Your Philanthropy and Community Foundations

May 23, 2014
Jeff Brown, MD

The average physician and his or her spouse are assailed almost daily with appeals to give money to a myriad of seemingly worthy charitable causes.

The average physician and his or her spouse are assailed almost daily with appeals to give money to a myriad of seemingly worthy charitable causes. And many of us have ideas and wishes on our own about what we might or could do with discretionary assets once we have met the basic goals of funding college for the kids, retirement, and a financial safety cushion.

Under the confusing din, we begin to realize there is a whole language and world of infrastructure—legal, organizational, and ethical—that we have never been exposed to on the subject of charitable giving. And the learning curve can be daunting, to say the least.

That’s where the community foundation (CF) comes in. There are about 750 of them spread across the country and their purpose is to issue grants that will improve people’s lives in some way on the donor’s behalf. Through CFs, donations are targeted to a specific geographic or functional area.

These organizations are regulated under federal 501-C laws. Because banks and trusts are not well suited to deal with philanthropy, CFs have thrived because philanthropy is their only business. They act as clearinghouses, or intermediaries, with guidance provided, to help steer altruistic-minded folks through the often foggy maze of regulations and best practices in thoughtfully giving money to organized charitable causes.

CFs work with you by identifying core family values, which leads to a plan and strategies for management. Are you motivated for disaster philanthropy or disease solution? Aid to veterans or the homeless? Are you interested in learning about process and potential impact? And what are the criteria and metrics for assessing these? The skills, the due diligence and the strategies?

That is what CFs exist for. They range in size from under $100,000 to $1.7 billion, having granted in total some $4.3 billion in 2011. There are financial companies, such as Charles Schwab or Vanguard, that will be happy to hold your money in a tax-free account and dole it out upon request to appropriate donees, but they offer no guidance on how to get your arms around the field and the process involved in doing so.

This is the “deep dive” into the specific issue area that matters to you. The “peel down” to brass tacks, as it were. To get to really know, if not get involved in, the cause that moves you.

Another real benefit CFs have is their ability to bring together like-minded clients, to avoid duplication, and to add impact by matching. Don’t be intimidated as a would-be donor not to get involved because you do not have huge assets available you think might be required. US bequests from CFs can start as little as $250 and foreign bequests from $2,500.

I have written about the universal habit many of us have for ad hoc donations that occur randomly in small amounts through our lives in response to friends’ requests, TV or mail solicitations, or the exigencies of the moment. The CF is a different animal—the thoughtful interest in a legacy that will leave a positive mark either in and/or after our lifetimes.

There is more to learn. Go online and check out your local CF and the background information you can acquire through the national organizations that serve our CFs.