Arkansas Asset Funders Network, Arkansas Community Institute and HOPE Policy Institute (HPI) hosted a virtual town hall on Thursday, January 27 to spotlight the burden of medical debt and court costs in Arkansas. The event unveiled policy recommendations and a special announcement benefitting Arkansans struggling with medical debt. The goal of the event was to grow awareness of medical and court costs/fees debt in Arkansas and inspire action and policy change at local and state levels. 

Moderated by Roby Brock, the event, “We’re Still Hurting: From the ER to the Courtroom” included Judge Rita F. Bailey of the 31st State District Court, Heather Larkin of Arkansas Community Foundation, Signe-Mary McKernan of the Urban Institute, Kevin Ryan of the Fay W. Boozman College of Public Health at UAMS, Neil Sealy of the Arkansas Community Institute and Joanna Smith-Ramani of the Aspen Institutes’ Financial Security Program. 

Lower income Arkansans and people of color are disproportionately affected by medical debt. Heather Larkin announced that a group of philanthropic organizations and donors is erasing $35.3 million of medical debt for Arkansas residents. 23,896 Arkansans, spread through all 75 counties, are benefiting from the debt payoff, with an average eliminated medical debt of approximately $1,500 per individual or family. RIP Medical Debt coordinated the payment on behalf of the Winthrop Rockefeller Foundation, HOPE Credit Union, Arkansas Community Foundation and other donors.

Read the news release about $35 million debt payoff. 

As part of the event, Arkansas AFN, ACI and HPI shared federal, state and hospital-led policy recommendations that could help alleviate and prevent medical dept. They also highlighted how the court system, state legislature and local governments could enact changes to end the criminalization of poverty and reform debt collection practices. Click here to watch the event.

Understanding Debt

Medical debt and fines and fees debt is a barrier to economic mobility. If people are already struggling with low incomes, and having to put money toward debt, then they can’t save or build wealth towards the future.  This type of debt perpetuates the cycle of poverty.

 When families can’t pay the debt, they default on these debts which results in damaged credit scores, compounding barriers to economic opportunity. Medical debt and fines and fees exacerbates pre-existing financial insecurity. There is data that shows a spillover psychological effect of date, which deeply effects families and their children. 

Actionable strategies to combat the debt crisis include passing state laws to regulate and expand hospital-based financial assistance programs and providing protections for patients from abusive medical debt collection practices. 

On a federal level, advocates can urge the Consumer Financial Protection Bureau to mitigate the harms of medical debt by limiting medical debt reporting on credit reports; create and publish new data on consumer impact of medical debt, particularly in communities of color; and increase consumer safeguards related to debt collectors and health care providers.  

More creative solutions include developing constructive alternatives to harsh fine and fee collection practices such as low-cost payment plans, financial counseling/coaching, and meaningful community service. 

Funders can also lessen the burden of medical debt and court costs by increasing Arkansans’ access to legal representation or legal counseling; calling for systemic reforms; elevating impacted residents’ stories; and funding advocacy, research and public-private pilot initiatives.  

Unless adequately medical debt and fines and fees deepens existing disparities in Arkansas, stifling economic opportunity particularly for ALICE households. 

A full list of policy solutions presented at the January event can be found here.  


About Arkansas Asset Funders Network 
Arkansas Asset Funders Network is a regional chapter of grantmakers who invest in opportunities for low and middle-income individuals and families to build economic well-being. Members include private, public, corporate and community foundations as well as public-sector funders and financial institutions. For more information, visit assetfunders.org. 


About Arkansas Community Institute  
Arkansas Community Institute was founded in 1985 to improve housing opportunities in low- to moderate-income neighborhoods in Arkansas. The grassroots organization organizes low-income, working families to enable them to fight for social and economic justice. Over its history, ACI has released several reports on fair housing, predatory lending, access to health care, Arkansas’s landlord tenant laws and debt. ACI also offers free tax preparation and other services. 
 
About the Hope Policy Institute 
The Hope Policy Institute (HPI) is the policy and advocacy arm of Hope Enterprise Corporation / Hope Credit Union. HPI develops and advocates for policies to increase investment, expand financial inclusion and build the power and voice of local people in the Deep South. Channeling the voices and lived experiences of its members who often face discrimination in the financial service sector, HPI offers policymakers, at all levels, the information needed to make equitable decisions and build a stronger region. To learn more, visit hopepolicy.org and hopecu.org. 

Debt in America: An Interactive Map 
This map shows the geography of debt in America and the  debt differences that can reinforce  the  wealth gap  between white communities and communities of color. 

Click here to view the interactive map.

Arkansas Community Foundation is honored to receive the 2022 Advancing Equity Award from the Clinton School of Public Service and their Center on Community Philanthropy.

Watch the announcement here.

The Advancing Equity Award is presented to organizations using innovative solutions to address racial inequalities in their communities and advance progress toward inclusion. The award recipients will receive support to continue and enhance their efforts. The National Day of Racial Healing (NDORH) is an opportunity for people, organizations and communities across the United States to call for racial healing, bring people together in their common humanity and take collective action to create a more just and equitable world. NDORH is a part of the W.K. Kellogg Foundation’s Truth, Racial Healing & Transformation (TRHT) effort – a national and community-based process to plan for and bring about transformational and sustainable change and to address the historic and contemporary effects of racism.

“The greatest wealth transfer in modern history has begun,” according to a mid-2021 report in the Wall Street Journal. And, with tax reform’s big bite into estate values off the table, at least for now, many of your older clients may be thinking seriously about their legacies.

And these legacies will be significant. As of March 31, 2021, according to data collected by the Federal Reserve, Americans in their 70s and older had a total net worth reaching almost $35 trillion. By 2042, an estimated $70 trillion will change hands, including an estimated $9 trillion flowing to charities, according to research conducted by Cerulli Associates. 

As you advise an older client, an important part of the conversation will be to determine the best charitable giving vehicles to achieve your client’s community goals, particularly evaluating the potential role of a donor-advised fund or private foundation. Increasingly, your clients are learning about their options in mainstream media and likely have a greater level of awareness about charitable giving options than ever before, especially in the wake of the recent twists and turns concerning potential tax reform. 

Here are key points to keep handy for those conversations:

– A donor-advised fund at the Community Foundation costs nothing to set up, and ongoing fees are minimal. 

– A donor-advised fund can be created quickly–within a week or even days. A private foundation, by contrast, requires establishing a legal entity through state and IRS filings. 

– Donating hard-to-value assets to a donor-advised fund delivers better tax benefits (deduction of fair market value) than a gift of the same assets to a private foundation (deduction of cost basis).

– A client can deduct a greater portion of AGI (e.g., cash deductible up to 60% of AGI) with a gift to a donor-advised fund than with a gift to a private foundation (e.g., cash deductible up to 30% of AGI). 

– Ongoing operations of a donor-advised fund through the Community Foundation are very easy, with no tax filings required. 

– Sometimes, both a private foundation and a donor-advised fund are useful tools to meet a client’s charitable giving goals. The team at the Community Foundation team can help you develop a structure for your client that maximizes the benefits of each vehicle within an overall philanthropy strategy.

Finally, remind your clients that the best time to set up their philanthropic plans really is right now. By being proactive, your client has nothing to lose and everything to gain in ensuring that their charitable wishes are carried out. To that end, the Community Foundation regularly works with advisors helping clients who wish to establish deferred or “shell” funds to receive bequests after the clients pass away. A deferred fund allows a client to describe charitable intentions, including naming advisors and suggesting nonprofits to receive fund distributions, to guide the heirs through the client’s charitable legacy. Your client can name the fund, and even provide that the Community Foundation’s board of directors work with advisors to make grants and evaluate impact. A deferred fund agreement can be modified anytime before your client’s death. 

More than half of the country’s GDP is generated by the 5.5 million family-owned businesses in the United States. Profits aren’t the only priority for most family businesses; indeed, the vast majority of family business owners report that other factors, such as culture, community, charity, and values, are also important to the business. Although it is not surprising that philanthropy is a vital part of the family business fabric here in Arkansas, setting up the right structure to leave a legacy is not a cakewalk. As you advise a business-owner client, consider sharing questions that might help your client create or grow an effective corporate philanthropy program within the family enterprise.

Getting organized

Does the company have a strategy or system for prioritizing sponsorship requests, charity event invitations, and requests for donations? Is the strategy based on the owners’ values, along with employee input? What is the communication strategy for maintaining positive relations with the charities whose requests the company turns down? How are requests from employees handled? Could a corporate donor-advised fund at the Community Foundation help streamline administrative load? Is there a corporate foundation in place and if so could it be streamlined into a corporate donor-advised fund to save administration hassles and better leverage tax strategies?

Getting employees engaged

If the company has a community engagement program, how popular is it? For example, is there a matching gifts program and is that program being utilized as expected? Are employees eager to attend community events to sit at the company’s tables, or is it sometimes hard to fill seats? Are there opportunities for employees to volunteer together at local nonprofits? Has the company surveyed employees to learn about their favorite causes and the ways they prefer to give back (e.g., donate money, volunteer, serve on boards)? 

Getting the word out

How is the company letting employees and other stakeholders know about its community commitments? Is it a priority to share civic engagement with the outside world, such as through a page on the company’s website, or is the company’s approach to stay under the radar? Do the employee handbook and recruiting materials describe community engagement opportunities for employees?  

Related, and importantly, it is wise to remind your clients that the sale of a closely-held business creates strong opportunities for tax-savvy charitable giving–and that it is critical for the business owner to plan ahead.  

Helping your clients ask the right questions can make a big difference in the success of their corporate giving programs. The team at Arkansas Community Foundation is here to help YOU help your client think through these important questions. We can help by setting up a corporate donor-advised fund, assisting with a matching gifts program, creating donor-advised funds for employees, collaborating on a philanthropic component of a business sale, and much, much more.  Contact Ashley in Little Rock or Jody in Northwest Arkansas to get started.

Deborah and Steve Nipper of Magnolia use their deep roots and longstanding relationships to help define and model community leadership for good causes in south Arkansas.

“Community leadership is really about people who just want to help and find a way to solve problems. They are the helpers,” Deborah said. “Steve and I both have this desire. We like being part of solutions for Magnolia. And when we got married in 1996, we agreed that what one does, the other would do too, so we are a two-for-one deal,” Deborah said.

“I was born and raised here and then went to the University of Arkansas. I came back to Magnolia to work in banking. I know lots of business owners and local community leaders,” Steve said. “But Deborah taught Kindergarten in Magnolia for 37 years, so she is like a celebrity.”

Steve and Deborah have both held seats on the Columbia County Community Foundation board, as well as dozens of other local boards in the area. Between Rotary, their church outreach, a recent COVID hotline, a local food distribution program called the Stewpot and many other causes, the Nippers are often found volunteering and showing up to help.

But alongside the various organizations and causes they support, Steve credits the Community Foundation for showing him what he calls the “miracle of endowment.”

Deborah and Steve Nipper are strong supporters of the Magnolia Arts Center.

“Magnolia is a generous community. In 2006, the Columbia County Community Foundation Affiliate opened 40 family endowments from local donors,” Steve said.

“Those funds are still providing funds to local nonprofits 15 years after they were started. An endowment is one of the most lasting ways to help causes we care about.”

One of the couple’s passions is supporting the Magnolia Arts Center — where they can sometimes even be seen on stage for local productions. “We both love the arts and love what the Magnolia Arts Center is providing this community,” Steve said. “I helped the Center acquire the building. Once it had a physical presence downtown, the growth was phenomenal. You may not expect a town with a population of 11,500 to have a robust visual and performing arts scene, but Magnolia does.”

“This town provides great opportunities for everyone here to experience the arts. We strive for inclusivity. Magnolia Arts thrives with great volunteers like the Nippers, support from the Community Foundation, local businesses and donors, members, partnerships with Southern Arkansas University, and The Magnolia School District Performing Arts Department,” said Janet Rider-Babbitt, director for Magnolia Arts and the Columbia County Community Foundation affiliate executive director.

“Steve and Deborah are a huge part of why the Arts Center is successful, but they are part of something bigger for the town of Magnolia. They epitomize community leadership by setting an example, using their influence, and showing up when help is needed.”

Late last month, the White House released a proposed $1.75 trillion revenue package, putting to rest (at least for now) some of the uncertainty as to how sweeping tax reform could upend wealth planning strategies via changes to top marginal rates, a restructuring of the capital gains tax, and lower estate and gift tax exclusions, all of which have been heavily discussed and debated over the last several weeks. For now, those particular big changes appear to have been dropped. 

Attorneys, accountants, and financial advisors who represent high-net worth clients are, however, keenly aware of how the just-proposed legislation still could pack a punch:

  1. Where charitable giving is concerned, the proposed new surtax (modified from earlier versions) is not something that can be avoided or reduced through charitable deductions. That is because the proposed 5% surtax on taxpayers with more than $10 million in adjusted gross income is assessed on just that–adjusted gross income. Below-the-line deductions won’t help. Furthermore, an additional 3% surtax has been proposed for taxpayers with more than $25 million in AGI.
  2. In addition, under this new proposal, pass-through entities, such as S corporations and partnerships, are still the subject of a 3.8% Net Investment Income Tax, as was the case under the prior version of the revenue package. Under the new proposal, this tax would be expanded to taxpayers with taxable income of $400,000 ($500,000 for joint filers) or more.    
  3. Of interest to advisors who represent businesses and business owners, under the proposed new law, a 15% “corporate minimum tax” would apply to “book income” of corporations earning profits greater than $1 billion. For your clients who’ve historically relied on income tax credits, this is an important provision to watch because income tax credits would not be as valuable as they are now. 
  4. Related, look out for a parallel increase to the global minimum tax rate, especially for corporate clients who have an eye on relocating headquarters to foreign countries. And under the new proposed laws, when a corporation buys back its own stock, it would be taxed like corporate dividends–plus a new 1% excise tax.
  5. Finally, effective as of September 13, 2021 if the legislation is passed as written, high net-worth clients could be significantly impacted by the proposed limitation on “stock exclusions” under Internal Revenue Code Section 1202. For taxpayers with adjusted gross income of $400,000 or more, and for estates and trusts, only the 50% exclusion provision would remain. The 75% and the 100% exclusion would no longer be available.

Little Rock, Ark. (November, 2021) –Wayland Holyfield, the singer and songwriter of “Arkansas, You Run Deep in Me,” one of the Arkansas State Songs, donated the rights to the song to Arkansas Community Foundation.  

“I want my song to continue to inspire Arkansans for years to come. Gifting the rights to Arkansas Community Foundation ensures the songs legacy, and will hopefully inspire Arkansans to appreciate our state, its generosity and the support of essential nonprofits,” said Holyfield. “I’m so pleased the Community Foundation has found a way to use my words and music in their efforts.” 

The Community Foundation is producing a video using the song that portrays the many ways Arkansans and Arkansas nonprofits help each other build their communities. The video will be distributed during the Thanksgiving season to thank donors nonprofits and other Arkansas supporters. 

The “Arkansas, You Run Deep in Me” Video Premiere is planned for 5 p.m. Nov. 18 at the Central Arkansas Library System Ron Robinson Theater in Little Rock. Holyfield will appear at the event, which is free to the public. Reservations can be made at Kbland@arcf.org. 

“We’re rolling out the red carpet for the Mr. Holyfield, our donors and all those who work hard to build our state,” said Heather Larkin, President and CEO of Arkansas Community Foundation. “Wayland’s song sends the perfect message about our state’s beauty and culture. Mixed with beautiful footage of our state and its people working together for good, the video will be seen first on the big screen and the next day it will go online on multiple platforms.” 

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Arkansas Community Foundation, a nonprofit organization with over a half billion dollars in assets, fosters smart giving to improve communities. The Community Foundation offers tools to help Arkansans protect, grow and direct their charitable dollars as they learn more about community needs. By making grants and sharing knowledge, the Foundation supports existing charitable programs that work for Arkansas and partners to create initiatives that address unmet needs. Since 1976, the Community Foundation has provided more than $314 million in grants and partnered with thousands of Arkansans to help them improve our neighborhoods, our towns and our entire state. Contributions to Arkansas Community Foundation, its funds and any of its 29 affiliates are fully tax deductible. 

Little Rock, Ark. (Nov. 11, 2020) – Jessica Szenher of Little Rock, Ark., is the latest recipient of the Lugean L. Chilcote Award, given by Arkansas Community Foundation Board of Directors to honor exceptional service to the organization. Szenher is the 23rd recipient of the award, which was established in 1985 with Lugean L. Chilcote as the first recipient.

“This prestigious award honors those who have given exemplary service to the Foundation,” said Heather Larkin, president and CEO of the Community Foundation. “Jessica has been a dear friend, advocate and an enthusiastic champion of our Foundation’s mission for over 20 years.”

A native of Little Rock, Szenher is retiring in November after more than 40 years as a public relations and communications professional. She is past president and a long-time member of the Arkansas Chapter of Public Relations Society of America. The society awarded her the Crystal Award in 2000 for her significant and continuous contributions to the field of public relations.

After earning her bachelor’s degree in journalism and home economics from the University of Arkansas – Fayetteville, Szenher began her career as a reporter for the Texarkana Gazette. She moved back to Little Rock to work in corporate communications for Southwestern Bell Telephone Company. Szenher also worked in healthcare communications and for Little Rock marketing firm Stone Ward before founding her consulting business, Jessica Szenher Consulting.

An active member of First United Methodist Church, Szenher served on the Altar Guild, led the Confirmation and Member Care teams, was active in adult education and the food ministry, and served on various other church committees.

She and her husband Doug have two grown children, James and John Michael.

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Arkansas Community Foundation, a nonprofit organization with over a half billion dollars in assets, fosters smart giving to improve communities. The Community Foundation offers tools to help Arkansans protect, grow and direct their charitable dollars as they learn more about community needs. By making grants and sharing knowledge, the Foundation supports existing charitable programs that work for Arkansas and partners to create initiatives that address unmet needs. Since 1976, the Community Foundation has provided more than $314 million in grants and partnered with thousands of Arkansans to help them improve our neighborhoods, our towns and our entire state. Contributions to Arkansas Community Foundation, its funds and any of its 29 affiliates are fully tax deductible.

Fayetteville, Ark. (Oct. 14, 2021) – Annetta Tirey of Bella Vista recently joined Arkansas Community Foundation as its Northwest Arkansas Program Officer. She leads grants and community leadership efforts and programs for the Foundation in the northwest region.

“Annetta’s long tenure with Tyson Foods in their corporate giving program and her successful leadership at the Northwest Arkansas Community College Foundation will be an asset to the Northwest Arkansas office as we expand our footprint there,” said Heather Larkin, President and CEO of Arkansas Community Foundation. “Her deep knowledge of the area’s unique opportunities and her extensive experience in the philanthropic sector make her a perfect fit.”

While leading the Northwest Arkansas Community College Foundation from 2016 to 2020, Tirey helped to expand NWACC’s presence in northwest Arkansas through the capital campaign to build a new center in Springdale.  She provided strategic leadership and creative direction for all development activities at NWACC. 

Tirey joins Jody Dilday, vice president of northwest operations in the Foundation’s Fayetteville office. Tirey and Dilday work to serve Benton, Carroll, Crawford, Sebastian and Washington counties. They provide donor services to existing fundholders, support for local nonprofits and the development of community leadership initiatives in the region. The Community Foundation also has a local affiliate office in NWA that makes local grants to the Fayetteville area, led by Stacy Keenan, executive director of Fayetteville Area Community Foundation.

A team member of Tyson Foods from 1994 to 2016, Tirey held several positions including director of Corporate Philanthropy and administrator of Charitable Giving Programs. She managed philanthropic and social responsibility strategies related to grants and charitable initiatives, team member giving and disaster relief programs for Tyson.

She received a Bachelor of Science in Communications degree from the University of Central Arkansas.

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Arkansas Community Foundation, a nonprofit organization with over a half billion dollars in assets, fosters smart giving to improve communities. The Community Foundation offers tools to help Arkansans protect, grow and direct their charitable dollars as they learn more about community needs. By making grants and sharing knowledge, the Foundation supports existing charitable programs that work for Arkansas and partners to create initiatives that address unmet needs. Since 1976, the Community Foundation has provided more than $314 million in grants and partnered with thousands of Arkansans to help them improve our neighborhoods, our towns and our entire state. Contributions to Arkansas Community Foundation, its funds and any of its 29 affiliates are fully tax deductible.

Fall is in the air. Weekends are filled up with craft fairs, corn mazes, and calling the HOGS! In addition to these traditions, autumn is also a season for philanthropy.

Did you know that most nonprofits raise 50% or more of their annual revenue between Thanksgiving and December 31st? This support is critical, as many agencies offer additional programs and supportive services for families throughout the holidays.

As a donor, the end of the year can be an important time for you as well. Here are few things to keep in mind as you prepare for the end of the year:

EXTENSION ON INCENTIVES IN THE CARES ACT

  • An increased adjusted gross income (AGI) deduction limit—For those who itemize, the AGI limit is increased from 60% to 100% for cash contributions to charities (excluding donor-advised funds and supporting organizations) made in 2021, with a 5-year carryforward for contributions that exceed 100% of AGI. For corporations, the limit on deductions for contributions, ordinarily 10 percent of AGI, is elevated to 25 percent for 2021. 
  • A universal deduction of up to $300— Taxpayers who do not itemize can receive an “above-the-line” deduction for cash contributions made to charities (excluding donor-advised funds and supporting organizations) in the 2021 tax year. This is limited to each “tax-filing unit” so married couples who file jointly can only deduct $300. All taxpayers are eligible, even people who use the standard deduction. Make a gift directly to charities of choice, or help support an array of nonprofits through our Giving Tree Funds.

OTHER TAX-SMART STRATEGIES

  • Establish or ADD TO a Fund. Community Foundation funds provide a simple, efficient giving solution, allowing you the opportunity to take immediate action or create a long-term difference. The charitable gift deductions in the CARES Act exclude donor-advised funds, but donors can direct gifts through other types of Community Foundation funds (like a designated fund) for the maximum tax benefit. Learn more about Community Foundation fund options.
  •  Utilize an IRA Qualified Charitable Distribution (QCD) to make charitable donations. If you are age 70 ½ or older, you can use a QCD to direct up to $100,000 each year to qualified charities without treating the distribution as taxable income. Making a QCD allows itemizers and non-itemizers alike to donate in a tax efficient manner. This is particularly smart if you claim the standard deduction and would miss out on writing off charitable contributions. Learn more about IRA QCDs.
  • Stack multiple years of charitable contributions in one calendar year. In order to exceed the standard deduction in a given year, you can “bunch” donations to receive maximum tax benefits. And by using a Community Foundation charitable fund, your gifts are tax-deductible, the assets can be invested, and charitable dollars can grow tax-free. You can use those assets to provide ongoing support for your favorite nonprofits, even in the years you claim the standard deduction.

MAKE IT A TRADITION

Many families have made it a tradition to give thanks by giving back. We’d love to help you be thoughtful and intentional in teaching generosity to your children and grandchildren. Contact Ashley or Jody to learn more about our customized, generational giving services. We’re proud to be your partner in philanthropy!