Helping Successful Families

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End-of-Year Giving

Each year as the holiday season approaches, our thoughts turn to charitable giving — and these holiday gifts play a large role in the sustainability of many, if not most, charitable organizations.

This year, our world seems particularly upside down with a war in Europe, Covid (and long-Covid) still lurking, and a possible recession looming. The nonprofit community is already seeing a drop in gifts from individuals. Thus, we encourage you, our clients and friends, to be more intentional with your giving this year.

Here are some practical tips for end-of-year giving.
Don’t give cash. Or maybe, give cash last. Consider your other assets before you give cash. There can be many tax advantages to giving other assets such as stocks, life insurance, your IRA, and even art objects. Talk to your financial advisor.

Don’t wait until the last minute. If you’re giving out of a Donor Advised Fund, or if you’re giving non-cash assets, don’t wait until mid or late December, as these gifts can take some time to process.

Don’t give over the phone. Despite what they might say, you never know who is on the other end. If you’re interested, have them send you something in the mail.

Talk to your family at Thanksgiving. If the family is together around the dinner table at Thanksgiving, charitable giving can be a wonderful topic for engaging all ages and teaching the next generation about the importance of giving back.

Here are a few more issues to ponder.
Don’t be too restrictive.  Grocery prices are rising, and we’ve already seen a drop in small gifts to nonprofits.[1]  Consider a general operating gift to your favorite nonprofits. If they ask you to donate to a specific program, ask them if a less restrictive gift might be more helpful.

Focus. You’ll have more impact and gain greater fulfilment if you focus on a specific issue, problem, or community.

Immediacy. There are several areas that have immediate needs. If you care about reproductive health, climate change, long-Covid, and libraries, organizations that deal with these issues can benefit from your help right now.

Donor Advised Funds. If you don’t know about DAFs, you should. DAFs can be a very powerful tool for charitable giving. Ask your local community foundation or your investment advisor about how a Donor Advised Fund can help make your charitable giving easy and more effective.

No obligatory giving! Resist the urge to give those obligatory gifts to organizations you don’t know or don’t care about. Instead, give to whatever moves your heart or inspires your head. To turn away requests from organizations or issues you don’t really care about, memorize a phrase such as, “I’m sorry, X is not a good fit with my present interests,” or “I am glad to have supported X in the past, but there are other issues or organizations that need my support more this year,” or “That was a one-time gift in support of my friend’s leadership.”

Final thoughts.
Start soon, be focused, and be a little more intentional. Your favorite organizations and causes need you more than ever this year.

Enjoy your holiday season.



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The New York Times recently reported that one person established 76 fraudulent charitable organizations, all with the same address: a post office box in Staten Island.[1]  All of the organizations were approved as public charities by the Internal Revenue Service, and all the organizations had names similar to the names of prominent public charities.  One of the frauds was the American Cancer Society of Michigan, for example.  And, yes, this “Michigan” organization also had a Staten Island PO Box.

In our work with donors and family foundations, we often ask, “What due diligence was done on a past gift?”  Frequently, the response we get is, “We checked Pub 78.”  For you younger folks, IRS Publication 78 was once a gigantic book published by the IRS every year that listed every public charity in the U.S.

Today, instead of Pub 78, there’s an online Tax Exempt Organization Search database (sometimes called Select Check).[2]  There, you can easily check an organization’s public charity status, or find out which organizations have had their status revoked.  (A nonprofit may have an exemption letter to show you, but the status may have been revoked due to a lack of reporting.)

Checking public charity status is not enough.  We’ve known for years that the charitable section of the IRS was woefully underfunded.  As this incident reveals, it is unable to do the most basic vetting necessary to ferret out frauds requesting public charity status.  Don’t get caught, like the Charities Aid Foundation of America, which sent more than $3,000 to several of these fraudulent organizations.

If you have a board member or a family member who wants to send $1,000 to an organization you’ve never heard of, go ahead and look it up in Select Check.  But making a personal visit is obviously the best way to ferret out imposters.  If that isn’t possible, consider the following actions that can help uncover fraud:

Ask for a list of board members, with affiliations.

Ask to see the latest certified financial audit.

Check the organization’s website.

Ask for a copy of a random policy that any legitimate nonprofit would have:  DEI, conflict of interest, etc.  Any legit organization should be able to provide these items within 24 hours.  If not, there may be an issue.

One important caveat:  Small neighborhood organizations may not have all these items and may not be able to quickly respond.  But they, too, may be deserving of support.  What to do?  Ask for a visit.

Don’t be sloppy.  A little due diligence will help you avoid fraudulent nonprofits and keep you out of the headlines.




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How Can Major Gifts Go Wrong? Our May 2022 Newsletter

Goldman Sachs has recently re-published a helpful report on making large charitable gifts, which prompts me to return to this issue once again.

In our work, we see donors often making serious errors when making major gifts. These errors can end up undercutting—if not damaging—the intent of their gift, particularly over the long term. Indeed, the larger the gift, the more damage
these mistakes can make. Today, most donors are inclined to attach extensive restrictions on the use of a major gift. We find in our work that smart donors find a balance between no restrictions and too many. Just as the media is full of stories of unrestricted gifts being used for things a donor may not approve of, there are also stories of extensive restrictions leading to difficult, if not impossible, situations.

Here are four good guidelines when contemplating a major gift:

  • Use a gift agreement drafted by your advisors, not the agreement offered by
    the charity.
  • Specify how any unused funds will be managed if, for example, the project you
    are supporting comes in under budget.
  • If you are considering a naming gift, consider putting a time limit on the naming
  • Consider whether your gift should also include support for operations and/or

For the Goldman Sachs article and more, view the full May 2022 Philanthropy Matters Newsletter here.

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Charitable Giving and COVID-19 in Northern Michigan

It has been nine months now since the pandemic began its furious disruption of life in Northern Michigan.  With more than 11,000 cases and 196 deaths, the virus has had a palpable impact on the region’s 17 counties.  The impact of COVID-19 has received considerable attention, but much of this focus has been on its impact on the for-profit sector.

Yet Michigan’s nonprofits have been disrupted as well, and they are fundamentally important to the quality of life in Michigan.  They make our communities a better and more enjoyable place to live (e.g., TART Trails, the State Theatre, and the Old Town Playhouse), but they also provide an important safety net for our most vulnerable residents (e.g., Goodwill Northern Michigan, Safe Harbor, and Manna Food Project).  Further, and no less important, Michigan’s 50,000 nonprofits employ 10.6 percent of the state’s nonfarm workforce.[1]


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Once more, I read about how donors are abusing Donor Advised Funds (DAFs).  Billions of dollars are locked in these funds, rather than going to charity during the COVID-19 pandemic — when nonprofits need these funds the most, critics say.  (Washington Post 6/24/2020 article)

Well, yes, that’s true. 

If you create and give to a DAF, and the money sits in the fund earning interest, you’re getting a tax benefit now — but the public benefit hasn’t occurred and may not occur for many years.  Further, it’s true that if the fund is managed by an investment firm, such as Fidelity or Vanguard, they’re the only ones benefiting while the funds sit unused, due to investment fees.  (If your DAF is housed at a community foundation, the fees go to help the community foundation support its city or region, so in that case the fees are giving back.)

This critique always focuses on the difference between these gifts going directly to charity versus the gifts going to DAFs.  The donor gets the same tax benefit, but the public benefit is delayed in the case of the DAFs. 

For a moment, let’s consider the difference between a DAF and a private foundation.  A donor who creates a private foundation gets a tax benefit at the time of the gift, although the benefits can be slightly less attractive than a gift to a public charity, depending on the gift.  The private foundation is required by law to give away 5 percent of its assets each year.  The organizations that manage DAFs report that their funds, taken as a whole, give away about 20 percent every year.[1]  Thus, DAFs — again, taken as a group — are getting money into the hands of the charities that need it at a much higher rate than the private foundations. 

Critics complain about the $120 billion “locked away” in DAFs.  The top 10 U.S. private foundations alone have assets of more than $150 billion. 

The critics of DAFS have a valid argument, and I hope the #HalfMyDaf campaign will be successful.  But those critics that exhort DAF holders to distribute more should be aware that the DAFs’ wealthier brethren (private foundations) don’t have the same obligation and presently distribute much less on a pro rata basis. 

(Note: I would be happy to send you copies of the linked articles if you’re unable to access them.)

[1] National Philanthropic Trust, The 2019 DAF Report.  

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