainder Trusts and Deferral.

Conclusion.

Chapter Four: Planning with Charitable Lead Trusts and Charitable Remainder Trusts.

Charitable Lead Trusts.

Charitable Remainder Trusts.

Flexibility and Irrevocability.

Chapter Five: Foundations and Children.

Affluenza.

Bringing Families Closer.

Transmitting Values.

Providing Valuable Skills.

Conclusion.

Chapter Six: Benefits of Giving While You’re Still Alive.

Personal Satisfaction.

Create a Legacy.

The Problem with Waiting.

From the Grave: Control—But Not Too Much.

What About Too Little Direction?

Who Gets Control?

Conclusion.

Chapter Seven: Effective Foundations: The Business of Philanthropy.

The Mission Revisited.

Getting Started.

Know Your Charities.

Governing for Effectiveness.

Approaches to Grant Making.

You Get What You Negotiate.

Stand on the Shoulders of Others.

Outside Experts Can Make the Difference.

Types of Support: Periodic versus Endowment, General versus Program.

Is Measurement Worthwhile?

Establishing Measures.

Provide Feedback.

Give Wisdom in Addition to Wealth.

Give Strategically.

Exercise of Leverage.

Make Foreign Donations Deductible.

Use Public Relations Effectively.

Create Financial Leverage through Tax-Exempt Financing.

Let Your Foundation Do the “Dirty” Work.

Conclusion.

Chapter Eight: The Road to Hell Or, Beware of Unintended Consequences.

Food Aid.

Private Charity and Unintended Consequences.

Fungible Money and Inadvertent Funding of Terrorism.

How to Give Restricted Grants.

Poverty – Again.

Chapter Nine: Developing an Appropriate Foundation Investment Policy.

What to Include in an Investment Policy.

Conclusion.

Chapter Ten: Developing and Implementing a Foundation Asset Allocation Policy.

Differences between Corporation and Foundation Investment Plans.

The Seven Deadly Sins of Foundation Asset Allocation.

Developing a Good Asset Allocation Policy.

Should an Asset Allocation Policy Change over Time?

Capturing the Rebalancing Bonus.

Active Management versus Indexing.

Who Is Responsible for the Asset Allocation Policy?

Conclusion.

Chapter Eleven: Main Themes in Legal Compliance.

Some Compliance Errors May Seem Funny, But They're Not.

A Fail-Safe System.

Required Activities.

Prohibited Activities.

Conclusion.

Chapter Twelve: Fraud, Inflation, and Market Risk.

Stanford Case.

Enron.

Baptist Foundation of Arizona Case.

The Bre-X Fraud.

Allied Capital.

Fraudulent, or Not? You Decide.

What is XYZ?

How Will Social Security End?

Promised Benefits.

Real Terms.

Inflation – A Brief History.

Inflation Indexing.

Foundations and Endowments are Highly Exposed to Inflation.

Avoiding Fraud.

Chapter Thirteen: Other Planned Giving Vehicles.

Charitable Gift Annuity.

Gift Annuities versus Regular Annuities.

Partial Exclusion of Annuity Payments from Income Tax.

Bargain Sale.

Charitable Gift Annuity versus CRT.

Remainder Gifts with Retained Life Estate.

Pooled Income Funds.

Chapter Fourteen: Donor Advised Funds.

History.

Guidelines – Highlights.

Fees and Costs.

Chapter Fifteen: Building Assets with Charitable Planning.

Professionally Managed, Turnkey Private Foundations.

Foundation Manager's Role.

Conclusion.

Chapter Sixteen: How to Select a Foundation Manager.

Choosing a Full-Service Manager.

Conclusion.

Chapter Seventeen: What Can You Donate to Charity?

Publicly Traded Securities.

Nonpublicly Traded Business Interests.

Tangible Personal Property.

Intangible Personal Property.

Qualified Retirement Plans.

Real Estate.

Conclusion.

Chapter Eighteen: When the Shoe No Longer Fits What to do if you get tired of your private foundation, donor advised fund, charitable remainder trust, or charitable gift annuity.

Private Foundations.

Charitable Remainder Trusts.

Getting Rid of Other Charitable Vehicles.

Conclusion.

Selected Resources.

About the Authors.

Index.