Page 11 – Arkansas Community Foundation

Perhaps you established a donor advised fund at the Community Foundation years ago, or you set up a donor advised fund more recently. Or maybe you are considering establishing a donor advised fund at the Community Foundation this year to help you keep your giving more organized and involve your children and grandchildren in your philanthropic priorities.

Whatever the case in your particular situation, it’s a great idea to consider a few best practices for ensuring that your donor advised fund is making the biggest difference possible for the causes you care about. Life gets busy, the months fly by, and it’s tempting to put your donor advised fund on autopilot. But that would be a missed opportunity.

By now, you likely know that a donor advised fund at the Community Foundation offers the convenience of a one-stop-shop: You make tax-deductible contributions of cash (or, ideally, appreciated stock) to the fund, and then recommend grants to your favorite charities. Make sure you’re leveraging your donor advised fund to execute the full range of your charitable giving each year. You’ll find it so much easier to keep track over time of where you’re giving, and how much.

As the hub of your charitable giving, the Community Foundation certainly makes it easy for you to use your donor advised fund for your annual giving to charities. But that’s not all. As you work closely with the Community Foundation, you’re likely to discover even more ways our team can support your philanthropic activities:

–We can help you establish a designated or field-of-interest fund to complement your donor advised fund. A designated fund allows you to support a specific charity over the long term, while a field-of-interest fund focuses your support on a particular area of community need by leveraging the Community Foundation’s expertise. If you are over the age of 70½ and you own one or more IRAs, your designated fund or field-of-interest fund can receive Qualified Charitable Distributions up to $100,000 per year per spouse, bypassing your taxable income.

–We can work with you and your attorney to help you establish a bequest in your estate plan to support your favorite causes beyond your lifetime. Many fundholders at the Community Foundation name their donor advised funds, field-of-interest funds, designated funds, or even the Community Foundation itself, as beneficiaries in their wills and trusts, and especially as beneficiaries of IRAs and other qualified plans because doing so delivers significant tax benefits. What’s more, the Community Foundation offers opportunities for our legacy donors to get together and learn from each other as a group. If you’re not involved as a legacy donor already, please reach out and we’ll fill you in!

–We can help you and your family learn more about your favorite nonprofit organizations and the issues they are addressing so that you can become more informed and effective philanthropists in our community. The Community Foundation team’s unparalleled, deep knowledge of local issues and organizations is a real advantage for you and your family. When you better understand the needs of the community and how your favorite nonprofits are addressing those needs, you’ll be better equipped to structure your giving so that it makes a difference in measurable ways. You’ll enjoy your charitable giving a lot more, too.

We hope you’ll consider your donor advised fund–and your connection with the Community Foundation–as the hub of your philanthropy. The team at the Community Foundation is here to help you make the most of your donor advised fund and related strategies so that you’re not only putting your money to work to improve the quality of life in our community, but you’re also achieving financial and philanthropic goals for your overall charitable giving.

Many eyes are on the Charitable Act, which, if passed, would allow for deductible charitable contributions that exceed the standard deduction. The Charitable Act proposes to restore the pandemic-era “universal charitable deduction” and raise the cap from $300 for individuals ($600 for joint filers) to approximately $4,600 for individuals ($9,200 for joint filers).

Some advisors have been watching the regulations surrounding Type I and Type III supporting organizations. If you are dealing with these vehicles in your practice, be sure to stay up to date on the latest IRS regulations.

Finally, for your situational awareness as you advise clients who are pet owners, no amount of pet cuteness on Instagram will resolve the nationwide overcrowding at animal shelters. Dog and cat populations are up sharply from the pandemic due to owner-adopters returning to in-office work, inflationary costs for food and veterinary care, and owners seeking new forms of companionship. For a client who is passionate about this issue–or any issue–be sure to encourage your client to learn more about establishing a designated fund or field-of-interest fund at the Community Foundation to support highly targeted areas of relief, and, for those clients who are over 70½, serve as recipients of Qualified Charitable Distributions from IRAs.

As an advisor, you often talk with your clients about life insurance–how much is enough and which policies are best suited for a client’s particular situation. As you counsel your clients about risk management and the role of life insurance in their estate plans, don’t forget that life insurance can be an effective charitable giving tool in some situations.

Many advisors overlook the ease of naming a charity as the beneficiary of a life insurance policy. Certainly, qualified plans and IRAs are a more tax-effective vehicle to leave to a charity via a beneficiary designation, but some clients might want to do even more than that. For instance, “second-to-die” life insurance policies are a common hedge or shield against anticipated estate taxes. These policies may become more popular as the estate tax exemption drops back down at the end of 2025.

Some clients may not be fully aware of how important beneficiary designations really are. Of course, many policyholders will first want to provide for family members in either specified dollar amounts or percentages. What some clients may not realize is that they can also designate insurance proceeds to support the causes they care about, whether by naming a charity directly or naming a fund at the Community Foundation to carry out their charitable wishes.

Increasing the coverage under an existing policy may present an additional charitable giving opportunity for some clients. Because policy premiums generally do not rise proportionately to benefit amounts, expanding the benefits can be cost efficient. For example, if a client would like each of four family-member beneficiaries to receive $250,000 from a million-dollar life insurance policy, adding $250,000 of benefit will typically not increase the premium by 25%. In fact, the benefit-to-premium ratio may improve. In a case like this, the client can name the four family-member beneficiaries and the charity to each receive ⅕ of the policy benefits. Depending on the client’s overall financial and estate planning picture, a technique like this might truly deliver bang for the buck.

And although deploying life insurance as a charitable planning technique may not be a fit for every client, it’s certainly worth considering in edge cases. Indeed, the global market for term insurance is growing—from $850 billion in 2021 to an expected $1.3 trillion by 2028. Many people buy term insurance with its relatively low fixed-rate premiums for 20 – 30 years as a hedge for potentially lost income during high-expense times in life, such as children’s college years, or to pay off a mortgage. But if those years pass uneventfully (fingers crossed!), and amid an improved personal financial position, it’s an opportune time to reassess and even continue the policy.

Past term insurance policy premiums can then be viewed as sunk or unrecoverable costs, and future premiums can be seen as a relatively moderate “investment” relative to the benefit. Of course, all of your clients want to outlive their policies. But as long as a policy is in effect, the policy offers many potential opportunities, including for charitable giving. Reach out to the Community Foundation to explore this further. We’d love to talk!

Year-end giving makes up a significant portion of total revenue for most charitable organizations. Research even shows that a whopping 25% of online giving occurs in December! What this means is that there’s a pretty good chance your clients are already considering end-of-year gifts to support causes they care about, are being asked by at least one nonprofit for an end-of-year gift, or both. That’s why it’s important for you to talk with clients well in advance of the year-end giving rush.

Here are six tips to help jumpstart your client conversations over the next few weeks. Please give us a call if you’d like to dive deeper! We are here for you.

Check in on goals. By discussing your clients’ overall charitable goals, you can ascertain which causes your clients are passionate about and why they care, how much they’d like to contribute in the short term and over time, the impact they’d like to see, and whether they intend to provide for their favorite charities in their estate plan. Against this backdrop, year-end giving strategies become easier to develop.

Explore a wide variety of fund types. Donor-advised funds are very popular vehicles, and community foundations are ideal providers of donor-advised funds for clients who want to keep their philanthropy local and benefit from the foundation’s focus, expertise, and mission-driven 501(c)(3) status. But donor-advised funds are not the only types of funds that the Community Foundation offers. Your clients can also establish field-of-interest funds, designated funds, unrestricted funds, or scholarship funds. Our team will help you evaluate what type of fund (or funds) is best suited for a particular client. For example, a client considering a Qualified Charitable Distribution from an IRA is a great candidate to establish a field-of-interest or designated fund.

Understand the Community Foundation’s donor-advised fund advantages. As you work with clients for whom a donor-advised fund is appropriate, be sure you understand why the Community Foundation is such a great fit for so many philanthropic individuals and families. Indeed, the Community Foundation is the truly local option for donor-advised funds. Large, national providers associated with financial institutions also offer donor-advised funds, but those vehicles are typically not a fit for clients who care about our community and want to support the region’s nonprofits in a meaningful way.

Know how a donor-advised fund works. It’s easy for a client to establish a donor-advised fund at the Community Foundation. After completing simple paperwork, your client will make a tax-deductible gift (of cash or, ideally, stock or other highly-appreciated asset) to the Community Foundation to fund the donor-advised fund. The funds can then be granted out to eligible charities at the client’s recommendation over time. Many clients find that a donor-advised fund operates almost identically to a private foundation, but without the sometimes hefty administrative overhead costs and burdensome restrictions. A donor-advised fund can be named after the client (e.g., Smith Family Fund) or named to reflect the purpose of the client’s giving (e.g., Fund for the Future of Anytown), or even structured to enable the client to give anonymously.

Supercharge both tax benefits and giving. Giving through a donor-advised fund at the Community Foundation may allow a client to tap a helpful technique called “bunching,” which maximizes the client’s itemized deductions for the tax year, while still ensuring that the client can give strategically over the next few years to achieve charitable goals and support favorite organizations when they need it the most.

Don’t default to cash. Many clients naturally think of cash as the source for their year-end giving. That’s a missed opportunity! Most of the time, highly-appreciated marketable securities (or other highly-appreciated, long-term assets) are a better gift to a client’s fund at the Community Foundation or other public charity because the client is eligible for a tax deduction at the assets’ fair market value, and the proceeds from the sale of the assets will flow into the client’s fund at the Community Foundation free from capital gains tax. That means more funds are available to support the client’s favorite causes.

Philanthropy is an important topic of conversation with your clients, not just at the end of the year, but always. Our team is here to help you ensure that your clients can meet their financial and charitable goals through year-end giving and beyond.

Wynne, Ark. (Oct. 12, 2023) – Cross County Community Foundation, an affiliate of Arkansas Community Foundation, announced more than $371,000 in tornado recovery grants to 22 organizations serving Wynne. Grants were selected by a committee of local leaders who live and work in the affected communities and representatives of the Community Foundation.

“Our community was hit so hard by the storms in March and people are still working to recover. It’s a an honor to support nonprofits helping people rebuild their lives,” said Keeli Smith, executive director of the Cross County affiliate. “The generosity of the Wynne community and surrounding areas has been astounding.”

A full list of tornado recovery grantees can be found at www.arcf.org/tornadogrants.

This year, Cross County Community Foundation is also celebrating its 20^th anniversary. To mark this milestone, the local board is hosting a grant reception at 6:00 p.m. on Oct. 17 at the Delta Gin Event center with donors, community leaders and grantees attending. Local media is invited to attend.

In addition to tornado recovery grants, the Cross County affiliate made more than $30,000 in Giving Tree grants to 14 local nonprofits.

“Our Giving Tree program is our flagship grantmaking initiative. It represents our commitment to and the importance of local decision making to meet local needs,” said Stacie Schlenker, chair of Cross County Community Foundation’s board. “Funding for our Giving Tree grants comes from local individuals and families who want to improve this community. These endowments provide a permanent source of funding for Cross County charities.”

A full list of Giving Tree grantees can be found at www.arcf.org/crosscounty

Cross County Community Foundation makes grants through the Giving Tree program annually. Contact Keeli Smith at crosscounty@arcf.org to learn more about Cross County Community Foundation and their grant opportunities. Or visit www.arcf.org/crosscounty for more information.

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Arkansas Community Foundation, a statewide nonprofit organization, provides resources, insight and inspiration to build better Arkansas communities – communities where our kids will want to raise their kids. The Community Foundation is the largest grantmaker in the state in the number of grants made each year. Since 1976, the Foundation has provided more than $393 million to nonprofits. The Foundation staff works directly with donors, professional advisors and nonprofits to help strengthen Arkansas communities through strategic philanthropy and focusing on local needs. Its assets rank among the top 60 out of more than 800 community foundations in the United States. Serving statewide and local initiatives, the Community Foundation helps connect those who want to give to causes they care about. Contributions to Arkansas Community Foundation, its funds and any of its 29 affiliates are fully tax deductible.

Philanthropy means “love of humanity”—and, according to some, “philanthropy” includes acts that benefit both the giver and the receiver. This is surprising to some people who have been taught “it’s better to give than to receive.”

Somehow we have popularized the idea that giving should “hurt.” But that is not what the research says. Consider just a few examples:

–Research on the connection between volunteering and hypertension revealed that four hours of volunteering a week reduced the risk of high blood pressure–by 40%–in adults over 50.

–Another study indicates that giving reduces cortisol levels.

–Yet another study found a link between unselfishness and a lower risk of early death because “helping others” reduces stress-related mortality.

–Research has linked doing something good for someone else to an increase in endorphins.

–An altruistic attitude in the workplace makes you more productive and less likely to quit.

–Doing good and being grateful helps you sleep better at night.

–People who do just one good thing a week for someone else actually become happier over time.

When people were asked to reflect about all the ways they do good (giving to charity, volunteering, serving on boards, donating canned goods, purchasing products that support a cause, celebrating at community events, sharing with others, and so on), 92% reported that they felt better about themselves.

Even just thinking about what you’ve given others–and not only just being grateful for what you’ve received–is a huge motivator to do good things for others, over and over again.

The “do good feel good” benefits of philanthropy is just one of the many reasons that so many individuals and families work with the Community Foundation. If you’ve already established a donor advised or other type of fund with the Community Foundation, we look forward to continuing to help you fulfill your charitable wishes to improve the lives of others. If you’ve not yet established a fund at the Community Foundation, we look forward to working with you to make a difference in the causes you care about.

You are not alone if you begin to feel a little anxious when October rolls around. Many people experience year-end stress, whether because of looming deadlines at work, tax-related estate planning cut-off dates, anticipating a busy holiday season of travel and social engagements, or simply the realization that another year is coming to a close and there’s not a lot of time left to check off items on the 2023 punch list.

To top it all off, many families do a lot of their charitable giving at year end, too. But that’s one area that does not need to be stressful. Your giving can be more easily accomplished than sending invitations, herding family members, guessing colors or sizes, and remembering who to include–or not!

Here are three tips for alleviating fourth-quarter stress and still be able to hit your charitable goals for 2023.

–Using your donor advised fund at the Community Foundation makes giving very convenient. Through the Foundation’s online portal, you can easily view a list of all of the organizations you’ve supported so far this year, make note of the ones you missed or want to add, and then finish the annual task.

–Your late-year timing could actually be useful for the organizations you care about, given the pronounced need for support during this time of year. Whether an organization is reaching to meet its year-end goals or providing additional food and utility bill relief during the cold winter months, year end gifts are critical. According to National Giving Month, 31% of charitable giving occurs in December; 12% of giving typically occurs between December 29 and 31; and 28% of nonprofits raise as much as 50% of their funding in December.

–Charitable needs are heightened during the fourth quarter because it is especially stressful for people experiencing financial challenges. For 52% of respondents surveyed in a 2023 study, money was the most cited factor that negatively affects their mental health, a level 25% higher than a year ago. The organizations supporting these people are in high gear during the fourth quarter and holiday season.

–By the end of the year, you will likely have a better idea of your financial situation, ideal target amount for charitable tax deductions, and the performance of stock in your portfolio. This will allow you to make gifts to your donor advised fund of highly-appreciated stock, avoid capital gains, and reduce your taxable estate. And, of course, the proceeds of that stock will hit your donor advised fund tax free, so the full amount of the sale price is available to support your charitable giving priorities.

Completing your 2023 charitable giving can reinforce philanthropy’s win-win value proposition: You can check a task off your list by supporting causes and organizations that are important to you and receive key tax benefits, and those in need will appreciate your generosity while feeling a greater sense of the season’s spirit.

At Arkansas Community Foundation, we regularly talk with retirement-age donors and fundholders about the tax benefits of directing Qualified Charitable Distributions to a designated fund, and/or leaving bequests of IRAs to a donor advised fund. But getting involved in philanthropy can be so much more than that. This is particularly relevant as some retirees consider returning to work and contemplate what that means for their charitable giving and volunteering plans.

You’ve likely heard the statistic that 10,000 people in the United States are turning 65 every day. And while 65 may be the “traditional” retirement age in this country, the milestone appears to be anything but traditional nowadays. While Covid-19 did not impact retirement ages as much as some might have predicted, many of those who did retire actually now regret it. While many retirees are seeking work for financial reasons, two of the top six reasons to go back to work involve boredom or loneliness.

For people who’ve reached a theoretical retirement age, working or returning to work provides many opportunities that tie into philanthropy. For example:

–You can still contribute to your IRAs (which many people do not realize), and if there’s an employer-sponsored 401(k) plan, all the better.

–You can use your extra income to fund your donor advised fund at the Community Foundation, making you eligible for an income tax deduction as well as removing assets from your taxable estate.

By Heather Larkin, President and CEO of Arkansas Community Foundation

I am so proud of the Women’s Foundation of Arkansas “Top 100 Women of Impact” recognition at this year’s Power of the Purse event. I cannot believe that I have been around long enough to say: “I was there from the beginning!” It has allowed me to reflect on the role that Arkansas Community Foundation played in the inception of such an important organization for Arkansas.

Twenty-five years ago seems like yesterday when in 1998, Olivia Farrell and Arkansas Business waged a campaign to recognize Arkansas women for their abilities, their career acumen and their contributions to our state. Arkansas Business’ “Top 100 Women in Arkansas” publication featured women business leaders in the various sectors of the economy. That publication helped start the conversation: Arkansas needed to do more to empower and improve the lives of women and girls.

In 1998, there was a small group of extraordinary women working to figure it out. Using the next Arkansas Business Top 100 Women luncheon, conversations were facilitated among the attendees on how to make a difference to improve the lives of women and girls. Each table reported out and the causes became clear: Arkansas needed more women in careers that required a background in mathematics, sciences, computer technology, and we needed to encourage female students to go into those fields. At the same time, almost every table suggested that philanthropy could make a difference in these areas, too. Olivia Farrell and Pat Lile were called on to develop a path forward.

The two women got to work, and the Community Foundation hit the road. Pat Lile, Mary Dillard, Karen Potts and I went to Memphis and Kansas City. We met with the leadership of the two respective community foundations who’d begun their own women’s foundations. A glimmer in our eyes began to take shape.

Joining forces with the Community Foundation’s Chair, Mary Gay Shipley and several other women, a steering committee was established to help start the Women’s Foundation of Arkansas and create the first Power of the Purse event.

The key challenge was to inspire at least 100 women to give $1000. Invitations went out all over the state, to the former “Top 100” women leaders, along with philanthropists, educators, community leaders and more. By the end of the year, the money had been raised and the “Founders” were established. All the donations were placed at Arkansas Community Foundation in a fund designated exclusively for the Women’s Foundation of Arkansas.

For four years, the Community Foundation provided fund management and accounting, staffing for committee meetings, mailings, public relations support, the annual Power of the Purse luncheon and the Girls of Promise conference until the Women’s Foundation of Arkansas became its own 501(c)(3) nonprofit. Those were heady days for a young woman like me starting out in the world of philanthropy, and as the saying goes, the rest is history. Here we are 25 years later celebrating the “Top 100 Women of Impact” and building on the legacy of those original leaders who paved the way.

I am proud that the Community Foundation was there in the beginning and am incredibly inspired by the amazing growth of the Women’s Foundation of Arkansas as they keep blazing a trail for women and girls in our state.

When the March 31 tornado ripped through Wynne in March, Cross Bank employees there sprang into action. “I’ve never seen so many people come together to help someone they didn’t know,” said David Dowd, president and CEO of Cross Bank. “Volunteers from all over hit the ground to do whatever it took — from debris removal to boarding up houses. Our staff from nearby branches came too, even helping through the weekend. We gave out more than 2,000 meals to volunteers, linemen, first responders, and those displaced by the tornado. Our staff didn’t have to do all this, but they did. It was amazing.”

Cross Bank has been helping Wynne by making grants from their fund with Arkansas Community Foundation since 2015, but the bank has been headquartered in Wynne since 1891. “Banks don’t have that longevity without genuinely caring about the communities where they have branches,” he said. “Keeli Smith, the local director for Cross County Community Foundation has been great to work with. She taught us about the power of matching gifts,” said Dowd. “Through matches, we’ve been able to maximize our impact with other donations from staff and the community. It allows us to give so much more than a bank’s budget would normally allow. That’s how we were able to almost double our donation of $25,000 for tornado recovery.

“You only have to drive around to be reminded of how hard we were hit. For Wynne to fully recover, it will take people continuing to work together and help,” he said. “Some folks have moved away already because they couldn’t rebuild or couldn’t find a place to stay.”

With a population of about 8,300, Wynne can’t afford to lose residents.

“We don’t want people to leave,” said Dowd. “Now we see issues emerging. Some landlords aren’t rebuilding; affordable housing is a problem; people are under- or uninsured, and costs are high. It might be three to four years before the high school is completely rebuilt, and the town is whole again.”

Cross Bank is committed to being part of the recovery. “Our staff don’t volunteer because they have to, they do it because they care,” he said. “Through our fund, we will continue to give to this community. Wynne is resilient. And I believe we can bounce back and be stronger than before.”