As a successful entrepreneur or business leader, your career is dedicated to building profitable enterprises that benefit individuals and entire communities. What you may not realize is that people just like you are extending their talents into organized philanthropy — applying the principles of business management and wealth creation to the charitable sector.
Superstars of the business world are making philanthropy more effective, and you can join them by taking advantage of one of the most popular platforms for focused, results-driven philanthropy: community foundations.
The basics of community foundations
These are tax-exempt, charitable organizations created for those seeking philanthropic leadership and guidance. There are more than 700 such organizations in the U.S.
Business-directed donors are able to pursue social changes important to them and they can do it in the nonprofit arena, applying business methods in making charitable investments.
A great example is The Pittsburgh Foundation. It has grown significantly in recent years to report nearly $1.2 billion in assets due, in part, to the personal contributions of many of the region’s successful business leaders. A range of investment opportunities allow donors to chart performance indicators and degree of value-added based on criteria they can create.
Donors also appreciate that in many cases there is an expectation they do more than simply write a check. The philanthropist offers work/life experience, business skills, connections and outside perspective as much as funding. And the community foundation coordinates those opportunities.
Down to the nuts and bolts
The Pittsburgh Foundation, for example, works closely with clients like you who are interested in developing strategies for their giving.
Here’s a brief overview of the advantages of the basic charitable investment account, known as the Donor Advised Fund, which can ensure assets are well-managed, the grant making strategic and planning is backed by expert advice:
- Flexibility: You determine what organizations you truly are passionate about and where to donate, and the DAF acts as a holding cell, allowing you to fund the account while you determine your long-term philanthropic goals and the schedule.
- Investable assets: The funds in your account are invested by expert managers, who work to grow the assets and free you to concentrate on giving.
- Tax benefits: You receive immediate tax benefits on the amount donated into the fund. Community foundations are equipped to accept a variety of assets that qualify, including highly appreciated securities.
- Giving with future generations in mind: You can set up funds that provide an income stream to charity in perpetuity. You can name a successor adviser when you are no longer involved. Many of our donors use their fund to introduce younger family members to thoughtful philanthropy, and thereby preserve the legacy.
Unique gifting: You can add alternative gifts such as artwork and oil and gas rights to your fund. While some donors may have complicated assets, the DAF provides added flexibility when funding the actual account.
Jennie Zioncheck is the Director of Development at The Pittsburgh Foundation, one of the nation’s oldest community foundations, is the 13th largest in the U.S. Through the Foundation’s Center for Philanthropy, Jennie works with professional financial advisers to establish philanthropic legacies and secure tax benefits for their clients.