Page 23 – Arkansas Community Foundation

Jim and Elgenia Ross of Monticello take their family’s charitable giving seriously, like, Robert’s Rules of Order seriously. Every year, the Ross family comes together to determine where their charitable gifts will go. Daughters Kim and Molly, both of whom live out of state now, along with their children Kyler (12) and Sadie (17), join Jim and Elgenia to have an official meeting, this last year by Zoom. The family takes turns taking minutes and votes on their favorite charities. “We start with Arkansas-based charities,” said Jim, “And then the next level of focus is in Drew County. We like to give local.”

Jim is a longtime supporter of Arkansas Community Foundation. As a retired attorney, he has referred many of his clients to the Foundation and is the former Chair of the Community Foundation’s Board of Directors. “When I was the chairman of the Foundation’s Board, I heard a story about one family that had three generations of giving. This inspired me. I wanted our impact to be perpetual, so we opened a fund and our family began an annual tradition of coming together to choose our favorite Arkansas nonprofits to support. This is something we all look forward to,” said Jim.

Elgenia is originally from North Carolina but calls Arkansas home. “Arkansas is the perfect size for what we want to do. The state is small enough to know more about what is going on. When we make donations to local organizations, we can see the impact more directly. The Community Foundation makes giving more personal,” said Elgenia.

Elgenia and Jim Ross with their granddaughter

“We all like to do a little research before the family gets together. We share that responsibility,” said Kim Ross, one of Jim and Elgenia’s daughters. “But I think an unexpected benefit of doing this together every year is that it keeps our family connected. I live out of state and so does my sister. Choosing Arkansas nonprofits to support has kept us familiar with what is going on ‘back home’ and keeps us connected to each other in a unique way. For my parents to start this fund and ensure such a meaningful legacy means a lot to me, and hopefully to my son, Kyler.”

Kyler likes to hand-deliver the check to the nonprofits he supports. In June of 2021, he took a check to the Nature Conservancy, one of his nonprofit choices for the year. “It was pretty cool,” said Kyler.

According to the Foundation’s Chief Development Officer, Ashley Coldiron, Jim should probably be on the Community Foundation’s payroll. “Jim has referred so many clients to us that I’ve lost count. And the ripple effect of his referrals continues making an impact for so many Arkansas nonprofits,” said Coldiron.

“What the Foundation does is great for sustaining legacies. One of my favorite stories is about P. Luevonda Ross and how we’ve ensured her hard work and impact are remembered. A friend of our family and local schoolteacher, Sarah Blackmon, came to me years ago and told me about one of her former students, Luevonda. Luevonda worked hard, became a well-respected attorney and was elected circuit judge for the 10^th judicial district,” said Jim. “But she died from cancer just weeks before she took office. We established a scholarship in her name and years later, her nephew, Quincey Ross, took her place on the bench. We are so proud of her legacy.”

Jim continues to refer former clients, friends and whoever may need guidance about giving to the Community Foundation. According to Jim, “The Community Foundation is an easy sell.”

Arkansas Community Foundation is honored to work with you and your clients to structure charitable giving plans and establish funds that achieve both your clients’ charitable objectives as well as address our region’s greatest needs.

Our team at the Community Foundation intimately understands the issues facing our community and how grants from funds can be impactful. We do this through deep knowledge of Arkansas’ nonprofits, due diligence to ensure that each charitable dollar helps as many people as possible, and an unwavering commitment to investing in our community for the long term.

As we enter into an era of potential tax reform, we pledge to keep you informed of legislative developments that will require you and other advisors to navigate the important distinctions between Community Foundation donor-advised funds and commercial donor-advised funds, as well as the differences between donor-advised funds and private foundations.

No matter what legislation is passed and when, the Community Foundation team is here to educate you and your clients. We’ll also keep you posted on charitable giving options that are tax reform-neutral and suggest ways to leverage pre-legislation windows of opportunity. Please reach out with any questions you’d like to be sure we address in our advisor communications.

With charitable bequests on the rise, and the possibility that more clients will be subject to Federal estate taxes in the future, many attorneys, accountants, and financial advisors are refreshing their recollections on the requirements of advising and administering taxable estates where one or more charitable organizations is a beneficiary.

Advisors’ fiduciary responsibilities to charitable beneficiaries are similar to fiduciary responsibilities to a decedent’s family members and other individual beneficiaries. Where a charity is a residuary beneficiary, for example, a fiduciary must pay careful attention to expenses and liabilities that impact the amount the charity ultimately receives. These liabilities and expenses include taxes, debts, fees, and costs incurred by the executor or trustee. A fiduciary should expect charity remainder beneficiaries to pay as much attention to the bottom line as family members.

Not only must a fiduciary watch expenses to maximize the remainder beneficiaries’ interests, but a fiduciary must also be careful to avoid making distributions too early and therefore potentially becoming personally liable if estate obligations surface later. This was the unfortunate situation in Estate of Lee, T.C. Memo. 2021-92, where the fiduciary ultimately was found by the Tax Court to be personally liable for amounts due under a Federal tax lien.

As you assist your clients with estate planning that involves charitable giving, consider encouraging your client to talk with the charitable organization about the intended bequest so that expectations are well-documented, even if the bequest likely will not materialize until well into the future. Remember, too, that some charitable clients can benefit from establishing a fund at the Community Foundation to receive and administer their bequests to charitable causes. In that case our team at the Community Foundation can assist as you structure a bequest in the client’s estate plan.

Finally, and critically, ensure that the legal documents or beneficiary designation forms reflect the correct name of the charity. There are more than 1.5 million charitable organizations in the United States, and many have similar names. Arkansas Community Foundation maintains a directory of Arkansas Nonprofits on our website here. If you have any questions about which charity your client intends to benefit, ask both the client and the charity to confirm the exact name and location of the organization.

A force in Arkansas farming and communication industries for decades, Ritter Arnold’s family has always chosen to be charitable in the communities where they do business. Arnold is a longtime fundholder with Arkansas Community Foundation, sits on multiple boards in Arkansas and comes from a long line of intentional philanthropists.

“My grandparents sponsored three Polish families who were displaced during World War II. They brought them to Marked Tree and helped them rebuild their lives. I think charity is just in our family’s DNA,” Arnold said.

The Community Foundation has helped Arnold’s family build their legacy through an endowment and bring focus to their charitable giving through a Donor Advised Fund. “Years ago, my family and I decided that we wanted to be more intentional about our giving. We were always getting lots of asks for money, from beauty pageants to baseball teams, and those were all fine to help, but with the Foundation, we were able to narrow it down to the areas where we could have deeper community impact,” Arnold said. “We opened a Donor Advised Fund, and our family’s giving preferences focus on food security, healthcare, quality housing and access to broadband.”

Anticipating the recent demand for food through the pandemic, the Arnold family helped the Foodbank of Northeast Arkansas expand capacity and operations. “We like to help organizations that are efficient and well run. The foodbank was one of those, led by Christie Jordan. She and her team have the infrastructure to help more people. The foodbank was able to use our gift to expand their services. They get food at wholesale, then distribute it to the pantries that need it most,” Arnold said.

“I know that the need is just as great in July of 2021 as it was in July of 2020. It will take some people years to recover. Having access to food is an easy way to help them with one less thing to worry about,” said Arnold. “That’s why we work with the Foundation — they make our charitable giving easy, but more importantly, they’ve helped us find the most reliable organizations to support.”

St. Francis Food Pantry founder, the late Catherine Freeman, would rather give food to someone who didn’t need it than miss anyone who did. Along with running the busy food pantry in Forrest City, current director LaTwon Whitby inherited Freeman’s desire to feed every person in St. Francis County who needs food.

Though Whitby has been battling cancer since 2012, he and his wife Evetta, and often their children, are keeping up the work Freeman began in 1982. Whitby regularly gathers influencers and other volunteers in Forrest City to donate resources, serve and deliver food.

At a ceremony naming Whitby Citizen of the Year several years ago, Judge Gary Hughes said, “He gives of his time on a daily basis. What makes LaTwon special is that his dreams are coming true before his very eyes. Because of his leadership and because of the things he is doing, those who are hungry are being fed.”

One day in the summer of 2021, Whitby was managing the food line, making sure the first responders were ready to deliver food to the homebound and helping a couple of Extension Service agents set up a vegetable planting demonstration.

“It’s not me,” he kept saying. “It’s everyone here who makes this place run.”

And everyone was there. Retiree George L. Cochran, Sr., has been working at the pantry 20 years. Freeman recruited him to help with deliveries and he worked with Whitby to set up the vegetable gardens. Circuit Judge Kathie Hess and her sister County Treasurer Tammy Talley worked the serving line, giving generous portions of tasty meatloaf, mashed potatoes and green beans to citizens in need.

“It’s showing love,” said DarAnn Banks, a 10-year food pantry volunteer. “It is very important to feed the hungry and show concern for others in the county.”

Everette Woods of the Unified Riders Motorcycle Club has been volunteering for seven years. “I try to always give back,” he said. “I’ve been blessed, and my family has been blessed. I try to help someone else.”

Run almost exclusively by volunteers, St. Francis County Food Pantry is headquartered in Forest City and works to serve the whole county.

Forrest City Mayor Cedric Williams was greeting people as they walked in to get their food. Also a local insurance agent, Mayor Williams has made a practice of volunteering at the food pantry and marshalling the City’s resources to help the cause. “Working here and making deliveries helps our relationship with the community,” said Police Chief Deon Lee.

UA Pine Bluff student and track star Stephen Lane runs from his home in Sunrise to the food pantry in Forrest City every day to water the garden. “It helps me stay in shape. I feel a responsibility to help people, and I enjoy putting a smile on people’s faces,” he said.

After witnessing the joy and community spirit that filled the St. Francis Food Pantry on a very hot July noonday, it seems likely that one of those smiling faces is Catherine Freeman, enjoying her vision of feeding the hungry from a place high above Forrest City.

Little Rock, Ark. (Aug. 10, 2021) – New Arkansas Community Foundation State Board members include Lisa John-Adams of Blytheville, Dr. Eduardo R. Ochoa of Little Rock and Dr. Jack Porter of Hot Springs. The Community Foundation engages people, connects resources and inspires solutions to build communities throughout Arkansas.

“Lisa, Eddie and Jack are excellent additions to our board. We are so glad to welcome them to the Foundation family,” said Heather Larkin, President and CEO of Arkansas Community Foundation. “Each brings critical knowledge, broad experience and a unique perspective about Arkansas and its needs.”

Dr. Porter is a retired dentist who has served on the local Hot Springs Area Community Foundation affiliate for nearly 20 years. He is chairman of the Oaklawn Center on Aging board of directors, a member of the National Park Rotary Club and is currently working to save the Army Navy Building in Hot Springs. He and his wife, Janet, are active members of First Baptist Church in Hot Springs and continue to serve in international mission work.

Dr. Ochoa, a pediatrician in Little Rock affiliated with multiple hospitals, launched the Latino Clinic for special needs children at Arkansas Children’s Hospital in May 2009 and the West Little Rock Primary Clinic in 2010. He led the building project and was named medical director of the Children’s Hospital Southwest Little Rock Community Clinic opened in June 2017. His research interests include Latino health, health disparities, children with special health care needs and community engagement.

John-Adams has been Quality Systems director at Nucor Steel Arkansas since 2000, has been with Nucor for 27 years and is a certified Quality and Environmental Systems lead auditor. She is a past president of the Greater Blytheville Area Chamber of Commerce and serves as board president of The Haven of Northeast Arkansas Domestic Violence Shelter. John-Adams is a member of the Great River Economic Development Foundation Board, chairs the Board of the KIPP Delta School and is a board member of The National Cold War Center.

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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.

Camden, Ark. (July 20, 2021) – Allison Lawson of Camden has been named executive director of Ouachita Valley Community Foundation, an affiliate of Arkansas Community Foundation that supports nonprofits serving Ouachita and Calhoun Counties through funding, networking and capacity building opportunities.

“During Allison’s 14 years as a legal assistant and office manager, she gained valuable skills like workflow prioritization, project management and the ability to work with a broad range of people. These skills will serve her well as the new executive director for our Ouachita Valley affiliate,” said Heather Larkin, President and CEO of Arkansas Community Foundation.

Lawson grew up in Camden and returned to the community with her own family in 2013. She has been office manager for Allen P. Roberts, P.A., where she previously served as a legal and administrative assistant.

She is a member of the Ouachita Valley Community Foundation Affiliate Board and is a member of the First United Methodist Church of Camden, where she served on the Board of Trustees and previously served on the Finance Committee. Lawson volunteers for Camden Fairview School District Parent Teacher Organizations and is the co-founder of Cards K=5 which works to increase communication and support for elementary parents, students and teachers in the district.

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Your team at Arkansas Community Foundation stays on top of tax cases, IRS rulings, and legislation that could impact the advice and counsel you provide your clients on matters involving charitable giving.

Here are a few current highlights and reminders we recommend you skim.

Electronic filing is now required for private foundations

For tax years 2020 and beyond, all private foundations must file Form 4720 (Return of Certain Excise Taxes) electronically, beginning with returns due on or after July 15, 2021. The Internal Revenue Service will no longer accept paper returns filed by a private foundation with a due date on or after July 15, 2021. More information is available from the IRS in a special notice and on a reference list of software providers.

Charitable giving legislation introduced

Senate Bill 1981 was introduced on June 9, 2021 by Senators Angus King and Chuck Grassley. The Accelerating Charitable Efforts (ACE) Act, as it is called, aims to increase the flow of support to nonprofits’ efforts to help the communities they serve. The Act would impose new requirements and limitations on private foundations and donor-advised funds.

We, together with our colleagues at community foundations around the country, are watching this legislation closely. We encourage you to reach out to our team if you have questions or concerns about how potential changes to the law might affect the charitable planning work you do for your clients.

Conservation easements remain on the radar

If any of your clients have deployed a conservation easement as a charitable planning tool, you’ll want to keep a close eye on the law in this area. Long the subject of scrutiny, arguably due to the behavior of a few bad actors claiming aggressive deductions, conservation easements may soon be subject to the provisions of the Charitable Conservation Easement Program Integrity Act introduced in both the House and the Senate on June 24, 2021. The proposed legislation intends to prevent abuse while still encouraging the proper use of the conservation easement as a vehicle for the long-term protection of public land.

Indeed, TOT Property Holdings LLC et al. v. Commissioner, a recent Eleventh Circuit case affirming the Tax Court’s decision to disallow a deduction for a charitable gift of a conservation easement, is one of 80 cases currently being pursued by the Internal Revenue Service to challenge aggressive “syndicate” forms of conservation easements.

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

Designated funds and field-of-interest funds may not always be top of mind when you are developing philanthropy plans for your clients and their families, but they are extremely valuable tools in certain circumstances and it’s important to be aware of what the terms mean.

A field-of-interest fund at the Community Foundation is established by your client for a charitable purpose described by your client. For example, a field-of-interest fund can be established to support research for rare diseases, to support organizations that assist homeless families in getting back on their feet, to enable art museums to acquire works that celebrate the region’s diversity, and so on. The knowledgeable team at the Community Foundation distributes grants from the field-of-interest fund according to the spending policy set by your client to further the client’s wishes. Your client selects the name of the fund, whether they wish to use their own name (e.g., Samuels Family Fund or Samuels Family Fund for the Arts), maintain anonymity (e.g., Maryville Fund for the Arts), or something else altogether (e.g., Bettering Our World Fund).

A designated fund at the Community Foundation is a good choice for a client who knows they want to support a particular charity or charities for multiple years. This is useful so that the distributions can be spread out over time to help with the charity or charities’ cash flow planning, enable your client to benefit from a larger charitable tax deduction in the current year when the client’s tax rates are high rather than spreading it out over future years when tax rate projections are lower, or both. The client specifies the charities to receive distributions according to a spending policy they select, and the client can choose a name for the fund.

Perhaps one of the most compelling reasons to encourage a retirement-age client to consider establishing a field-of-interest fund or a designated fund is to take advantage of the Qualified Charitable Distribution planning tool. As an advisor, you are well aware that clients who own Individual Retirement Accounts (IRAs) are required to take “Required Minimum Distributions” each year beginning at age 72, whether or not they need or want the income. These distributions often cause an increase in the client’s income taxes.

A Qualified Charitable Distribution permits a client to transfer up to $100,000 from an IRA to a qualified charity instead of taking a Required Minimum Distribution, thereby avoiding the income tax hit. Although the IRS does not permit Qualified Charitable Distributions to donor-advised funds, charities eligible to receive a client’s Qualified Charitable Distribution do include designated funds and field-of-interest funds at the Community Foundation.

Richard Bell’s accounting business has been a family affair from day one. “I wanted to get married. But Lee told me I needed to not work at a grocery store for the rest of my life, so I went into accounting,” said Richard.

Forty years of marriage to Lee, two children and four business partners later, Richard runs Bell & Company, a regional certified public accounting and business advisory firm. The firm boasts a diverse staff who all have a strong educational background and excellent professional experience.

“The Foundation of Family” is the hallmark of Bell’s company. Jeff Lovelady, CPA, serves as the attest and audit partner, and Kelly Phillips, CPA, is the small business tax partner. Alongside them are Richard’s sister, Nell Sterling, a partner and COO, and his daughter, Jennifer, also a partner.

“Jennifer could manage an Excel spreadsheet when she was 13 years old,” said Richard. She is an attorney and CPA, serves on a local bank advisory board and served on the board for the Community Foundation for Faulkner County. His son Clayton is a doctor on the medical staff at the University of Tennessee and is nationally recognized for his volunteer work in Haiti through a nonprofit he established, Where the Stars Still Shine.

“My father has always been in philanthropy ever since I can remember,” said Jennifer. “Whether it was doing pro-bono work for someone just starting their own business, helping employees pay for their college or tithing at church. As someone who had to pay his way through college and then law school, working full-time, he made sure that both my brother and I did not have to endure the same stress.”

Richard is a firm believer in giving back, but credits most of his success to his public education. “I’m a first-generation college graduate and went entirely through the public school system in Arkansas. This has played such an important role in my life. I’ve tried to instill this importance into my children, but it also drives how and why I give back,” said Richard.

“My father had to work hard for everything in his life – there were people along the way who helped open doors for him and gave him an opportunity that he otherwise would never have gotten,” said Jennifer. “I saw several of his mentors, some of whom happened to be our clients, throughout my life and I observed the gratitude my father had for them. The most inspiring part, though, was that it was him who usually helped them out with their businesses. Seeing this over the years has taught me to take the time to help others, regardless of the context, because it truly does come back tenfold in life.”

Richard and his team at Bell & Company are fully committed to a culture of philanthropy. The firm has a donor-advised fund with Arkansas Community Foundation and every year a group of young professionals, both CPAs and future CPAs, choose the organizations to support through the fund.

“We recruit employees who have a history of public service in their resume. It is important to me that we find a way to give back and support our local community. Giving is a teaching tool, and I think our employees have embraced this. Some staff have been with the firm for 30 years,” said Richard. The firm was recognized nationally as the AICPA Public Service Firm of the Year for 2011. In 2020, Richard received the Lifetime Achievement Award in accounting from Arkansas Business.

One continued mechanism for the firm’s philanthropy is Arkansas Community Foundation. “We recommend the Foundation to our clients to help them meet their charitable goals and use philanthropy for the tax benefits,” said Richard. “We use the Foundation for our charitable giving but we refer our clients to them too. Look at who the Foundation represents! It handles million-dollar endowments, but also the smaller funds. The Community Foundation makes it possible for almost anyone to be a philanthropist. It makes giving back accessible for the masses.”

Along with the funds with the Foundation, Bell & Company also created a scholarship with UALR Bowen School of Law. Jennifer still sees the effect of her dad’s commitment to giving back through that scholarship. “Scholarships can make a huge impact for students to get even a small amount of financial assistance. I am very proud of the scholarships that our firm and family have been able to provide to students in Arkansas, and hopefully the few students we get the opportunity to help each semester will have life a little easier, at least from a financial standpoint,” said Jennifer.

“I’m really fortunate to be an example of the ‘American Dream’” said Richard. “My father was a sheet metal worker and my mother had about an 8^th grade education. I’m a product of Arkansas schools and want to make it possible for more people to have what I did.

The grants the Foundation makes every year blow my mind. Providing so many large and small grants all over the state, they all make a difference. It reminds me of a story in the Bible where Ruth and Naomi were gleaning in the fields… every little bit added up to be life-changing. That is how I see philanthropy. And the Foundation makes it possible for anyone to give back. Every little bit counts.”