Does the Foundation accept gifts of real estate and other unusual gifts? |
| A: Yes! The Foundation is able to accept gifts of real estate and other unusual gifts. These gifts are typically liquidated and the proceeds are either added to the Foundation's unrestricted funds or used to establish a fund named by the donor, or a combination of the two. Named funds can be established exclusively to benefit the donor's charitable interest.|
On a case by case basis, the Foundation could consider accepting such gifts on behalf of other nonprofits. Our separate supporting organization, Louisiana Real Estate Foundation, is established exclusively for the receipt of such gifts.
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Can the Foundation accommodate public-private ventures? |
| A: Yes. Community foundations across the country are attractive vehicles for accommodating public-private projects. Community Foundation of Acadiana can accommodate private dollars for public projects throughout Acadiana. Citizen groups, municipalities, civic volunteers and agencies can establish funds to accommodate causes such as affordable housing, arts and culture, parks, green spaces, trails and libraries.|
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| Q: Can a private foundation be dissolved and the assets used to establish a fund at|
Community Foundation of Acadiana?
| A: Yes. The number of private foundations has increased dramatically over the past several decades, but so have the number of families wishing to terminate them. Recent clarifications in the tax code have simplified the termination process. In some cases, the family loses interest, the money dries up, or the administration becomes so burdensome that the family opts for a donor advised fund where they can focus on grantmaking without the hassles. |
The administration of a private foundation can be a significant burden. Running a $3 million foundation may be harder than running a $30 million one because smaller foundations cannot afford to pay staff to handle daily operations or to consult on issues such as succession planning. At the same time, the small foundation must find resources to pay for expert outside assistance on legal and accounting issues.
From a financial point of view, costs often outweigh benefits. Private foundations can be financially prohibitive to set up and maintain considering starting a foundation costs between $2,000 and $5,000, mostly in legal and accounting fees, which will cover, in addition to counsel, a required submission to the IRS requesting charitable (501(c)(3)) status.
In subsequent years, private foundations can pay $1,500 to $3,000 a year for professional tax filing, which is not difficult, but can result in excise taxes or even stricter penalties if done incorrectly. Foundations must show on their annual tax returns (990-PF) that they have met the IRS's requirement that they disburse five percent of their assets annually, and that foundation money was not used to enrich its insiders or otherwise jeopardize its tax-exempt status.
Regardless of whether a foundation has $10 million or $30 million in assets, the most common motivation for termination is the family succession issue. It is conceivable that successive generations do not share the same charitable interests as the original donor(s). In addition to this, family can be scattered across the country and, subsequently, the family loses interest in running the foundation.
Because of the costs and potential headaches involved, advisors should do sufficient upfront work with clients to clarify that a private foundation is right for them.
Advisors can help by working with clients to prioritize their giving goals and review the benefits and drawbacks of each giving vehicle option. Bringing multiple generations into these planning sessions ensures that everyone gains insight into the process, and the choice ultimately becomes a family decision. The more clients know in advance about the opportunities and pitfalls of each type of charitable vehicle, the easier the transition will be.
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| Q: How are funds established? |
| A: |
Once the decision is made to contribute to Community Foundation of Acadiana, donors can create a personal philanthropic fund suited to their specific needs and interests. A fund may bear the name of the donor, the name of a loved one, or any other name the donor chooses. Anonymity is also an option. Donors can then delineate the general or specific purposes of their gifts. In keeping with their goals and interests, they may choose an Advised Fund where they make specific suggestions for the distribution of the fund’s income (and principal, if the fund is not permanent). They may choose a more general Field of Interest Fund, or they may determine that the best use of their gift is in Unrestricted Funds. Several choices are defined briefly below.
For more detailed descriptions, please call Community Foundation of Acadiana to discuss you options. Note that in all cases, the donor may specify geographic limitations (i.e. a home parish, a hometown, an historic district)
Donor Advised Funds
This type of fund simplifies charitable giving and allows donors to make suggestions about distributions of income and, if not an endowment, of principal as well.
Corporate Charitable Funds
Comparable to a donor advised fund, this fund is established with corporate dollars, employee dollars or a combination of the two. Grants from this fund continue to further the charitable interests of the corporation.
These funds are usually created by visionary philanthropists who care about the community beyond their own lifetimes (and thus matches a donor’s intention of anticipating and identifying specific future needs); an Unrestricted Fund enables Community Foundation of Acadian to respond to the community’s changing needs and emergencies.
Field of Interest Funds
This type of fund provides for the support of a broad area of concern which is meaningful to the donor and establishes a priority for the Foundation which is then empowered to make grants to the most appropriate programs and organizations within that specific field of interest.
This type of fund let you support specific organizations while we make sure that grants to these groups remain relevant over time and responsive to changing circumstances. The donor may specify that the recipient organizations use the funds for very specific purposes.
Donors often choose this type of fund as a memorial to a loved one, to honor a special person or in support of a particular educational institution, a particular area of study or to assist students from a specific geographic area.
Organization Endowment Funds
This type of fund is established by nonprofit organizations to provide income to support its charitable mission in perpetuity. We handle all administrative and investment responsibilities, freeing the organization to pursue its charitable mission.
Support Organizations or Foundations
A Support Organization or Foundation provides somewhat more independence and autonomy to the donor, as it generally has its own charter, bylaws and objectives. These objectives, like the Support Foundation’s mission, must be consistent with Community Foundation of Acadiana policies. A donor may even serve as one of the Support Foundation trustees, along with trustees selected by Community Foundation of Acadiana.
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| Q: How do I get started? |
| A: Call us at Community Foundation of Acadiana (337-769-4840) for an appointment. We would be honored to discuss with you and with your financial and legal advisors the exceptionally rewarding charitable opportunities available to you and your family – now and in perpetuity – through Community Foundation of Acadiana. |
Community Foundation of Acadiana
For Good. For Acadiana. For Ever.
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| Q: How does it work? |
| A: Community Foundation of Acadiana funds and underlying assets are governed by an independent Board of Directors – local citizens selected for their knowledge of and commitment to community needs and professional expertise. Their charge is to represent the donors’ interests with the utmost integrity. Directors serve, without remuneration and exercise the final authority with regard to all Community Foundation of Acadiana investments and charitable grants. Community Foundation of Acadiana day-to-day operations are conducted by a professional staff organized to satisfy the needs of our donors and their charitable objectives. |
Community Foundation of Acadiana offers a broad array of Charitable Fund templates to accommodate donor interests and giving techniques. Gifts are invested to achieve the donor’s charitable goals with regard to growth, impact and perpetuity.
Donors can establish a fund in their name, in a family’s name, in memory of someone, or in the name of any person or organization they wish to honor. (At the unfortunate death of a loved one, memorial gifts can be made to a fund named in memory of the deceased.) Grants distributed from a donor’s fund are awarded in the name of the fund – in perpetuity! As a donor-focused Foundation, donors support the causes about which they care, immediately and in perpetuity, creating a permanent and personal legacy of giving.
Community Foundation of Acadiana researches and verifies the tax-exempt charitable status of all organizations recommended for or applying for grants, analyzes proposed grants to assure proper use of the funds and monitors projects for compliance with the appropriate charitable goals. Community Foundation of Acadiana grants represents a partnership of donors, its Board of Directors and staff and qualified charitable recipients, all dedicated to accomplishing the highest level of community-oriented philanthropy.
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| Q: In what other ways can I be involved in the Foundation? |
| A: Community Foundation of Acadiana benefits from the support and contributions of individuals, families, companies and organizations throughout Acadiana. The Foundation is strengthened by these diverse contributions:
Establish a named fund
Invest in a fund that is already established
Those interested in establishing a named, charitable fund, but currently lack the sufficient resources, can still do so via an Acorn Fund. This option affords donors the option to contribute annually until the required minimum is attained. This alternative is often attractive to your professionals as they increase their earning power, or businesses that anticipate future growth.
Become a Member
Membership sustains the Foundation and supports its growth. With levels of annual membership dues beginning at $100, the Foundation attracts a wide base of support for its mission. A percentage of membership dollars are earmarked for our Community Endowment Fund – our unrestricted grantmaking fund and a percentage for our Endowment Fund for the benefit of Community Foundation of Acadiana – our fund for operations.
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| Q: Is the Foundation answerable to or part of a national organization? |
| A: No. Community Foundation of Acadiana is a donor-focused, local organization established to serve, primarily, though not exclusively, the citizens and charitable needs of our community. It is not a franchise of a national organization. |
Our membership in the Council on Foundations and Community Foundations of America, however, afford exceptional legal, organizational and practical guidance as well as resources to network with foundations throughout the country.
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| Q: Is there a necessity for a separate 501(c)(3) or will a component fund suffice? |
| A: Frequently, good people and groups with genuine altruistic motives establish separate legal entities in order to satisfy their charitable objectives. In some cases, a component fund may suffice saving immediate and on-going expense and administrative burden. In some cases, Community Foundation of Acadiana can also accommodate fundraising initiatives.|
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| Q: What are the advantages to the donor? |
| A: Community Foundation of Acadiana was created to serve its donors, by ensuring their beneficence is wisely distributed to philanthropic causes. There is no other agenda! |
The Foundation simplifies gift-making. A gift may be made or a fund established with a minimum of legal complexity, report-making or other entanglements. A donor simply states, in a letter to Community Foundation of Acadiana, the intent of the gift and the nature of the contribution; Community Foundation of Acadiana is qualified to accept gifts of cash, real estate, intellectual property, stocks and bonds, annuities, life insurance, oil, mineral and other interests, closely held securities, the assets of private foundations and other organizations and real property such as antiques and fine art.
The Foundation can assure donors that their charitable intentions will be carried out and, if necessary, adapted to changing conditions. This mandate means Community Foundation of Acadiana will often be a convener, educator, researcher, reporter and creator of projects to help carry out the intended mission of the donor.
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| Q: What are the goals of Community Foundation of Acadiana? |
| A: The major goals of the Foundation are:
to build permanent, named component funds established by many separate donors for the broad-based charitable benefit of the residents of the community,
because the Foundation is donor-focused, and because of its flexibility, to provide donors with options that fulfill their financial and charitable interests, and
to maintain the strength of the charitable services in our community.
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| Q: What are the operating costs of a Community Foundation of Acadiana fund? |
| A: Community Foundation of Acadiana professionally manages several component funds. The Foundation and its investment managers invest individual gifts and bequests as a family of funds, yielding significant economies of scale in both investment and administration. The operating costs of Community Foundation of Acadiana are generated through an administrative fee charged against the balance of each fund. Generally, funds are assessed one percent per annum; a sliding scale affects those funds with assets of $1 million or more. (An Administrative Fee Schedule is available upon request.)|
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| Q: What is Community Foundation of Acadiana? |
| A: Community Foundation of Acadiana is a tax-exempt, non-profit, autonomous, non-sectarian public charity. When an individual, family, corporation, foundation or other organization establishes a fund at Community Foundation of Acadiana, it is a gift to the Foundation and, as such, generally fully tax deductible under Section 170(b)(1) of the Internal Revenue Code. |
Community Foundation of Acadiana was established to receive gifts, endowments and bequests from donors and to act on the donors’ charitable wishes both during their lifetime and in perpetuity. Community Foundation of Acadiana responds to long-standing as well as to new and emerging local needs, acts as a catalyst, a convener and an implementer in meeting emergencies and initiates projects as needed under its broad charitable mandate.
This model has been successful now for almost a century, since the first community foundation was founded in Cleveland, Ohio in 1914. Today, there are over 650 such foundations throughout the country – Community Foundation of Acadiana is the fifth in the state. (See www.communityfoundationlocator.org for links to other community foundations.)
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| Q: What is the Community Foundation of Acadiana investment policy? |
| A: At the direction of the Board of Directors of Community Foundation of Acadiana, Foundation funds are invested in a portfolio that produces funds for grantmaking while providing for asset growth and security of principal. Seeking to enhance both the services provided to donors and to the community, the Board of Directors consult regularly with investment professionals. |
Community Foundation of Acadiana maintains both long-term and short-term investment strategies. Donors can also choose a Catholic Values Balanced Growth Portfolio which employs some restrictions.
Our Investment and Spending Policies and Procedures are available by clicking here.
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| Q: What size gift is required? |
| A: An individual fund can be established at Community Foundation of Acadiana for as little as $10,000. The Foundation also has the capacity to manage multi-million estates and endowments. Every donation offers important tax benefits – both a charitable tax deduction at the time of the gift and a reduction in future estate taxes. Potential capital gains tax obligations can also be eliminated. |
To be clear, Community Foundation of Acadiana is not exclusively for the very wealthy. Unlike the private foundation model, Community Foundation of Acadiana affords the opportunity for everyone to participate to create a lasting legacy. Acorn funds afford donors committed to attaining the $10,000 minimum the opportunity to contribute $1,000 per year toward that goal.
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| Q: When is the best time to establish a fund? |
| A: Gifts can be made to Community Foundation of Acadiana at any time. By establishing a fund NOW, donors receive full income tax deductions and may eliminate capital gains taxes. Often donors choose to establish a fund when they have experienced a particularly successful year and find they are subject to unusually high taxes, or they decide they want to increase their involvement in and contributions to the community. Community Foundation of Acadiana funds are particularly beneficial because they enable a donor to make a gift for tax purposes in one year and see it distributed over the course of several years. Donors can also DEFER their gifts and minimize estate taxes by establishing a fund through a will.
Other donors may find it most opportune to establish a fund through a deferred giving arrangement that provides tax benefits and income to the donor and/or the donor’s family, and ultimately provides that income to a charitable purpose of the donor’s choosing. Other donors may realize significant tax advantages from establishing a Charitable Lead Trust with the Foundation, with assets eventually reverting to the donor or others. Finally, many of the Foundation’s gifts come from bequests created in donors’ wills. An individual needs simply to state in his or her will to leave funds or a percentage of the estate’s assets – with or without distribution instructions to Community Foundation of Acadiana.
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| Q: Who is Community Foundation of Acadiana? |
| A: Established in 2000, Community Foundation of Acadiana provides individuals, families, corporations and foundations in Acadiana a visionary and rewarding approach to philanthropy. Community Foundation of Acadiana is donor-focused! Its singular mission is to ensure each donor’s legacy is wisely invested, each grant is effective and that a donor’s family name is proudly preserved forever. As a "public” foundation, as opposed to a private foundation, Community Foundation of Acadiana provides maximum tax benefits for donors. Community Foundation of Acadiana offers charitable expertise to ensure that the non-profit community’s clearly-documented needs for dollars for capital, research, education, health, welfare and innovative ideas are successfully matched with funding, in accordance with the philanthropic interests of Community Foundation of Acadiana donors. Community Foundation of Acadiana is committed to serving (primarily) the eight-civil parish area of south-central Louisiana, including Acadia, Evangeline, Iberia, Lafayette, St. Landry, St. Martin, St. Mary and Vermilion.
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| Q: Why a public charity and not a private foundation? |
| A: Many people today who have accumulated wealth and who now wish to be involved in truly significant charitable giving, seek to establish a private foundation in the family or business name. |
However, the establishment of a Charitable Fund through Community Foundation of Acadiana, offers distinct administrative and tax advantages while preserving the opportunity for donor involvement and recognition. The key benefits of a Named Community Foundation of Acadiana fund include: flexibility, convenience, the highest level of tax benefits available, broad community impact, and cost effectiveness.
A fund at Community Foundation of Acadiana is easy and inexpensive to establish. In contrast, a private foundation requires a donor to create a new organization and apply for tax-exempt status, and the private foundation incurs excise tax and legal, accounting and audit expenses.
A gift of cash to a fund at Community Foundation of Acadiana allows a tax deduction of up to 50 percent of a donor’s Adjusted Gross Income (AGI); a gift of cash to a private foundation only allows the donor to deduct up to 30 percent of AGI.
By creating a fund at Community Foundation of Acadiana, a donor may deduct gifts of most appreciated property at fair market value, up to 30 percent of the donor’s AGI. A gift of appreciated property to a private foundation is limited to a 20 percent of AGI deduction.
No tax is imposed on the investment income of a Community Foundation of Acadiana fund because it is a public charity. By contrast, a private foundation pays up to a 2 percent federal excise tax on its net invested income and realized gains.
A private foundation must annually distribute 5 percent of its net investment assets; Community Foundation of Acadiana has no minimum distribution requirements.
There are fewer restrictions imposed on a Community Foundation of Acadiana fund. Strict regulations, however, govern private foundation, especially with regard to self-dealing and the control of voting stock. Further, a private foundation may not make or keep certain types of investments. It is difficult and often impossible to gift closely held stock to a private foundation because of the self-dealing rules.
Upon the death of the donor, funds in a community foundation will continue to be used in accordance with the donor’s wishes, while there may be a considerable shift when heirs or future trustees take over a private foundation.
For more information, you and your legal and financial advisors should see www.communityfoundations.net.
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