Professional Advisors

Recommending charitable gifts ... simplified

Recommending charitable gifts ... simplified

Resources and Services

Discussing charitable gift planning strengthens relationships with your clients. It can be an effective way to grow your practice and benefit the community, but finding the right solution for your clients can be complicated. You have the skills and knowledge to best serve your clients’ financial and legal interests. The Community Foundation for Southeast Michigan has the local knowledge and expertise to best serve your client’s philanthropic interests by being able to offer a variety of creative giving options and services that achieve effective results. It’s a perfect partnership. We are a trusted source you and your clients can use to address the causes they care about most, while receiving the maximum tax benefits under federal law.

Whether you prefer to have a “silent partner” who provides behind-the-scenes consultation or if you seek an active philanthropic consultant partner, we can tailor our support to your needs and those of your client. Professional advisors can receive assistance in serving their clients through a variety of options available at the Community Foundation.

Giving Through the Community Foundation

Giving to the Community Foundation for Southeast Michigan is easy. We can accept one-time gifts or gifts over the course of several years. We accept a wide variety of gifts, including:

  • Cash, by check or online donation
  • Securities traded on major exchanges
  • Closely held business interests
  • Interests in limited liability companies
  • Patent interests and other qualified intellectual properties
  • Mutual fund shares
  • Fully paid life insurance policies
  • Retirement plan assets
  • Real estate

Giving through the Community Foundation allows your client to support what is most important to them. They may contribute to the endowment of a specific nonprofit organization or give to a particular area of philanthropic interest. Or, they may choose to support the Community Foundation’s unrestricted endowment fund, which gives us the flexibility to address the emerging needs and unforeseen opportunities that arise in our region over time, such as helping resolve Detroit’s bankruptcy.

Please consider giving online by clicking here. (Online gifts must be $10 or more.)

For gifts by mail, please complete the attached form, include it with your check and mail to:

Community Foundation for Southeast Michigan
333 W. Fort St., Suite 2010
Detroit, MI 48226

For gifts of cash via wire transfer or gifts of securities, please carefully review our Procedures for Making a Gift of Cash or Stock.

For assistance with any gifts, please call our Philanthropic Services staff at 313.961.6675.

Other Complex or Non-Cash Asset Classes

The Community Foundation can accept and process some unique forms of assets on your behalf and your client’s behalf. For example, we helped a client leverage a patent to be able to fulfill their philanthropic goals.

A. Paul and Carol C. Schaap Fund

In the 1980s, a discovery made by Wayne State University chemistry professor A. Paul Schaap helped revolutionize medical diagnostics and launch a very successful business. The professor developed a light-emitting molecule —  similar to the luminescence found in a firefly’s tail — which can be used to detect AIDS, cancer, hepatitis and other diseases. The company Schaap founded, Lumigen, is now the world’s largest supplier of chemical luminents to the diagnostic market.

Dr. Schaap and his wife, Carol, established a fund at the Community Foundation using the proceeds of the patent for this discovery. This fund has helped them support the university and its chemistry program in multiple ways, including through contributions to the newly christened A. Paul Schaap Chemistry Building and Lecture Hall. The state-of-the-art facility has earned a Leadership in Energy and Environmental Design (LEED) Silver rating for energy and environmental performance.

Paul and Carol C. Schaap have made a lasting impact on students and faculty with their gifts to the chemistry department at Wayne State University. The Community Foundation supports their philanthropic giving with expertise and services that are designed to maximize both their tax advantages and the philanthropic impact of their gift.

Create a Fund

Your clients may be eligible for an immediate tax deduction when establishing a charitable fund. They may choose from a number of types of charitable funds, most of which can be established for as little as $10,000.

Fund Types Include:

  • Donor Advised – Clients remain actively involved in how their gift is used to help charitable causes.
  • Unrestricted – Your client’s gift ensures that the Community Foundation can address the most urgent needs and most promising opportunities in our region as they evolve.
  • Field of Interest – Your client may support a specific cause that they care about, such as the arts, the environment, youth or the elderly. Such a fund could support a broad range of organizations working to address the cause(s) they care about.
  • Designated – Your client can support a specific organization or group of organizations with a permanent endowment fund.
  • Scholarship – Your client can invest in students and their educational aspirations.

To learn more about the types of funds at the Community Foundation, please refer to our detailed descriptions and answers to some frequently asked questions found by clicking here.

For a consultation, please contact our Philanthropic Services department at 313.961.6675.

Donor and Business Advised Funds

Donor Advised

For those clients who prefer to be actively engaged in charitable giving, donor advised funds offer a simple and effective way to support the causes and organizations they care about while streamlining administration, reducing costs, benefiting from professional staff support and gaining significant tax advantages.

Donor advised funds are flexible. They can be used for annual gifting, creating cash reserves for future charitable donations, engaging in philanthropic giving with other family members, and establishing a charitable legacy. Whatever your client’s goals may be, and whatever causes are most important to them, our staff will help develop a plan that meets their objectives.

To learn more about the difference between Donor Advised Funds, Supporting Organizations and Private Foundations, please click here.

Donor Advised Funds:

  • Allow for continued involvement in making grant recommendations from the fund to any U.S.-based public charity
  • Offer most of the benefits of a family foundation
  • Build a family or business tradition of philanthropy
  • Generate an immediate charitable income-tax deduction for gifts into the fund
  • Avoid capital gains on gifts of appreciated, long-term assets
  • Provide either public recognition or anonymity, whichever your client prefers
  • Free donors from tax recordkeeping, administrative burdens and expenses
  • Avoid the private foundation investment excise tax and mandatory payout requirements
  • Include professional management services and a choice of investment strategies to meet your charitable objectives
  • Can be organized as a permanent or non-permanent named fund
  • Can be established with a gift of $10,000 or more

In addition to the benefits described above, the following applies to our Non-Endowed, Endowed and Business Advised Funds.

Non-Endowed Funds

  • Provide the flexibility of making all of their assets available for grantmaking
  • Provide access to our five available asset allocations or custom investment arrangements for funds of $1 million or more

Endowed Donor Advised Funds

  • Create a permanent legacy of your generosity that grows over time
  • Provide access to our endowment pool investment allocation or custom investment arrangements for funds of $1 million or more

Business Advised Funds

  • An alternative to creating a corporate charitable foundation
  • A demonstration of your company’s commitment to the community
  • A reliable source for charitable giving, in order to maintain the presence of the business in the community in spite of unpredictable revenue cycles
  • May be endowed or non-endowed

Donor Advised Funds FAQs

What exactly is a donor advised fund and how does it work?

A donor advised fund is a fund within the Community Foundation established by an individual, a family, a business or a foundation with a gift of $10,000 or more. Fund advisors, designated by the donor, make recommendations on grants and fund investments. If desired, the Community Foundation’s professional staff can support donors and advisors by researching charities, working with you and/or your client to develop a mission statement, and conferring with you and/or your client on charitable planning.

What kinds of grant recommendations can be made by donor advisors?

The minimum grant is $250 and all grant recommendations must benefit a public charity based in the United States. Grants cannot be used to satisfy any obligation of a pledge made by fund advisors to the charity, nor can they result in a direct benefit to any advisor. For example, grants cannot be used to gain membership in an organization or to purchase a table at a fundraising event. All grant recommendations are subject to approval by the Community Foundation’s Board of Trustees. With endowed donor advised funds, grant recommendations can be made against the annual amount available for grants. In a non-endowed donor advised fund, grants may equal the entire value of the fund.

Grants to benefit charitable programs in foreign countries can typically be made through a U.S.-based intermediary. In limited circumstances, grants can be recommended overseas, but several federal anti-terrorism and other regulations must be met.

Click here to learn more about recommending grants from an advised fund or contact the Philanthropic Services department at 313.961.6675 to answer any additional questions.

Who is eligible to be a fund advisor and how long do they serve?

Anyone can be a fund advisor. In the case of business advised funds, the Community Foundation and the donor work together to determine the advisors and their length of service. Community Foundation policy currently allows for up to two generations of advisors. Following the death or resignation of the last advisor, the remaining fund balance is held as a permanent endowment fund in the name selected by the donor. In the case of business advised funds or those established by another foundation, the Community Foundation and the donor work together to determine the advisors and their length of service.

What investment strategies are typically used to grow the fund?

Investment options and fees vary by type of fund. The Community Foundation invests endowed Donor Advised Funds in its endowment pool. Donors to non-endowed Donor Advised Funds may recommend one of five investment strategies with American Funds. For more details on available investment strategies, please click here. Custom investment allocations can be arranged while there are donor advisors serving and if the fund is in excess of $1 million.

For a consultation, please contact our Philanthropic Services department at 313.961.6675, or complete the donor advised fund application found here.

Supporting Organizations

 Supporting Organizations

Supporting Organizations offer donors significant advantages — including favorable tax status and full participation in grantmaking and investment decisions — while avoiding the financial and management burdens that private foundations often encounter. A Supporting Organization is a separate corporation managed by the Community Foundation. These public charities have separate Boards of Trustees and may have separate investment counselors.  Supporting Organizations benefit from the professional support of Community Foundation staff, who assist in the administration of their funds.

Donors can establish a new supporting organization with a $5 million endowment. An existing private foundation with $5 million or more in assets can be converted or terminated into a supporting organization at the Community Foundation.

A Supporting Organization:

  • Enables donors to achieve their philanthropic goals
  • Generates significant tax advantages compared to a private foundation
  • Places fewer restrictions on giving and grantmaking than private foundations
  • Can be established with a minimum contribution of $5 million

 

Private Foundation Services

The Community Foundation provides a variety of fee-based, back-office services for private foundations to help them minimize administrative costs and maximize charitable impact. These include:

  • Recommending worthy organizations for grants
  • Developing charitable mission statements
  • Connecting donors with similar interests
  • Grant administration and check-processing
  • Financial reporting

Planned Gifts

Planned Gifts

Charitable giving shouldn’t happen by accident. Every charitable gift your client(s) make should be planned to ensure it both fits their interests and supports the causes they care about.

The terms “planned gifts” and “planned giving” refer to several gift techniques that typically involve the client retaining a portion of, or an interest in, the asset they are giving to charity. Often, charitable distributions under a will or trust, life insurance and retirement plan beneficiary designations, and other direct — but deferred — gift arrangements are also considered planned gifts.

Planned gift arrangements give your client an opportunity to address a wide array of issues they may be facing and can provide them with many benefits. They can be simple or complex, depending on the unique financial, family and business situation they face. Call our Philanthropic Services department at 313.961.6675 to begin customizing a plan that is right for your client.

Benefits of Planned Gifts

  • An immediate charitable income tax deduction
  • Avoidance or deferral of capital gains taxes if appreciated property is used to fund the gift
  • Retained and possibly increased income to your client or others they care about
  • Possible assistance in asset diversification
  • Support for charity

Almost anyone can make a planned gift. Many planned gifts, such as charitable gift annuities, can be established for relatively small amounts ($10,000 or more). Arrangements such as charitable remainder trusts and charitable lead trusts may require more significant amounts to make the administrative and implementation costs of the gift reasonable. The Community Foundation does not serve as a trustee, but we can work with trustees to fulfill the charitable intentions of the trust.

There are a number of different planned gift options, each of which is useful in certain circumstances. The goal is to find the planned gift that is most advantageous to your client, to all those who are significant to them, and to the causes they support. The Community Foundation’s staff can provide assistance in creating a planned gift that’s right for your client.

Types of Planned Gifts

Your client may wish to make a charitable gift to a fund at the Community Foundation, but also needs to provide a source of income for themselves or others. In this situation, one of several retained income gift techniques may be attractive. These arrangements include:

Charitable Gift Annuity

This is an agreement between your client and the Community Foundation wherein we agree to provide the annuitant (usually the donor) a determined amount for life, in exchange for the gift. Unlike most other retained income arrangements, a gift annuity is not a trust. Rather, it is a contract between the Community Foundation and your client that is secured by our assets. Donors can establish a gift annuity at the Community Foundation for a minimum gift of $10,000 or more.

Charitable Remainder Trust

Charitable remainder trusts are established by the donor and are separate trusts that benefit only your client or their designated beneficiaries — and, ultimately, the charitable causes they care about — through the Community Foundation. There are multiple types of charitable remainder trusts to fit a variety of situations. The two main types are annuity trusts, which pay a set amount to the beneficiary, and unitrusts, which pay a percentage of the annually determined value of the unitrust to the beneficiaries. We can work with you to ensure that the charitable cause your client cares about is ultimately supported by their trust.

Other planned giving arrangements provide current support for charity with a deferred benefit to your client or others, or are deferred gifts that take effect upon their death or with the passage of time.

Charitable Bequest by Will

One of the simplest ways for a donor to provide for their community is to establish or add to a fund at the Community Foundation through a bequest in their will. This is a simple option that allows them to enjoy all of their assets during their lifetime and use them to support their favorite causes after death.

Insurance

Life insurance makes it possible for virtually everyone to make a meaningful gift. Fully paid policies that are no longer needed for their original purpose can make excellent gifts when given to the Community Foundation. Your client can either designate the Community Foundation as the beneficiary, or can gift the policy during their life and likely receive an immediate income tax deduction.

Retirement Assets

Like life insurance, retirement assets can be easily gifted to the Community Foundation at death. This can be done by changing the beneficiary designation for the retirement asset. In addition, your client can reduce income taxes payable by their family — in addition to saving estate taxes — by giving retirement assets to the Community Foundation. For example, if a client were to give a $100,000 IRA to their children at death and another $100,000 of assets to the Community Foundation, their children would have to pay income taxes on the IRA (in addition to any estate taxes that might be owed). By giving the IRA to the Community Foundation and the other assets to the children, all of the income taxes are avoided on the IRA. This income tax benefit can be important when planning the distribution of your clients’ pension, profit sharing, Section 401(k) and Section 403(b) plans, and IRAs. Special rules apply to making charitable gifts of these assets during life. Please consult with your tax advisor and the Community Foundation about these rules.

Charitable Lead Trust

Similar to a charitable remainder trust, a charitable lead trust is established by your client. The Community Foundation receives the current distributions from the charitable lead trust, with the remainder returning to your client — or more typically being transferred to their family. These arrangements can be very useful in helping a client reduce the gift and estate tax costs of moving assets to their family, and can sometimes be used to generate current income tax deductions.

Remainder Interest in Residence

Under certain circumstances, a client can provide for the transfer of their home to the Community Foundation upon their death and still live in their home. This technique can generate immediate income tax deductions for your client, even though they remain in their home until death.

Choosing to give to the Community Foundation in your will is easy. You should always consult with your legal advisor, but sample language such as the following will help make clear your intentions. “I give __________ to the Community Foundation for Southeast Michigan for the benefit of the _________ Fund.”  The first blank may be filled in with a specific dollar amount, a specific percentage, or the remainder of the estate.  The second blank may be used to name a specific fund the funds should benefit, or you can simply make the gift to the Community Foundation without a specific fund name.

Please call the Philanthropic Services department at the Community Foundation for Southeast Michigan at 313.961.6675 to take advantage of the many opportunities a planned gift can provide your clients and their families.

Endowment Investment Performance

The endowment pool is managed with a long-term perspective where principal is preserved and enhanced over time. Total return, consistent with prudent investment management, is the primary goal.

Funds invested in the endowment pool are subject to a spending plan that makes a percentage of the fund’s average market value available for grants each year.

The target asset allocation of the Community Foundation’s endowment pool as of June 30, 2015, is as follows:

Investment-Target-Allocations-06-2015

Endowment pool investment returns as of June 30, 2015, net of fees:

-0.9 percent – 1 year
7.4 percent – 3 years (annualized)
8.3 percent – 5 years (annualized)

Legal Financial Network Group

Legal/Financial Network Group members serve as ambassadors on behalf of the Community Foundation to the professional advisor community. The member firms, among other services:

  • Provide advice and counsel to the Community Foundation for services it should provide donors and professional advisors
  • Increase the public’s understanding and awareness of the Community Foundation’s purposes
  • Introduce prospects to the Community Foundation, and
  • Perform other assignments as may be requested or undertaken from time to time.

Chairs

Andrew L. Camden
Co-Chair
Dana M. Locniskar
Co-Chair

Members

Thomas Alongi Benson J. Barr Thomas H. Bergh Barbara B. Bierbusse
Michael G. Cumming Eugene A. Gargaro Jr. John D. Gatti Nave K. Grewal
Henry M. Grix Rebecca L. (Donnini) Grove Mari Anne Guidobono Jay A. Herbst
William D. Hodgman Darnell D. Jackson Mark W. Jannott Robert B. Joslyn
Shirley A. Kaigler Robert E. Kass Jay A. Kennedy Bernard S. Kent
John P. Landis David P. Larsen Henry P. Lee John D. Mabley
J. Thomas MacFarlane Patrick J. Mansfield Walter V. Marsh Alan A. May
Michael F. McCarthy Michael J. Mehr Seymour M. Nayer Robert M. Nemzin
Charles Nida Michael A. Page Trevor D. Royston Sean C. Sant
Richard A. Shapack Rebecca S. Sorensen James P. Spica Nancy J. Vella
Lyle M. Wolberg

 

Professional Advisors Philanthropic Institute

The Professional Advisors Philanthropic Institute was a pilot program in 2013-2014. The program is only open to professional advisors, attorneys, accounts and financial advisors. The program is overseen by the Legal/Financial Network Group.

Participants:

  • Developed an understanding of how to make charitable giving more strategic, effective and fulfilling by helping clients clarify their philanthropic values, goals and needs.
  • Learned how to grow as a leader and professional enriched by a deep involvement in the community and philanthropy.
  • Became knowledgeable about related professionals’ roles in serving clients and gained the skills needed to work as a team to increase philanthropy in the community.
  • Understood how foundations and nonprofits in southeast Michigan work with individuals, for-profits and governments to address social and economic challenges.

The Professional Advisors Philanthropic Institute offers a networking opportunity and a curriculum not available through any other professional or leadership development opportunity offered in southeast Michigan.

The Foundation is currently developing the next Professional Advisors Philanthropic Institute for 2015-2016. Those interested in participating may send an email to PAPI@cfsem.org.

Tax-exempt Status

The Community Foundation for Southeast Michigan is a tax-exempt public charity. Our federal EIN/tax identification number is 38-2530980. To view our tax exemption letter from the IRS, please click here.