Ronald McDonald House Charities of San Diego

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Does Your Client Want to Look, Feel and Do Good?

By: Kristoffer Kelly—Vice President, BK Foundation Advisors

BK Foundation AdvisorsAs 2022 ends, many of your clients may be looking to maximize their charitable tax deductions in new ways and will seek your good counsel as to which organizations match their evolving philanthropic interests. For example, perhaps new circumstances to one’s health has fostered an interest in funding medical research. The act of making a simple charitable gift as a tax write-off seems less important than the ability to make greater impact towards a new philanthropic passion. In these situations, as an advisor, collaboration with other allied professionals and firms who specialize in the development of private, individual, and corporate foundations and grantmaking could be just the answer to help maximize your client’s philanthropy in the community.

A different approach to creating meaningful impact:
While creating the best giving options for clients, professional advisors and attorneys can recommend an array of options including Donor Advised Fund (DAF) or the establishment of private, family, or corporate foundations. DAFs are perfect for clients who want to make fast, easy grants to public charities and get a tax deduction for their appreciated securities, but a donor relinquishes control of the assets to the sponsoring organization, a concern for some philanthropists. The creation of private, family, or corporate foundations takes a little more investment in time and money to establish but allows for more control, philanthropic oversight and governance lasting well after a donor’s passing. In either case, while creating the best giving options, below are three ideas to help guide conversations:

#1: Look Good—Naming Rights

Making grants to celebrate your philanthropic legacy. Here in San Diego, you will see many buildings, museums, colleges, concert halls, libraries, schools, and hospitals that bear the names of some incredible philanthropists and their families who have transformed San Diego and at the Ronald McDonald House Charities of San Diego, names of many generous individuals and families adorn the facility; including the Great Room named for a generous gift from the Joseph Clayes III Charitable Trust.

#2: Feel Good—Connecting Your Passion

This is grant-making that emotionally makes the donor feel good about their gift.
The donor can experience their impact in action. An example of this is donating turkeys at Thanksgiving time or donating iPads and technology training to a school or to seniors in a low-income area. At the House volunteers can sponsor meal-service and experience the joy of philanthropy one family at a time. Everyone loves feel-good grants!

#3: Do Good—This is strategic, thoughtful, and impactful philanthropy with measurable outcomes that advance your client’s mission.

It is not just about writing a check. If you and your client want a longer-term commitment to community change, this should be your focus.

Working within the framework of “doing good,” conversations with families can lead to an encouraging discussion about intergenerational giving. Your main client may be entering the legacy phase of life and engaging their children and grandchildren in the grant-making process. This is a meaningful way to consider starting a family foundation. Through these conversations professional advisors can lay the groundwork for younger generations to grow and learn the joy of philanthropy. Navigating family members’ differing priorities to help define a mission, establish criteria around their passions and project-focused grantmaking is the definition of “doing good.”

Fostering intergenerational giving naturally creates a stronger bond between professional advisors, charity, and the family. Together, for the benefit of the community, meaningful philanthropy is made possible.

At BK Foundation Advisors our goal is to increase philanthropic giving locally, regionally, and nationally and for you to create a stronger bond between you and your clients. If you have the chance to build charitable legacies that enshrine their spirit of giving you, have a client who is more than just a client and will thank you for helping them build their legacy. No amount of money can buy that feeling of goodwill and intentional philanthropy and partnership you can have with your client while making the world a better place.

Kris Kelly—Kris Kelly
Vice President
kris@bkfoundationadvisors.com
Look Good, Do Good, Feel Good

Grantor Charitable Lead Annuity Trust

Provides income payments to a qualified charitable organization for a period of years, the lives of one or more individuals or a combination of the two; after which, trust assets are paid to the donor of the trust.

A power of attorney form that transfers ownership of stock.

Securities such as stock that are in certificate (paper) form.

Investments that have increased in value since the time of their purchase.

Testamentary means bequeathed through one's will.

A charitable bequest is one or two sentences in your will or living trust that leave to Ronald McDonald House Charities of San Diego a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

I give [insert amount, percentage of the estate, or 'the rest and remainder of my estate'] to Ronald McDonald House Charities of San Diego, Inc.

Federal Tax ID #95-3251490

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor-advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the House or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust (CRT) provides income to you, as the donor of the CRT, or to other named individuals, and does so each year for life or for a period not exceeding 20 years. The remainder of the assets go to your chosen charity.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the House as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the House as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the House where you agree to make a gift to the House and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.