Page 16 – Arkansas Community Foundation

Most attorneys, accountants and financial advisors are well-aware of donor advised funds and the reasons behind their popularity. Especially when established at the Community Foundation, a donor advised fund is an excellent way for your clients to organize their charitable giving and get even more connected to the causes they care about.

Enter the Qualified Charitable Distribution

Your clients can give nearly any type of asset to a donor advised fund at the Community Foundation. A notable exception, though, is the Qualified Charitable Distribution (QCD.) A QCD allows a taxpayer 70 ½ or older to make a direct transfer of up to $100,000 annually from an IRA to a qualifying charity. A donor advised fund is not considered to be a qualifying charity. Although donor advised funds cannot accept QCDs, the Community Foundation offers other types of funds that can accept QCDs. For example, designated funds and field-of-interest funds held at the Community Foundation are ideal recipients of QCD transfers. These fund types are often overlooked, despite the high value they can deliver to your client and to the community.

What is a field-of-interest fund?

The Council on Foundations defines a “field of interest fund” as “A fund held by a community foundation that is used for a specific charitable purpose such as education or health research.” Perhaps your client is passionate about rare-disease solutions, food insecurity or access to art. Your client decides on a name for the fund (can be the family name, cause-related or even nondescript) and then the knowledgeable team at the Community Foundation distributes grants from the field-of-interest fund in a way that is aligned with your client’s values and charitable wishes outlined in the fund agreement.

What is a designated fund?

Designated funds are defined as, “A type of restricted fund in which the fund beneficiaries are specified by the grantors.” These are a good choice for a client who knows they want to support a particular charity or charities for multiple years. The client names the fund and the Community Foundation fulfills the distributions. Made over time, these funds can help the charity or charities’ cash flow planning. Distributions are aligned with your client’s wishes set forth in the original fund document.

QCD reminders

For the client aged 70 ½ through 72, a QCD removes funds from an IRA before the client reaches the age-73 threshold for Required Minimum Distributions (RMDs.) This can lessen the eventual income tax hit that accompanies RMDs. And for RMD-applicable clients, the QCD counts toward their RMD. In both cases, the QCD transfers do not fall into the client’s taxable income. QCDs are even more popular now that the $100,000 cap will be indexed for inflation under the new laws. Also, under the new laws, a one-time, $50,000 distribution to a charitable remainder trust or charitable gift annuity is now permitted.

Little Rock, Ark. (Feb. 6, 2023) – Arkansas Black Hall of Fame Foundation, in partnership with Arkansas Community Foundation, is awarding grants to programs that benefit African American or underserved populations in Arkansas. Nonprofits with programs focusing on education, health and wellness, youth development, strengthening families and economic development are eligible to apply. Proposals will be accepted online now through April 1.

“We are especially grateful to our donors whose consistent support allows us to make grants to grassroots organizations throughout Arkansas. It is critically important that we continue to support organizations facing new challenges created by the pandemic,” said Charles Stewart, ABHOF Chair. “Typically, our grants range from $1,000 to $2,500, but may approach $5,000 in special circumstances. There are many nonprofits working tirelessly in communities throughout Arkansas to improve the quality of life for its citizens.”

Since 2004, ABHOF has granted more than $717,000 to nonprofits across the state. Projects funded through this grant program range from support for temporary emergency shelter for families temporarily displaced to support for the first Arkansas Racial Equity Summit at UCA.

“Our long-standing partnership with Arkansas Black Hall of Fame Foundation empowers local people working to find solutions to the needs of their underserved communities,” said Heather Larkin, president and CEO of the Community Foundation. “We’re honored to work with Arkansas Black Hall of Fame Foundation to provide a support system for Arkansas.”

Funds from Arkansas Black Hall of Fame Foundation cannot be allocated for salary support or to support general operating budgets outside the specific proposal or project.

Priority consideration for grants:

Requests that show multiple sponsoring agencies/organizations.
Requests that include evidence of local financial support (including, but not limited to, in-kind support.)
Requests that demonstrate collaborative ventures among organizations within the community.
Requests that have promise for sustainability beyond the period of the grant.
Requests that show an innovative approach to community challenges.

All geographic sections of the state are eligible. Scholarship requests will not be considered. Only 501(c)(3) nonprofit organizations, hospitals, public schools and government agencies are eligible to apply now through April 1 atwww.arcf.org/ABHOF. Organizations that do not qualify for tax-exempt status are not eligible.

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Arkansas Black Hall of Fame Foundation aims to provide an environment in which a future generation of African American achievers with Arkansas roots will thrive and succeed. The Foundation honors the contributions of African Americans through its annual Black Hall of Fame induction ceremony and awards grants to support charitable endeavors in Black and other under-served communities throughout Arkansas. Learn more at www.arblackhalloffame.org.

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.

Little Rock, Ark. (Feb. 1, 2023) – Scholarships are now available for eligible Arkansas students through Arkansas Community Foundation.

The Community Foundation’s scholarships are for Arkansas students pursuing education at two- or four-year colleges or universities, vocational schools or technical training programs. Each scholarship has its own eligibility criteria. Some scholarships are designated for graduates of a particular high school or those who plan to attend a particular college. Others are based on extracurricular activities or intended college majors.

“Since 1976, the Community Foundation has partnered with individuals and organizations who want to support students in their pursuit of higher education,” said Heather Larkin, Community Foundation president and CEO. “These generous people provide the funding and determine the size and eligibility criteria of each scholarship, while we oversee the application and awarding process on their behalf.”

Scholarships with statewide eligibility include:

Abigail Robertson Scholarship, provides a scholarship for female students pursuing a business degree at a college or university in Pulaski County
Advancing Women in Transportation Scholarship, provides a scholarship to female students who plan to pursue a career in a transportation related field in Arkansas
Anne Pressly Scholarship, to memorialize the legacy of Anne Pressly and support a graduating high school senior woman who plans to pursue a career in Journalism
Arkansas Service Memorial Scholarship, for students who are children of Arkansans who lost their life in service in the state, nation or community
Barbara Mashburn Memorial Scholarship, provides a scholarship for a graduate of an Arkansas high school pursuing an education as a vocalist
East Student Scholarship, provides a scholarship to a graduating senior who attends any high school with an EAST program
Elizabeth G. Redman Republican Party of Arkansas Scholarship, for students who are members of or active in the Republican Party of Arkansas
Herchel and Melba A. Fildes Scholarship, provides a scholarship to students studying nursing and attending Harding University in Searcy, Arkansas or Arkansas State University in Beebe
Lillian McGillicuddy Republican Party of Arkansas Scholarship, for students who are members of the Arkansas Federation of Young Republicans or are active in the Republican Party of Arkansas
Marie and Bob Marshall Republican Party of Arkansas Scholarship, for students who are members of or active in the Republican Party of Arkansas
Merwin T. and Agnes Bowman Nursing Scholarship, for students seeking a Bachelor of Science in Nursing or equivalent degree from a qualified institution
Poultry Federation Scholarship, provides scholarships to students pursuing a degree related to the poultry industry and attending a school in the University of Arkansas system, Arkansas State University system, Arkansas Tech University or Southern Arkansas University
Robert P. Atkinson Hospital Leadership and Scholarship, provides a scholarship to students pursuing an advanced degree with an emphasis in healthcare and/or hospital administration
Ryan Mondy D.A.S.H. Memorial Scholarship, provides scholarships to graduating seniors whose lives have been affected by cancer

To apply, and for more information about these and other scholarships, visit www.arcf.org/apply/scholarships/.

Deadlines for scholarship applications differ and can be found on the application portal.

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If you’ve been tracking federal legislation, you’re likely aware that on December 29, 2022, President Biden signed a $1.65 trillion-dollar omnibus spending bill known as the Consolidated Appropriations Act of 2023 (“CAA”).

A component of this legislation, known as “SECURE 2.0,” includes many provisions that make it easier for people to build retirement savings.

Three of the new law’s provisions are particularly interesting to people who give to charities, especially related to a planning tool called the Qualified Charitable Distribution (QCD). Many individuals who are 70½ or older have already been taking advantage of the QCD. This technique allows a taxpayer to make an annual transfer of up to $100,000 from an IRA to a qualifying public charity (such as a designated fund, field-of-interest fund, scholarship fund, or unrestricted fund at the Community Foundation.) The taxpayer does not need to pay income tax on the distribution and, for taxpayers who must take RMDs from their retirement plans, the QCD counts toward that year’s RMD.

Here’s what’s new, thanks to SECURE 2.0:

More time to accumulate retirement assets

Under the new law, the required minimum distribution (RMD) age (previously 72) increased to 73 on January 1, 2023. RMDs are the IRS-mandated distributions from qualified retirement plans. The RMD age will further increase to 75 beginning on January 1, 2033. This provision is a boost to retirees’ financial plans and may mean more dollars available for charitable giving, especially in the form of a tax-savvy beneficiary designation of retirement plans to charity.

Note that the age for QCD eligibility is still 70½, and, still, donor-advised funds are not eligible recipients of a QCD.

“Legacy IRA” opportunity

SECURE 2.0 makes QCDs even more attractive because taxpayers may now make a one-time $50,000 QCD transfer to a charitable remainder trust (CRT) or other split-interest gift such as a charitable gift annuity (CGA). These components of the new law are called the “Legacy IRA” provisions.

Bigger QCDs

The annual per-taxpayer $100,000 QCD cap is now slated to be indexed for inflation, which will allow taxpayers to give even more from their IRAs directly to charity.

The team at the Community Foundation would be happy to talk with you about how the new laws can enhance your charitable giving plans. Reach out anytime!

As economic times get tough, more and more people are asking how they can make the biggest difference right in their own backyard. Often, the greatest needs really are right here at home.

Over the years, researchers have consistently validated the important emotional elements of giving to familiar and nearby organizations to foster the rewarding sense of connection that is such an important driver of repeat philanthropic behaviors. Today’s donors want to be able to actually see the results of charitable investments.

Here are three suggestions for anyone who wants to get started on a “give local” journey.

First, visit AspireArkansas.org to identify local needs in your community. Make a mental note of issues that raise your eyebrows or make you ask yourself “I hope someone is doing something about that.”

Second, with this issue in mind, run a few Google searches with the key words you’ve identified, along with the terms “nonprofit,” “charity,” and the name of your town or city. Sometimes these searches will illuminate organizations you might already be familiar with. Our online Arkansas Nonprofit Directory is another great tool and is free to use.

Third, reach out to the team at the Community Foundation. The Foundation’s mission is to improve the quality of life in our region, and that is possible through the work of nonprofit organizations and people like you who support them. The Community Foundation team will know which nonprofits are addressing the issues you’d like to learn more about and can provide advice about how your charitable dollar can make the greatest possible difference.

The Community Foundation is unparalleled in its ability to be flexible and responsive, providing outstanding, personal service designed around your needs while at the same time working closely with legal, tax, and wealth advisors to ensure that you are maximizing the financial elements of your charitable giving plan.

We look forward to working with you to make as big a difference as possible in the causes you love and make our community an even better place for everyone.

“I worked for three years in a classroom as a preschool teacher, and I was good. I could go in a classroom and run it like the back of my hand, but I didn’t have a degree,” said Elizabeth Coakley. Coakley, now the Better Beginnings Coordinator at C.B. King Memorial School in McGehee, is a former T.E.A.C.H. Scholar. “This program changed my life,” she said.

T.E.A.C.H. (Teacher Education and Compensation Helps) Early Childhood Scholarship Program is a licensed program of the Arkansas Early Childhood Association. A nationwide initiative, it creates access to higher education for teachers, directors and family child-care providers working in early childhood education.

“T.E.A.C.H. was designed to help those in the early childhood workforce to obtain a higher education degree,” said Paul Lazenby, executive director & T.E.A.C.H. state manager. “It’s unique because it provides more than just money for tuition and fees. The scholarship also includes a stipend for travel and books, along with a comprehensive counseling program.”

According to Lazenby, you can’t talk about education without talking about compensation.

“One of the most important aspects of the T.E.A.C.H. program is that it makes it possible for scholars to afford both the time and expense of going to school,” he said. “We work closely with employers so that scholarship recipients can remain employed fulltime and still earn a paycheck. And we provide a financial bonus once they meet their educational goals so that there is additional incentive to finish.”

As scholarship recipients, teachers must attend classes and successfully complete 9-15 semester hours toward a certificate, credential or degree in early childhood education during the contract year. Teachers are expected to contribute 5% of the cost of tuition and 5% of the cost of books each semester. At the end of the scholarship year, teachers must promise to continue to teach at their sponsoring center for another year in return for the bonus.

“Most people can complete an associate degree in about two years if they attend classes full time. Our students typically have to work full time, and 18 hours a week of classes in addition to their job isn’t possible. It usually takes them closer to three years to finish. But there is no time limit on when you have to complete the program,” said Lazenby. “If you can just take one class at a time, that’s what you do. We want this to be accessible to as many early childhood educators as possible”

The T.E.A.C.H. program is a stair-step process. For each hour of credit you earn, it counts toward the next level if you choose to go further. Teachers can earn a Child Development Associate [CDA] certificate through a 10-13 hour program, an associate degree that takes 60 hours, and some even complete a bachelor degree.

“I love being an early childhood teacher, and I love my job,” said Orlanda DeSaussure. She graduated with her CDA from ASU Beebe. “I am so thankful for the T.E.A.C.H scholarship and for their T.E.A.C.H team. I was so nervous about going back to college, but they were very patient and encouraging to me. They helped me with the financial support to finish my CDA, and it also gave me the confidence to know that I could do it.”

To learn more about the T.E.A.C.H. Program or to sponsor a student, visit arkansasearlychildhood.org/TEACH

January is a good time to start helping your clients plan for their annual giving. With the year-end flurry of donations still fresh in many clients’ minds, you may discover that clients will welcome your suggestion to make 2023 the year to get organized early, particularly as economic headwinds make planning especially important.

A conversation that benefits everyone

Among the many benefits of discussing charitable giving with your clients is that your clients will see you as an expert, especially when you have a close working relationship with the team at the Community Foundation. Your philanthropic clients want to learn how they can make a difference through their charitable activities, and they are expecting their advisors to be ready to help them structure and plan their giving. Indeed, for years, research has shown that a proactive advisor who offers options for incorporating philanthropy into financial and estate plans inspires client loyalty, even across client generations.

The Community Foundation advantage

Advisors frequently comment that they’re surprised to discover the many ways the Community Foundation can help their clients, especially compared with national donor-advised fund programs affiliated with brokerage houses or financial services firms.

Often the greatest needs are right here at home, and working with the Community Foundation is the very best option for ensuring that your clients are informed and impactful philanthropists.

The Community Foundation is unparalleled in its ability to be flexible and responsive, providing outstanding, personal service designed around your clients’ needs while always respecting your role as your client’s primary advisor.

Options for every client’s unique situation

Here are just a few of the ways we can work with you as you plan for 2023:

Wills and trusts

A client can establish a bequest to a fund at the Community Foundation through a will or trust or through a beneficiary designation on a qualified retirement plan or life insurance policy. The Community Foundation will provide proper bequest language.

Retirement plan beneficiary designations

Bequests of qualified retirement plans can be extremely tax efficient. Funds flowing directly to a client’s fund at the Community Foundation from a retirement plan after the client’s death will not be subject to income tax or estate tax.

Family philanthropy

Consider encouraging clients to involve their children and grandchildren in philanthropy, especially when the clients are working with the community foundation through a family donor-advised fund or other collaborative vehicle. We offer a variety of personalized giving services to make the charitable giving experience rewarding and impactful.

Income tax planning

Remind clients that they are eligible for an income tax deduction for lifetime charitable gifts, and the gifted assets are no longer subject to future estate taxes.

Complex giving

Consider more complex giving vehicles, including charitable remainder trusts, and charitable gift annuities. The Community Foundation can work with you to establish these structures to help facilitate your clients’ charitable giving goals and meet the clients’ financial and tax goals at the same time.

We look forward to working with you in 2023!

Congress passed the much-anticipated, $1.65 trillion-dollar omnibus spending bill known as the Consolidated Appropriations Act of 2023 (“CAA”) December 23, 2022. At more than 4,000 pages, the Act includes a wide range of provisions that impact multiple sectors.

Of particular interest to attorneys, accountants, and wealth managers who advise philanthropists are the provisions starting midway through the bill. The bipartisan legislation often referred to as “SECURE 2.0” is included in the CAA legislation. As background, SECURE 2.0’s provisions build on the original SECURE Act of 2019 (“SECURE” stands for “Setting Every Community Up for Retirement Enhancement). SECURE 2.0 includes the Qualified Charitable Distribution (QCD) enhancements that have been in the works for many months.

Here are three key provisions affecting philanthropists in the new law:

–Taxpayers may now make a one-time $50,000 QCD transfer to a charitable remainder trust (CRT) or other split-interest gift such as a charitable gift annuity (CGA). These are the “Legacy IRA” provisions. Note that the law effectively mandates that the CGA or CRT be created solely for the purpose of receiving a QCD because the new statute requires that the vehicle contain only IRA assets.

–The required minimum distribution (RMD) age (previously 72) increased to 73 on January 1, 2023. The age will increase to 75 beginning on January 1, 2033. While this provision is not directly tied to charitable giving, it will nonetheless impact your clients’ overall financial plans and potentially affect the timing and strategy of their philanthropy. As a reminder, “required minimum distribution” (RMD) refers to the mandated amount that a taxpayer must withdraw from qualified retirement plans, which include IRAs as well as 401(k)s and other tax-deferred retirement accounts.

–The annual per-taxpayer $100,000 QCD cap is now slated to be indexed for inflation, which will allow taxpayers to give even more from their IRAs directly to charity.

Here’s what has not changed:

–Eligibility for making a QCD still starts at 70 ½. This allows taxpayers who are not yet required to take IRA distributions under the RMD rules to still take advantage of the QCD technique without the income tax hit on the distributed funds while also removing those funds from liability for future estate taxes.

–Taxpayers required to take RMDs can still count QCDs toward their RMDs, thereby avoiding the usual income tax hit on RMD dollars.

–Charities eligible to receive QCDs include designated funds, field-of-interest funds, and scholarship funds at the community foundation, but still not donor-advised funds.

In fewer than five minutes with Jane Hunt you can feel her passion. Her positive energy and nature are palpable and before long, you’re wrapped up in one of the many causes she supports to help her community.

Hunt is the daughter of Johnelle and J.B. Hunt, founders of J.B. Hunt Transport Services, Inc., one of the largest transportation and logistics companies in the world.

“I saw my dad taking care of people, from his employees to a stranger on the street,” said Hunt. “He lived out his faith and always cared for the poor. He was my example, and I try to live my life like him. I knew from a very young age that I was going to help people too.”

One of Jane’s deepest passions is supporting early childhood education. “I have worked with several different nonprofit programs, and we all recognize we must address immediate needs while also working on the root of the problem. Experience demonstrates that early intervention pays off in the long run,” she said.

Hunt is a teacher by trade. “I loved teaching junior high,” she said. “It was apparent that the strongest students were not inherently smarter than their peers, they simply had the advantage of having been in a quality childcare or pre-K setting. There is so much data that supports the ripple effect of quality early childhood education. Healthy babies, toddlers and preschoolers become strong, capable adults.

“And it isn’t just little ones that need support. There must be a holistic approach. You have to create an environment around the babies and toddlers with good teachers, good childcare centers and good family support.”

One of the charitable funds Hunt initiated at Arkansas Community Foundation is the Early Childhood Champions Fund. The fund supports quality early childhood programs for children up to five years of age as well as scholarships for preschool teachers. The fund also extends the pre-K and Headstart day past 5 p.m. so that parents can work. Anyone who values early childhood education can donate to the fund.

Because of her influence, energy and commitment, hundreds of working families and their children have benefited from full-day, quality, early childhood education.

“I truly believe that supporting early childhood education is the ‘magic bullet’ to solve social issues and make our community a better place,” said Hunt. “Investing in our children is an investment for all of us.”

A group of committed citizens in Horatio, Arkansas, decided to start improving early childhood development for their community. Through research and community data, they raised funds to create innovative solutions to address gaps in early development for the town’s children. Now, they are making a huge difference for children’s development and family health in this southwest Arkansas town with a population of 984.

Children who don’t meet developmental expectations and are not ready for kindergarten are considered at-risk. Understanding where a community’s most vulnerable children live, along with knowing specific areas for improvement, allows schools, neighborhoods and cities to work together and make informed decisions.

In March 2019, community members in Sevier County participated in a first round of Early Development Instrument (EDI) assessments*. These assessments are a tool meant to identify areas for improvement for vulnerable children.

In Horatio, the EDI assessments revealed gaps in the areas of physical activity, gross and fine motor skills and overall social competence. To address these gaps, a subcommittee of community members began raising funds to improve local recreational spaces, and partnered with companies to elevate childhood development as part of business culture and customer experience.

Beth Tody is the regional coordinator for Excel by Eight in the area. She worked alongside schools, families and communities to help them understand the results of the EDI assessments and determine solutions for addressing the gaps. “Parks and recreational spaces have amazing benefits
for children’s physical development as well as their emotional development,” said Tody. “That notion is what drove our project design.”

One of the first areas of improvement was the local parks. “Through our conversations with community members, we heard that there simply weren’t enough safe, free places for families with young children to play, aside from joining competitive sports teams,” said Tody. “We know that childhood obesity turns into adult obesity, which exacerbates other chronic health conditions. We know that if children aren’t physically ready for school by kindergarten, then they struggle to learn.”

One innovative solution to address both the lack of access to free places to play and to help children be ready for kindergarten was the installation of a StoryWalk® in partnership with Save the Children.

“Imagine walking down a trail with a child, and you come upon a page from a children’s book. As you continue walking, you find another page, and then another, and you begin to realize you’re following a story,” said Tody. “This
has been so fun and educational for our town.”

The subcommittee also set up “busy boards” to help toddlers with their fine motor and problem-solving skills. These simple boards also help children practice real-life skills to ready them for their first year of school, like figuring out how to use zippers and buckles.

The story walks and busy boards were the first to be installed at two parks and a library. Then bilingual signage and book distribution locations were added around town. “We wanted our efforts to be family centered and easily accessible for all families, regardless of home language or ability to pay,” said Tody.

“Once the story walks and busy boards were finished, we saw local businesses step up to help and create their own fun ways to support our efforts,” she said. “We ended up adding book trees at Main Street Kitchen and Simple Simon’s Pizza, and Prime Country Meat market provided after-school snacks and meals. Now, in addition to a new soccer field being in
the works, we are exploring putting in a farmers’ market and a new playground to attract families to Hendrix Park. This project has been a great example of how both public and private investment in a community can lead to positive change.”

Research shows that access to recreation not only helps promote physical health for children and families, but also social-emotional health. When children are able to regulate their emotions, they are able to focus and follow directions in school-based settings. According to Tody, “Providing these spaces where children can play together helps them foster early friendships with other children. It also gives them the confidence they need in their development to be successful in their relationships with friends, family and at school.

“This entire initiative took a small group of dedicated people committed to making a difference for our children. And if it can be done in Horatio, Arkansas, it can be done anywhere.”

*EDI assessments measure children’s physical health and wellbeing; social competence; emotional maturity; language and cognitive skills; and communication skills and general knowledge. The results are combined so a community has a snapshot of how children are developing across neighborhoods, including areas of early development that need more support and in which parts of the community resources should be targeted.