GRCF 2012 Guide for Giving

7/31/2019 GRCF 2012 Guide for Giving

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A Guide to Gvg


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Prompt, peroal ervce. The Community Foundation strives to make your

philanthropy uncomplicated and easy to understand. Meetings are held at your

convenience, where you are most comortable and as oten as you need to talk.

Your gt wll be ued wely.We keep administrative costs low by pooling

contributions and investments. Grand Rapids Community Foundation is a public

charity, and all donations qualiy or the maximum available tax deduction or

charitable contributions.

You have may gt-gvg opto. How and what you give

depends on what you want to accomplish with your donation.

Our development sta is always happy to sit down with you and

your proessional advisor to discuss the best giving option or you.

Your gt wll beeft the commuty orever.With the power o

endowment, a git made now will benet the community or

decades to come. Git use can be narrow or more broad, depending

on your desires.

Your gt ecure.Grand Rapids Community Foundation manages

its investments or total return. Each year we publish an annual

report with an independent audit o our nancial position, a

statement o activities, and lists o gits and grants.

Although community needs and organizations will change, funds that you endow at

Grand Rapids Community Foundation will be held in your name forever.

Since 1922, thousands o people like you have chosen to give to causes

they care about through Grand Rapids Community Foundation. Giving to

the Community Foundation has many benets.

Your Commuty. Your Foudato.

Your Dream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5

Fun ds o r C ommu ni ty Go od . . . . . . . . . . . . . . . . . . . . . . 6

Fi el d o In te re st Fu nd . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

S c h o l a r s h i p F u n d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

S uppo rt in g O rgan izat io ns . . . . . . . . . . . . . . . . . . . . . . . . 9

Nonprot Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

D on or A dv is ed F un d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0

Your Gt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-12

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Cl os el y H el d S toc k. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Stocks, Bonds, Mutual Funds. . . . . . . . . . . . . . . . . . . . .14

Real Estat e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

401k an d I RA Ac c o u n ts . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Lie Insurance, Retirement Accounts .. .. . . .. . . .. .16

The Beeft o Gvg . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Ch ar it ab le B eq ue st s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8

T he Me tz Le gacy So ci ety . . . . . . . . . . . . . . . . . . . . . . . . 19

C hari tabl e Gi t Ann ui ty . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Ch ar it ab le T ru st s . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1- 23

Remainder Interest in Property. . . . . . . . . . . . . . . . . . .24

Wrtg Your Ethcal Wll . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5

Your Foudato. . . . . . . . . . . . . . . . . . . . . . . . . Back cover

Your gt

Your dream

Your legacy

Contents

Photo the Gvg Gude

We ound the images o our community and its people on Flickr, an online photography

sharing site. All the photographers are Grand Rapidians and most o the images were taken in

Kent County. We think the images are un and clearly depict what makes this place special.

Cover: Paul Jendraisiak/GRNow.com

Inside cover: Steven Depolo

Page 4: Terry Johnston

Page 5: Paul Jendrasiak/GRNow.com

Page 6: Yolanda Gonzalez

Page 7: Steven Depolo

Page 8: Steven Depolo, Matt Stangis

Page 9: Nate Umstead

Page 10: Terry Johnston, Steven Depolo

Page 12: Clockwise rom top let:

Stacy Niedzwiecki, Yolanda Gonzalez,

rest by Steven Depolo

Page 14, 16, 17, 18, 22, 23 and 25:

Stacy Niedzwiecki

Page 26: Nate Umstead

Graphic design: James Falk

Illustration: Yolanda Gonzalez

BEnEFiTs

Localcontrol

Flexibility

Permanence

Charitableimpact

Economyofscale

Publicaccountability

Taxadvantages

Commuty or Prvate Foudato? . . . . . . . . . . . . . 2


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Commuty or Prvate Foudato: Whch Opto Rght or You?

Theworkofaprivatefoundationhasbecomeoverwhelming.

Thenextgenerationisuninterestedoryouhavenoheirs,

butyouwishtocreateandpreservealastinglegacy.

Administrationofthefoundationseemstoocostlyor

cumbersome.

Youoryouradvisorsidentifyataxplanningneedfor

thehigherpubliccharitytaxbenets.

Youwanttoensurealocalfocusforgrants,butheirs

havemovedoutofthecommunity.

Assetsinthefoundationhavedeclinedtoanextent

wherethecostsandannualpayoutrequirementmakeit

impracticaltomaintain.

Youbecomeconcernedaboutexposingyourselftoliability,excisetaxesandpenaltiesassociatedwithprivate

foundations.

Youareinterestedintappingintocommunitygrantmaking

expertisesothatyourcharitycanmakeabiggerimpact.

When people want to make a dierence in their community and create a amily legacy, they have many options,

rom creating a private oundation to the public-charity alternatives oered by a community oundationnamely a

Donor Advised Fund or supporting organization. While private oundations may allow or greater donor control, the

administrative requirements and operating costs can be substantial. The ollowing chart compares eatures o Donor

Advised Funds, supporting organizations and private oundations.

PriateFondation

SpportingOrganization

Tax Deductibility Ease of Establishment Costs Grantmaking

COMPARING THE OPTIONS

DonorAdisedFnd

Deduct 50% AGI or cashgits; deduct 30% AGI or

gits o long-termappreciated securities, realestate and closely held stock

Simple and quick toestablish; could be done

in one day

Pooled administration,annual ees; no start up

costs

No minimum annualpayout; philanthropic

services provided bythe CommunityFoundation

Deduct 50% AGI or cashgits; deduct 30% AGI orgits o long-term appreciatedsecurities, real estate andclosely held stock

Several months toestablish, but could startwith Donor AdvisedFund i timing is an issue

No minimum annualpayout; philanthropicservices provided bythe CommunityFoundation

Competitiveadministrativeees; some start uplegal/fling costs

Deduct 30% Adjusted GrossIncome (AGI) or cash gits;deduct 20% AGI or gits olong-term appreciatedsecurities; deduction limitedto cost basis or gits o realestate and closely held stock

A ew months toestablish

5% minimum annualpayout required

Typically, more costly toset up and maintain;1-2% excise tax on netinvestment income

Conerting a Priate Fondation to a Commnit Fondation Fnd

Though many people enjoy the experience o giving or years through a private oundation, sometimes private

oundations run their course. In these cases, Grand Rapids Community Foundation provides a good option or the

transer o undsenabling you to terminate your private oundation yet continue its charitable mission.

People with private oundations most oten consider converting to a Community Foundation und when they

realize that successor trustees living outside Grand Rapids might have less local ocus with their grantmaking.

Your Donor Advised Fund at the Community Foundation will continue supporting causes and nonprots here in

Kent Countyorever.

The philanthropic giving options at Grand

Rapids Community Foundation are tailored

to you. For some donors an unrestricted

git to the Fund or Community Good

meets their needs. Donor Advised Funds

give donors more involvement in

grantmaking and provide an excellent

alternative to private oundations. Other

options include scholarship, Field o

Interest and nonprot unds. All gits are

endowed and the community will benetrom your git orever.

You may use lietime gits and bequests

to create a separate personal endowment.

You may set up the und in your name,

a loved ones name or anonymously.

I you are willing to share the story o your

git, our sta will meet with you to talk

about your amily or personal history, your

values and your philanthropic goals. Your

name and your story will become part o

our permanent archives, preserved and

retold or generations to come.

Whatever your wishes, your hopes or your

dreams or the uture o your community,

a und at Grand Rapids CommunityFoundation can make them a reality.

Whether you have a rm idea o what you hope to accomplish with

your philanthropyor an idea thats just taking shapeGrand Rapids

Community Foundation can help you achieve your philanthropic goals.

le volvemet more volvemet

unrestricted eld o interest advised scholarship designated

TERMINATIONS MAy HAPPEN wHEN:

Your Dream


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I youre not already sure what youd like to

accomplish with your giving, ollow these

fve simple steps to clariy your goals.

Defe Your Pao

Whatissuesorcausesdoyoucareabout?

Whatorganizationsdoyoucurrentlygiveto?

Wheredoyouvolunteer?

Whenyoumakeacharitablegift,whatgivesyou

thegreatestsatisfaction?

Create Your Pla

Ifyoucouldchangethreethingsinyour

community,whatwouldtheybe?

Doyouprefertofundbuildings,operationsorprojects?

Howmuchinvolvementdoyouwantwiththe

causesyousupport?

Whatareyourfamilypriorities?

Determe Your Gvg Level

Whatareyournancialobjectives?

Whatisyourtaxsituation?

Whatisyourowncharitablegivingcomfortlevel?

Doyouwanttogiveduringyourlifetimeorafter?

implemet Your strategy

Takeadvantageofourphilanthropicservices,

ideasandadvice.

Seekinformationaboutneworadditionalcharitable

opportunitiesfromtheCommunityFoundation.

Prioritizetheneeds,programs,andopportunities

ofyourselectednonprots.

Determinebestgivinginstrumentstoaccomplish

givinggoals.

Makegiftsorgrants.

Revew ad Update Your Pla

Workingwithourphilanthropicservicesteam,

evaluateresults:

Didyourgiftsaccomplishwhatyouhoped

theywould?

Hasyournancialorfamilysituationchanged?

Aretherechangesintaxlawrelevantto

yourgiving?

What areYour Dream?supportg Orgazato

A supporting organization is an excellent

alternative to a private oundation, with only a

raction o the administrative responsibilities

and lower costs.

noproft Fud

Help provide a permanent source o income to

meet the uture needs o a designated charity.

Door Adved Fud

Recommend annual grants or the causes you

care about most. I desired, design a amily

grantmaking plan that includes the next

generation.

Fud or Commuty Good orUretrcted Fud

Meet the needs o a changing community by

providing maximum exibility or uture

grantmaking.

Feld o iteret Fud

Ensure permanent support or a special area o

interest while allowing exibility or the uture.

scholarhp Fud

Improve the lives o students with a permanent

source or higher education unding.

Achieving YourDream

Memoral

You may establish any o the above unds to

honor the memory o a loved one.


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Herb ad Dor Vader Meywere long-time supporterso Grand Rapids CommunityFoundation. Herb served on the

Board o Trustees o the CommunityFoundation in the 1980s, and he and

Dori made annual gits each year tothe Fund or Community Good.

Ater Herbs passing in 2004, Doricontinued her support.

A battle with multiple sclerosis and

remission gave Dori the impetus tostart a Field o Interest Fund that

would bear the Vander Meys namelong into the uture. The Field o

Interest Fund was designed to befexible, yet specic to a cause she

and Herb cared greatly about. Grantsrom the Herbert and Doris Vander

Mey Fund or the Treatment o

Neurological Diseases will providegrants to organizations that will

help people with neurologicaldiseases and medical research in

the eld.

As someone who experiencedserious illness and disability

and also experienced the miracleo total remission, I am

compassionate toward peoplewith illnesses like mine. I

especially care about childrenwith disabilities. My ability to

give is a git rom God, and wemust give as the Lord blesses us,

Dori said.

Feld o iteret Fud

A Field o Interest Fund is built on a git rom an individual or amily to

address a particular area o community lie that captures the imagination

or carries personal meaning, such as the arts, scientic research, animal

welare, education, youth programs or any other charitable interest area.

We honor your wishes orever by annually awarding grants rom the und

to organizations and programs in the named interest area. When we

approve a grant to an organization, we make the git in the name o

your und.

Field o Interest Funds benet

rom the oversight o our

grantmaking sta and volunteers

who award grants rom your und to

organizations and programs making

a dierence in your interest area.

Field o Interest Funds are exible

enough to und a variety o

organizationseven as needs

change over timeand yet

ocused enough to create or you

a highly personal and permanent

charitable legacy.

BEnEFiTs

Createalastinggiftduringyour

lifetimeorafteryourdeath,inoneor

morespecialinterestareas.

Receiveanimmediatetaxdeduction.

Addtoyourfundduringlifeoratdeath.

Createagiftthatsupportsyourspecial

interestandisexibleforthefuture.

Fud or Commuty Good

A Fund or Community Good is an unrestricted und that allows

Grand Rapids Community Foundation to help the community address

unexpected and changing needs. Community Good unds target six

broad grant areas:

arts and culture

community development

education

environment

health

human services

A Community Good und is a good choice i you value exibility in

helping uture generations.

Community Good unds allow the Community Foundation to seek

long-term solutions to problems such as hunger, homelessness, child

welare and public education. They also support building projects thatbenet the entire community.

Contributions may be acknowledged in many ways, including

publishing contributors' names in our annual report, ensuring that

your nameor the name o a loved onewill always be remembered

and linked with philanthropy. Establishing a Community Good und

can be the rst important step to creating your own legacy o caring.

Alla ad Clauda Carlostill remember what it waslike to live within a budget. They

went on picnics and to the lakewith their children. They borrowed

books rom the library.They also remember the

lean times as very goodtimes and believe that

they live almost as

simply as they did25 years ago. Whenyou dont have a lot,

you dont seem to needas much, said Claudia

Carlson. But theres

no point in justaccumulating wealth,

said her husband, Allan.

True to their words, their git

o $1 million to the Fund orCommunity Good was received

at Grand Rapids CommunityFoundation in December 2005.

In 1998, the Carlsons established

a Donor Advised Fund at theCommunity Foundation. Their

2005 git was their second majordonation to the Community

Foundation. TheCommunity Foundation

has proved itsel responsiblewith our unds in the past,

and we trust them to do

whats best with this git,Allan said.

The Carlsons ownEPS (Engineered Protection

Systems), a home andcommercial security

company.

Createalastinggiftinyourname

orinthenameofalovedoneduring

yourlifetimeoratdeath.

Helpmeetthefutureneedsofa

changingcommunity.


Addtoyourfundduringlifeor

atdeath.

BEnEFiTs

Your Dream


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noproft Fud

During the Great Depression, the Clinic or Inant Feeding helped make sure

babies didnt succumb to malnutrition or starvation. The clinics mission

touched the heart o Mrs. John Wood Blodgett, one o Grand Rapids

Community Foundations original trustees. In her will, Minnie Blodgett let a

bequest to Grand Rapids Community Foundation and designated it or the

Clinic or Inant Feeding.

Today, the Clinic or Inant Feeding no longer exists. But because Mrs. Blodgett

entrusted her bequest to the Community Foundation, her legacy and

intention endures. Her und, Minnie C. Blodgett Clinic or Inant Feeding,

continues to make grants to improve the care o children.

I you want your git to support specic charitable organizations, you can

establish a nonprot und. Your git becomes a permanent und o theCommunity Foundation, which will support the organization as long as it

exists. I it ever closes its doors, the Community Foundation will use the und

to support programs with similar goals.

When you establish a nonprot designated und, it also opens the door or the

designated nonprot organization to create a planned giving program by

which other donors in the community can leave estate gits that support the

nonprot. I desired, the nonprot may also encourage gits to the und rom

its current donor base.

It is important to remember when designating your und that it will last

orever. The less restrictive it is, the m ore it will help meet the unexpected

and changing needs o upcoming generations.

supportg Orgazato

Established by an individual, amily or business with a git o at least

$1 million, a supporting organization is a separate nonprot entity that

operates under Grand Rapids Community Foundation and qualies as

a public char ity. A supporting organization is an excellent alternative to a

private oundation, with ewer administrative responsibilities and lower costs.

You select some board members, maintain personal involvement and

support cherished causes. We provide an array o philanthropic and

administrative services to make the giving experience simple and enjoyable.

Createaseparatecharitablevehicle

asanexcellentalternativetoaprivate

foundation.

Enjoypubliccharitytaxstatusby

maintainingacloseconnectionto

GrandRapidsCommunityFoundation.

Participateinnamingaboardof

directors,whichmayincludefamily

members.

Avoidthe5%annualdistribution

requirementofprivatefoundations,

allowingforgrantsofanysizetobe

madeatanytime.

Provideanavenueforfamilymemberstoengageinphilanthropyfor

generationstocome.

AccesstheexpertiseoftheCommunity

Foundationsprofessionalsta.


Paynoexcisetaxoninvestmentearnings.

Createalastinggiftinyourname.

Helpmeetthepresentandfuture

needsofadesignatedcharity.

Addtoyourfundanytime.

Ensurethatifacharityceasestoexist,

yourgiftwillcontinuetosupport

similarcauses.

BEnEFiTs

BEnEFiTsDareather Greer was the rstperson in her amily to earn acollege degree. Ater graduatingrom high school, she went on to

Western Michigan University andreceived her bachelors degree.

From there it was a masters incurriculum and teaching rom

Michigan State University. Her rst,last and only job was with the

Kent Intermediate School District(KISD). I taught high school

students business subjects, whichincluded everything rom how to

operate a mimeograph, key punchmachine, or an IBM Selectric

typewriter to a word processor,she said with a laugh. From 1972

until she retired in 2005, shededicated hersel to teaching

young people the undamentals o

business. Business makes theworld work, and all o it intrigues

me, Dareather said. I had ateacher who inspired me, a typing

teacher, actually. He taught me totype on a manual typewriter

without letters on the keys! Hegave me the love o business

education.

As part o her retirement andsubsequent estate planning, she

created a scholarship in her nameat Grand Rapids Community

Foundation or Arican Americanemales. In high school, I knew I

wouldnt be able to attend college,because my parents didnt have

the money. I ound out aboutgrants and student loans that

helped pay or college, and Idecided to pursue my dream o

becoming a teacher. I want othersto be able to ulll their dreams

also, she said. Her agreementwith the Community Foundation,

species that scholarshipapplicants must show they have

been active in multiple communityservice projects.

scholarhp Fud

Higher education is seen as one o the surest paths to increased opportunity.

Unortunately, many people who could benet the most rom a post-secondary

education are least able to aord it. Scholarship unds help them on their

path to higher education. Grand Rapids Community Foundation holds unds

or aspiring artists, engineers, musicians, pilots, teachers and others.

Applications are available online, and awards are based on a competitive

process, and guidelines set by you. Selection criteria may include academic

achievement, extracurricular activities, and a statement o the applicants

personal aspirations, goals and nancial need. Advisory committees o

knowledgeable community members help screen and select candidates. They

make recommendations to the Community Foundations Board o Trustees.

You or a member o your amily may participate in the scholarship selection

process i you wish.

Like other Grand Rapids Community Foundation unds, scholarship unds are

endowed and may be named to honor loved ones. Community Foundationsta manages all details o awarding scholarshipsrom announcing

availability to processing applications to writing checks.


orinthenameofalovedoneduring

yourlifetimeoratdeath.

Helpstudentsreceiveacollege

educationorotheradvancedtraining.

Participateinthescholarshipselection

process,ifyouwish.


Addtoyourfundduringyourlifetime

oratdeath.

BEnEFiTs

Your Dream


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Your Dream

Tom ad Mcke Fox are well known in the Grand Rapidsbusiness community. Tom Foxs days as owner o FoxJewelers made him a legend in retailing. Strong supporterso the West Michigan area, Tom and his wie, Mickie, have

supported countless local organizations. Their decision toestablish a Donor Advised Fund at the Community Foundation

with appreciated stock ensured that their commitment tothis community will last or generations.

Weve always been extremely proud o being part o the

Grand Rapids community, and were now at the point in ourlives where we can give back to this community in a signicant

way, Tom said. As the Foxes discovered, a Donor Advised Fundat Grand Rapids Community Foundation is simpler and less

expensive than establishing and managing a

private oundation. They recommend how thespendable portion o their und will be usedand, each time a grant is approved, the grantee

receives a letter indicating Tom and Mickiemade the git. The Foxes know their und will

increase in value over time and continue tosupport the causes they care about orever.

Door Adved Fud

A Donor Advised Fund at the Grand Rapids Community Foundation is

simple to establish and operate. The Community Foundation is responsible

or ensuring that legal requirements or investment, distributions and

payouts are met, allowing you to easily manage your charitable giving

without the burden o running a private oundation.

With a Donor Advised Fund, you recommend grants to any charity that

meets IRS guidelines, while we handle administrative details. Our grant

allocation procedure protects you by ensuring your grantees meet the

legal standards or charitable intent. Under IRS regulations, our Board o

Trustees approves all grant recommendations.

Donor Advised Funds also allow uture generations to participate as

advisors to the und. Unlike private oundations, which are required to

distribute 5% o the assets annually, Donor Advised Funds carry no

minimum annual distribution requirement.

Ater the last und advisor passes away, the Donor Advised Fund retains its

name thus preserving your legacy as a Field o Interest, Scholarship,

Designated or unrestricted und that honors and supports your avorite

causes orever.


orinalovedonesname.

Establishafund,whichislikehaving

aprivatefoundationwithoutthe

administrativeworkandexpense.

Participateinthegrantmakingprocess.

Involvefamilymembersinthegiving

experience.

AccesstheexpertiseoftheCommunity

Foundationsprofessionalsta.

Addtoyourfundatanytime.


BEnEFiTs

support the arts and social enrichment help students to succeed in school

promote economic prosperity

help people live healthier livessustain a healthy ecosystem

create a vibrant neighborhood

Your gt can


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Cah

Cash is the simplest git to give. You can

combine multiple cash gits to establish a und

at the Community Foundation.

Cloely Held stock

Receive a deduction or the appraised market

value, avoid capital gains tax and buy back at

new cost basis, i you choose.

stock, Bod, Mutual Fud

Receive a deduction or the ull air market value,

and avoid paying tax on your capital gain.

Real Etate

Receive a deduction or the appraised

market value.

401k ad iRA AccoutMaximize value by avoiding income and

estate taxes.

Le iurace Polce

Receive a deduction or the computed current

value o your paid-up policy or premium

payments.

Your GtCloely Held stock

I you own closely held stock in your business, you may choose to

contribute it to Grand Rapids Community Foundation. Giving it to acharitable organization may oer you and your company several

advantages. First, youll receive a charitable deduction or the appraised

air market value. Youll also avoid tax on the capital gain. And, at a later

date, the company may redeem the stock, or the company employee

stock ownership plan or another shareholder may buy the stock back

at its air market value.

Takeacharitabledeductionfor

theappraisedmarketvalue,notthe

costbasis(originalinvestment).

Avoidcapitalgainstax.

Buybackorredeemthestock.

Reducethesizeofyourestate.

Ho to Make a Git or 59 Cents on the Doar Appreciated

Cash Propert

Current air market value o git $10,000 $10,000

Cost basis $10,000 $1,000Income tax savings $2,800 $2,800

(assuming 28% income tax bracket)

Capital gains tax you save by giving stock $0 $1,350

(assuming 15% capital gains bracket)

Net cost o git $7,200 $5,850

With either a git o cash or securities, your charitable deductionwould be the same$10,000. In the 28% bracket, your net costwould be $7,200. But i you give securities that you purchased or$1,000, you could also save $1,350 in capital gains tax. The net costo the git: just $5,850.

THE ADDED DIvIDENDS OF GIvING SECuRITIES

BEnEFiTs

Cah

A cash git is the most popular type o charitable git because o its

simplicity. With a git that meets our und minimum, you can establish

a und o your choice that will begin generating income or grants or

scholarships immediately.

Enjoyeaseofgiving.

Giveasmuchoraslittleasyou

choose.

Combinemultiplegiftsovertime

toestablishafund.

BEnEFiTs

Your Gt


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Marin Stah

Alegendary gol pro, Hollywood lmmaker and Grand Rapids business leader,Marv stahl was also a civic-minded philanthropist. When he and his wie,Dottie, could no longer enjoy their beloved summer home on Baldwin Lake, they

donated it to Grand Rapids Community Foundation. The home was sold, with proceeds

establishing the Marvin Stahl Fund. Since 1987, the und has substantially increased invalue while awarding grants to many community programs and services.

401k ad iRA Accout

Assets held in 401k and IRA accounts require special consideration in

your nancial and estate planning.

The law requires income tax to be paid on any withdrawals rom the

accounts, which may diminish its value or you and your heirs. I you

leave retirement assets to amily members in your estate plan, an estate

tax may be levied as well. This double taxation could signicantly

decrease the value o the asset or your heirs.

By naming the Community Foundation a beneciary

o a retirement asset during your lietime, you can

remove it rom your estate, preserve more o its valueand receive a ederal deduction or the git.

John Gi and Rita wiiams

Thecommunityisourresponsibilityanditshouldbe

ourrstpriority.Weallhaveadutytothecommunity.

Rita Williams

Your Gt

Maximizeassetvalue.

Minimizeestatetax.

Receiveafederalincometax

deduction.

Real Etate

Whether it be a home, cottage, business property or undeveloped land,

Grand Rapids Community Foundation may be able to help you turn an

asset into an excellent charitable git.

We can accept the git outright or show you how a charitable trust can

be used to convert your asset into a git that also produces an income.

Because each git o real estate is unique, a Community Foundation sta

member would be happy to meet with you to discuss the logistics o

making such a git.

Basecharitabledeductionsonthe

appraisedfairmarketvalue,notthe

originalinvestment.


Receivesubstantialtaxsavings.


Relieveyourheirsoftheburdenof

sellingtheproperty.

BEnEFiTs

BEnEFiTs

Receiveacharitablededuction

forthefairmarketvalue,notthe

originalinvestment.


Nominimumisrequired.

Multiplegiftscanbecombinedto

establishafund.

Realizesubstantialtaxsavings.


A Git o Appreciated Stock

Dr. Mary Appeltaced the human drama o lie anddeath every day in an operating room. A practicinganesthesiologist (now retired), Dr. Appelt saw rsthandthe benets o philanthropy on all levels o society.

Whether we give to provide an underprivileged student acollege education or to create a state-o-the-art neonatal

center, its very important to give back to the communitythat has supported and rewarded us, she said.

Like many investors, Dr. Appelt was aced with paying

capital gains and income taxes on some highlyappreciated stocks she wanted to sell. She believed that

giving her appreciated stocks to the CommunityFoundation oered a more signicant social benet, while

helping her achieve her charitable and nancial goals.

It pleases me to know that the git I made to Grand

Rapids Community Foundation will continue to generate

revenue that can be reinvested in our community,Dr. Appelt said.

Dr. Appelt chose to direct her git to the Fund orCommunity Good. I am condent that the Community

Foundation will use the income rom my git to helpaddress this communitys most pressing needs, she said.

stock, Bod, Mutual Fud

Giving gits o long-term appreciated property in the orm o stocks,

bonds or mutual unds will provide greater tax benets than a cash git

o equivalent value, especially i they have a low cost basis.

You will receive a charitable deduction or the ull market value o your

propertyeven i you initially bought it or ar less. You will also avoid

capital gains tax, money youd have to pay i you liquidated the property.

BEnEFiTs


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16 17

Claimacharitabledeductionon

thecomputedcurrentvalueofyour

paid-uppolicyortaketaxdeductions

onannualpremiums.

Le iurace Polce

Giving a lie insurance policy is an inexpensive way to make a substantialcontribution to Grand Rapids Community Foundation. Many people nd in

later years that they dont need all the insurance they did when they were

younger. I you own unneededpolicies, you may name the Community

Foundation as sole beneciary and transer ownership. Once you do that,

you are immediately eligible or a charitable tax deduction on the

computed current value o your paid-up policy. I you are still making

annual premium payments, those payments will also qualiy or a

charitable deduction. (Those premiums are paid directly to the Community

Foundation, which in turn pays the insurance company.)

Option 1Simply list Grand Rapids CommunityFoundation as the beneciary when

purchasing a new lie insurance

policy, or execute a simple change o

beneciary orm on a current policy.

Upon your passing, your estate

receives a charitable deduction, and

the death benet passes to the

Community Foundation tax ree.

You may also name the Community

Foundation as contingent beneciary

i your primar y beneciary passes

away beore you do.

Option 2You may donate an existing,paid-up lie insurance policy to

Grand Rapids Community Foundation

or purchase a new paid-up policy in

the Community Foundations name.

As long as all rights o ownership

are transerred to the Community

Foundation, you should receive a

current income tax deduction equal

to the lesser o your basis in the

policy or the policy value.

Option 3You may transer an existinginsurance policy or purchase a

new policy on your lie and name

Grand Rapids Community Foundation

as the owner. Every year you d onate

sufcient unds to the Community

Foundation to pay the annual

premiums. These contributions are

tax deductible, subject to individual

limitations. I you stop providing

these unds, the Community

Foundation reserves the right to

cash in the policy.

Three common methods allow you to turn

lie insurance policies into a charitable git

BEnEFiTs

Gits to Grand Rapids Community Foundation come in all shapes and sizes. Cash,

securities, closely held stock, business interests, real estate and private homes have been

used to establish charitable unds. Whatever the asset, each and every git is an important

contribution to the Community Foundations work.

we encorage o to make

an appointment ith or

deeopment staf to tak

aot or ojecties and

or sitation. The ma e

ae to ofer sggestions o

hae not considered or

knon aot.

Note:Contributionsinexcess

ofthepercentagelimitationmay

becarriedoverforcharitable

deductionpurposesintheve

succeedingtaxableyears.The

charthereillustratesonlysome

oftheapplicabletaxtreatments.

Pleasereviewyourgivingoptions

andrelatedtaxbenetswithyour

professionaladvisor.

CHARITAblE INCOME TAx DEDuCTIONS FOR INDIvIDuAlS

Tpe o Contrition Amont Percentage o

that can e Adjsted Gross

dedcted Income that can

e dedcted in

one ear

Cash Cash Value 50%

Ordinar income propert, such as Cost Basis 50%

inventory, depreciable property,

agricultural products, oil and gas property,

Section 306 stock, original issue discount

debt instruments, art work by its creator

and other property, the sale o which

at air market value would yield

ordinary income

Short-term capita gain propert Cost Basis 50%

(held less than 12 months), such as stocks,

bonds and other capital assets, the sale

o which at air market value would yield

short-term capital gain

long-term capita gain propert Fair Market Value 30%

(held more than 12 months), such as stocks,

bonds and other capital assets, the sale

o which at air market value would yield

long-term capital gain

long-term appreciated rea propert Fair Market Value 30%

Tangie persona propert hed ong term, Fair Market Value 30%

i the recipients use o the property is related

to its exempt purpose or unction; unrelated

use limits deduction to lesser o cost basis or

air market value, but the 50% ceiling applies

The Beeft o Gvg


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18 19

Chartable Bequet

Gits provided through wills or trusts have become the oundation o

the American philanthropic tradition. In act, the vast majority o planned

gits ultimately received result rom bequests. Such gits enable you to

make signicant contributions that may not have been possible during

your lietime.

When you remember the Community Foundation in your estate plan,

you may reduce your estate taxes while supporting your community. You

may give a specic dollar amount, property or a percentage o your estate.

You may also give the remainder o your estate ater bequests to riends

and amily.

When planning a bequest to Grand Rapids Community Foundation, be sure

to talk with a member o the development sta. Your sta representative

will help make sure that your wishes are clearly understood in the present

so they can be careully carried out in the uture.

Divideassetsbetweenloved

onesandyourcharitableinterests

inanymanneryouchoose.

Reducethesizeofyourtaxable

estate.

IhaveincludedtheCommunity

Foundationinmywillbecauseitisa

permanentpartofourcommunity.

Iknowthatmygiftwillbenetthe

peopleherelongafterImgone.

HarveyLemmen

Harvey Lemme was born inIonia in 1922. While his amilywas o simple means, his parentswere devoted members o the

community. His ather, a schoolboard member, and his mother,

a homemaker, stressed theimportance o a good education.

Harvey listened and learned, and,in 1940, graduated valedictorian o

his class. His success in high schoolhelped him earn a scholarship to

the University o Michigan.

I had never been away rom home,

and I remember eeling a little

homesick at the university, saidHarvey, who majored in accounting.

By 1944, Harvey earned his degree.

He briefy entered the workingworld and returned to his alma

mater in 1945 to earn an MBA.

He became oce manager o

Meijer in 1949. It sounds

impressive, but there were onlyabout 12 employees. We worked in

a small oce in Greenville with oldwooden foors. There were only a

ew Meijer groceries at that time,Harvey said. He retired as chie

operating ocer ater 38 years.

The thing that really matters to

me is helping people. I believe thathow much you help others is the

one true measure o success,he said.

Your Legacy

The Metz Legacy socety

Named or George and Mary Metz, whose $100,000 git was the rst

bequest received by Grand Rapids Community Foundation, the Metz

Society recognizes people who have included t he Community Foundation

in their estate plan.

Metz Society members are invited to special

Community Foundation events that are exclusive

to members and donors.

I you have included the Community Foundation in your will or estate

plans, please let us know. Even i you wish to remain anonymous, we want

to be able to ully carry out your git intentions. Knowing what you want is

important to us.

MetzSocietymembersreceive

specialbenets.

InvitationstoMetzSociety

membersonlyevents.

Recognitioninourannualreport.

Choosetobeinterviewedso

wecancreateyourpersonal

philanthropybiography.

BEnEFiTs

BEnEFiTs

Long time Grand Rapidians

steele ad Mary Taylor areactive and engaged philanthropistswith a sweet spot or D.A. Blodgett-

St. Johns, a childrens welareagency. They discovered the

Community Foundation in 1982and were part o an original

Friends group that promised an

unspecied nancial commitment

by direct git or estate plan. Theyhave a Donor Advised Fund at theCommunity Foundation and also

have made provisions in theirestate plan or growing their und.

With a planned git to D.A. Blodgett-St. Johns, Steele and Marys und

will ensure that children in its

oster care system have a chance

at a college education. They alsosupport kids there with tutoring,other pre-college aid and

college tuition.


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20 21

Your Legacy

Charitable Trut

Charitable trusts allow you to donate the

tree, and keep the ruit or donate the

ruit, and keep the tree.

A valuable option in estate planning,

charitable trusts provide maximum

exibility or giving a git and securing a

lie income. Your options include a

charitable lead trust (CLT) or several types

o charitable remainder trusts (CRT).

Here how t work:

1. With the help o your proessional

advisor, you select an asset that will

be used to und your trust.

2. You transer ownership o the asset to

the trust, which owns and manages it

or a specied period o time. This

provides an immediate tax deduction.

3. While the trust holds the asset, it paysyou, a charity or someone you designate

income.

4. At the end o the trust term, the trust

transers the assets to Grand Rapids

Community Foundation.

Provideincomeforlifeforyou

orabeneciary.

Makeanimmediate,signicantgift

totheCommunityFoundation.

Attainamorefavorablecurrentand

retirementincometaxposition.

Establishanannuityforaslittleas

$10,000.

Lockinanattractiverateofreturn.

Saveonprobateandestatetaxes.

Realizeacharitabletaxdeductionand

increasedisposableincome.

Annuitiesareeasytoestablishand,generally,thereisnocostinvolved.

Chartable Gt Auty

Charitable git annuities oer two key benets: simplicity and a

reliable income. When you establish a git annuity with Grand Rapids

Community Foundation, you and/or someone you designate will receive

a lie income in exchange or your charitable git. The annuity rate

depends on the annuitants age. The older you are, the higher the rate.

Charitable git annuities oer several tax advantages as well. Part o the

git qualies or a current ederal income tax deduction. By transerring

an appreciated asset to the Community Foundation, you will reduce and

deer your capital gains tax and may reduce probate costs and estate

taxes. Check with your tax or nancial advisor or detailed tax

implications.

A deerred git annuity allows you to make a git now and receive

payments later in lie. This type o git is attractive to younger donors

who are planning or retirement. You will receive a higher rate and a

lietime income, based on when you want to start receiving payments(at least 12 months ater establishing the und). I you need current tax

deductions and want to augment retirement income on a tax-sheltered

basis, a deerred git annuity is an excellent option.

BEnEFiTs

Aew years ago, donorKe Larm received a GrandRapids Community Foundation

postcard that described charitablegit annuities (CGA). He liked what it

oered, and he careully consideredwhich assets he could use to

establish a CGA. He landed on aunique solution.

In 1992, Ken inherited a air amount

o vintage Herman Miller urniture.Back then he chose to liquidate the

items, which had appreciatedconsiderably since their creation in

the 50s. I decided to put the moneyin U.S. savings bonds. I saw this as a

sae investment that allowed me todiversiy my assets, he said.

Kenneth larms Creatie Git: rom Frnitre Inheritanceto Commnit Good

Ken discovered that his bonds had

more than doubled in value since1992. He called the Community

Foundation to see whether hecould use the bonds to establish

a CGA.

This was a great option or me,because I was able to get a good

rate o return due to my age, Kensaid. I eel that giving back to the

community is the right thing to do.

Ater Kens lietime, the CGA

residuum will roll into a Field o

Interest Fund to be establishedthrough his estate. He has

specied that the B. Kenneth LarmFund will be unrestricted.


13/15

22 23

Charitae lead Trst

With a charitable lead trust (CLT), you donate income to

charity and retain the principal. Through the trust, you

determine how much will be paid to Grand Rapids

Community Foundation or how long. The principal that

remains ater the trust terminates will revert back to you

or pass to another designated individual. You may choose

between xed or variable income payments.

Charitable Lead Trusts are an eective tool or excluding

assetsand subsequent appreciation on those assets

rom your taxable estate, while ensuring your avorite

causes receive signicant charitable support.

Retainandtransferappreciatedproperty

tofamilymembersatlowcost.

Reducetheburdenofgifttaxesorprobateand

estatetaxesonyourproperty.

Achieveamorefavorableincometaxposition

dependingonthecharacteristicsofthetrust.

Acharitableleadtrustcanbeextremelyusefulto

implementinayearinwhichyouhavean

unusuallylargeamountoftaxableincomeand

canuseaverylargecurrentdeduction.

Charitae Remainder Trsts

A charitable remainder trust (CRT) is

one o the most exible ways to give to

Grand Rapids Community Foundation.

With a charitable remainder trust, you

donate an asset to charity and retain

the income or a term o years or or

lie. Because the CRT is charitable, it

can sell highly appreciated property

without paying capital gains taxes,

allowing the ull asset to work. You

may choose between xed (annuity)

or variable (unitrust) income.

Providelifetimeincomeforyourselforothernamedbeneciaries.

Makeasignicantcharitablegift.

Realizethesecurityofapredictablelifetime

incomestream.

Saveonestatetaxes.

Avoidimmediatecapitalgainstaxwhen

originalassetissold.

Realizeacharitabletaxdeduction.

Increaseincomebyconvertinglowyieldassets.

Charitable Remainder Annuity Trust: Fixed Payments

A charitable remainder annuity trust (CRAT) pays a lietimeincome based on the initial value o the assets unding the

trust. The payout rate must be at least 5% o the initial airmarket value o the git.

I you establish an annuity trust, you will receive a deduction

or the present value o the charitable remainder interest

and avoid capital gain tax on the transer o appreciated

long-term securities. Typically, the allowable charitable

deduction rom a CRAT is slightly greater than rom a

unitrust when the initial value and cost basis o the assets

gited are equal.

For a calculation on a CRAT just give one o the development

team members a call at 616.454.1751.

Your Legacy

Providelifetimeincomeforyourself

orothernamedbeneciaries.

Makeasignicantcharitablegift.

Hedgeagainstination.Incomemay

increaseifassetsgrowinvalue.

Saveonestatetaxes.

Avoidimmediatecapitalgainstaxwhen

originalassetissold.

Realizeacharitabletaxdeduction.

Increaseincomebyconvertinglow

yieldassets.

Makeadditionalcontributionsif

youlike.

Charitable Remainder Unitrust: Variable Payments

The percentage payment you receive rom a unitrust varies rom year to

year as the air market value o your trust assets uctuates. I the value o

the trust assets increases, so too would your payments. You must speciy a

payment rate (at least 5% by law). I your trust assets outperorm that rate,

the extra gains would be reinvested, eventually increasing your principal

and payments. You may view this as a possible hedge against ination,

assuming growth in value o the trust assets is somewhat comparable to

the ination rate. The reverse, however, is also true. I your trust earns less

than the rate you speciy, you will still be paid that same percentage. This

could erode your principal and lower your payments.

To emphasize asset growth and a higher charitable deduction, establish a

lower trust payout rate. I you select a higher trust payout rate, youll

receive a greater annual payment and lower charitable deduction.

You can und a unitrust with cash or, ideally, with long-term, highly

appreciated securities. The charitable deduction you are allowed is based

on: the assets air market value (even though you may have purchased

them or less); your chosen payout rate; the number o specied

beneciaries; and beneciariesages or the trusts term o years. Your tax,

legal and nancial planning counsel can help you assess the options best

suited to your situation.

Max Doerg,like many Grand Rapids CommunityFoundation beneactors, has been a lielong resident oGrand Rapids. Max has seen how growing community needs

challenge local nonprots.

I really wanted to give something back to this community,said Max, a stockbroker or more than 40 years. Thats why it

was especially meaningul to establish our charitable remainderunitrust to benet Grand Rapids Community Foundation.

Max and his late wie, Lois, established their charitableremainder unitrust with appreciated stocks. Their git provided

an immediate charitable tax deduction, thus decreasing their tax

liability during a high-income year. Max receives income during

retirement, and, as the trusts assets grow in value, the trust willact as a hedge against infation. Max and Lois were also able tomake a much larger git to Grand Rapids Community Foundation

because they avoided paying capital gains taxes.

Through their charitable remainder unitrust, the Doerings

generosity will continue to benet the community thatcontributed to their own prosperity.

BEnEFiTs

BEnEFiTs

BEnEFiTs


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24 25

Your Legacy

Improveyourcashow.

MakeasubstantialgifttoGrandRapids

CommunityFoundationwhileretaining

lifetimeuseofproperty.

Realizeanimmediatecharitable

taxdeduction.


Enjoyamorefavorableincome

taxposition.

Remader iteret Redece or Farm

Giving a remainder interest in a personal residence or arm allows you to

stay in your residence or operate the arm without disruption. You receive

an income tax charitable deduction or the present value o the remainderinterest. In computing this value, depreciation may be taken into account.

This git permits you to avoid any potential capital gain ta x on the built-in

appreciation.

In contrast, i you made the same git to a unitrust, you would have to give

up possession o the property. Giving a remainder interest provides a

deduction that rees up tax dollars into spendable income without causing

any liestyle disruption. Taxes, insurance and normal maintenance remain

your responsibility. You will be entitled to additional deduct ions upon

making subsequent capital improvements.

Having any degree o wealth at lie's end is asweet reward or hard work, saving and wiseinvestments. Many people nd peace o mind andsatisaction in creating estate plans that acknowledge

loving relationships or that reward nonprots doing

great work.

Beyond legal documents, there is another document

you can create to reward people ater your death. Anethical will is a document you create or loved ones

to share your values, belies, spirituality, avoritememories and hopes and dreams or the uture. An

ethical will helps you tell others about yoursel andleave them a git more valuable than money.

People who think they are not writers might be

intimidated by creating an ethical will. However,it can be done over time and doesnt have to be

complicated. I you are not a computer user, youcan handwrite a note or a series o notes, you can

write in a journal or notebook or electronicallyrecord your thoughts. Keep your ethical will with

your other important papers and know that yourloved ones will be pleased to read it.

Whatwasyourchildhoodlike?

Whatwereyoulikeinschool?

Whatwerethebestyearsofyourlife?

Whatworldeventhadthemostimpactonyou?

Howdidyoudecideonyourprofessionorcareer?

Doyouthinkitwasyourcalling?

Whatwasthemostdicultdecisionyouevermade?

Whatisthebravestthingyouveeverdone?

Didyouloveyourspouse(orsignicantother)atrst

sight?Whendidyouknowitwaslove?

Whatiskeytoalastingmarriage?

Whatiskeytoalastingfriendship?

Whoisyourbestfriend?

These questions will help you think about what you might tell people about yoursel.

Think through your responses and ask yoursel why as you write.

Whatisyourbestadviceforparents?

Whatwasthemostrewardingaspectofbeing

aparent?

Whatdoyoubelievein?

DoyoubelieveinGod?

Whatdoyouthinkheavenislike?

Whatareyoumostproudof?

Whatareyourmostcloselyregardedvalues?

Isanythingintheworldworthdyingfor?

Whatwouldyourdescendentsbesurprisedto

knowaboutyou?

Howdoyouwanttoberemembered?

A Wll o Wdom:Writing your ethical will

BEnEFiTs


15/15

PURPOsEGrand Rapids Community Foundationmakes grants to nonprot organizations throughout

Kent County, supporting arts and culture, education,

community development, environmental preservation,health and human services. We seek to serve the

community with leadership that encourages

collaboration, demands accountability, values diversity,

promotes justice, supports prevention and advances

systemic solutions to community problems.

LEADERsHiP Grand Rapids Community Foundation isgoverned by an elected 12-member volunteer Board o

Trustees. Trustees serve one or two our-year terms.

FinAnCiAL MAnAGEMEnT Grand RapidsCommunity Foundation manages its investments and

its spending by closely adhering to policies developedby volunteer committees, leaders and recognized

experts in nance. The investment policy is designed

to produce a total return that exceeds the ination rate

by at least 5% annually. The spending policy, which

allows us to grant 5% o the average market value

balance over the past our years, allows grantmaking

to continue at a relatively stable rate, despite variations

in the investment market.

inTEGRiTYThe Grand Rapids Community Foundationis conrmed in compliance with the National Standards

or U.S. Community Foundations, voluntarily adopting

policies and procedures to guarantee that we conductbusiness not only legally, but ethically.

HisTORY Founded in 1922, Grand Rapids CommunityFoundation was one o the rst community oundations

in the United States and the rst in Michigan. Like other

community oundations, it is a public charity, chartered

to saeguard the broad interests o the entire community

it serves.

sERViCEsThe development sta at Grand RapidsCommunity Foundation is available to help you dene

your philanthropic goals, discuss your charitable plans or

evaluate giving options. We will work with you and yourtax, legal and/or nancial planning counsel to come up

with the best plan or your situation. For more

inormation or to set up an appointment, call

616.454.1751.

Your Commuty.Your Foudato.

Since 1922, Grand Rapids Community

Foundation has worked to build this

communitys permanent endowment

and lead the community in strengthening

the lives o its people.

Note:Theexamplesusedthroughoutthisbookillustrate

potentialtaxconsequencesofvariousgiftoptions.Your

particularsituationmaydier.PleasecalltheCommunity

Foundationat616.454.1751tolearnmore.

Grand Rapids Commnit Fondation

185 Oakes Street S.W.

Grand Rapids, Michigan 49503

Tel: 616.454.1751, Fax: 616.454.6455

Email: [email protected]

Website: www.groundation.org

facebook.com/GRCommFound

@GRCommFound

GRCF 2012 Guide for Giving

Documents

Transcript of GRCF 2012 Guide for Giving