FREQUENTLY ASKED QUESTIONS:
- What is philanthropy?
By definition, philanthropy means to be charitable for the betterment of mankind. Philanthropic or charitably minded individuals, families, businesses and organizations are able to provide a stable and lasting resource for the ongoing support of the Brookings community and surrounding area. Philanthropy need not be defined solely in terms of the size of any gift. The Brookings Foundation will work to offer charitable giving options for all who wish to invest in our communities.
- What is a community foundation?
A community foundation is a public charity established to serve specific charitable interest or charitable interests in a designated geographical region. The community foundation invites donors to build endowment funds in support of its mission and/or holds funds for specific charitable organizations that serve community needs. Donors are able to designate which organizations will benefit from their gift or they may make an unrestricted gift in support of the overall mission of the Foundation. Since all funds are invested, the endowment funds continue to grow so that over time more and more charitable causes will be able to benefit from the donors' gifts.
- Are there other benefits of establishing a fund with the Brookings Foundation?
Yes! Here are several more reasons and benefits of working with the Brookings Foundation.
- Public accountability in our reports certified by independent auditors that our funds are being used for charitable purposes
- Flexibility to create a fund tailored to your charitable interest
- The deduction for cash contributions that exceed 50% of your adjusted gross income may be spread over five additional years to get the full deduction.
- Sound financial management
- Protection and fullfillment of donor intent
- Access to our professional staff for guidance on charitable giving
- Focus on our community and geographic area's needs as well as the flexibility to make a difference beyond our local area.
- Potential savings on administrative, investment management, and grant activities, since funds are combined into larger pools.
- Fewer restrictions and less paperwork than with private foundations
- No capital gains taxes on gifts of appreciated securities or property
- Freedom to choose anonymity in order to minimize exposure and solicitation from other charitable groups
- Opportunity to receive public recognition for your generosity from the Brookings Foundation and set an example of stewardship for others
- Satisfaction of knowing your charitable interests will be supported for generations to come
- Is my gift to the Brookings Foundation tax deductible?
Yes. The Brookings Foundation is recognized by the U.S. government as a 501 (c)(3) non-profit organization. As such, all gifts to the Brookings Foundation are tax deductible to the fullest extent of the law. You will receive a written receipt to document your gift for tax purposes.
- Cash contributions are fully deductible up to 50% of adjusted gross income (vs. 30% with private foundations)
- The deduction for cash contributions that exceed 50% of your adjusted gross income may be spread over a six year period to get the full deduction
- No excise tax imposed (vs. 2% of net investment income for private foundations)
- Gifts of appreciated securities and/or property are deductible up to 30% of adjusted gross income (vs. applicable deduction of 20% for gifts of appreciated property to a private foundation) and may also be spread over a six year period to get the full deduction.
- Can I honor our family name through a gift to the Brookings Foundation?
Yes. Endowments, donor advised funds and special scholarship funds are frequently named after individuals or families. We can assist and advise you regarding the options that are most suitable for you.
- How does a community foundation differ from a private / family foundation? There are a number of major differences between a community foundation and a private or family foundation. Generally, a private or family foundation only makes sense for people who are willing and able to take on the high administrative costs and management responsiblities associated with this option. The benefits of working with a community foundation are numerous. They include:
- Cost Advantage: There are no out of pocket costs to establish or maintain a fund within a community foundation. Administrative and investment fees are kept low by pooling the funds within community foundations.
- Tax Advantage: There are no federal excise taxes owed (private foundations pay 2% of their net investment income). Also cash contributions are fully deductible up to 50% of adjustable gross income ) vs. 30% for private foundation) and contributions of appreciated property are fully deductible up to 30% of adjusted gross income (vs. 20%).
- Privacy Advantage: Donors may choose to remain anonymous. Anonymity allows donors to protect their privacy and avoid solicitation pressure from other charitable organizations.
- Payout Advantage: There is no requirement for an annual fixed grant payout (vs. private foundations where no less than 5% of its net asset value must be paid out annually to charity). This allows community foundations more flexibility in their grant-making activities.
- Administrative Advantage: Unlike private foundations, community foundations assume all administrative duties (i.e. record keeping, investigating grantee organizations, preparation of financial audits, etc.).
- Professional Advantage: Donors to community foundations have access to a professional staff available to answer questions and offer suggestions tailored to meet the donor's charitable intent.