OUR COMMUNITY'S FOUNDATION

 A Supporting Organization is an excellent alternative to a private foundation — with only a fraction of the administrative responsibilities. You recommend some of the board members, maintain personal involvement, and support the causes you care about most while gaining the favorable tax treatment of a public charity. Leave investment management, startup costs, grant administration, and reporting to your community foundation.

 

Though connected to a community foundation, the Supporting Organization you establish is a separate charitable entity — that bears your name, the name of your family or business, or honors any person or organization you choose. You recommend up to 49 percent of the governing board; the community foundation assigns the rest (so that you benefit from affiliation with a public charity). You and future generations may appoint successor board members to help direct the Supporting Organization you establish and define its purpose and mission.

 

Your contributions may yield a greater tax deduction than those made to a private foundation, and the Supporting Organization is not subject to other private foundation rules and regulations, such as paying an excise tax or making a minimum payout each year. Working through your community foundation, you have the choice of receiving recognition or remaining anonymous in your giving.

 

Several efficiencies preserve your charitable assets and allow you to make the impact you desire. The startup and administration is simple and allows your board to begin issuing grants right away. And through the years, your community foundation provides local grantmaking expertise, reporting services, and management of the Supporting Organization’s assets by investment professionals. (Because a supporting organization must file a separate tax form and have an audit, there are costs in addition to those regularly charged by the Foundation. It is important to consider whether a Donor Advised Fund with the Community Foundation will also accomplish the same goals at less cost.)

 

 

Ethel and Dave Steen were about to sell their decades-old family business. Over the last couple years, they had discussed using some of the proceeds to establish a charitable foundation. “Our community had given us our livelihood, and we wanted to say ‘thank you,’” says Ethel. “But we also want to enjoy our retirement. I was surprised at the time, energy, and money it takes to start and manage a private foundation.” The Steens wanted to make a big and positive impact but were not sure that they could consistently identify their community’s most pressing needs. After talking to their professional advisor, the Steens decided to establish The Steen Foundation for Giving, a Supporting Organization affiliated with a community foundation (not in the PACF region). “Our son and granddaughter sit on the board with us, so we get the family involvement and togetherness we were looking for,” says Dave.