Community Foundation of Washington County The Power of Philanthropy

IT MAKES GOOD SENSE What is a Community Foundation?

1. Grantmakers. They support a wide range of community needs- education, health, human services and more. 2. Local Giving Vehicles. They establish and hold numerous funds for a variety of charitable purposes. 3. Community Leaders and Conveners. They act as community catalysts focusing on long-term endowment building and sustainability. Community Foundations Are…

IT MAKES GOOD SENSE Iowa Communities Growing Endowments in

Surprising wealth transfer in 50 years $41 trillion in United States $531 billion in Iowa through probate estates alone $6.1 billion in Washington County $ 274,425 per probated estate in Iowa… $314,186 per probated estate in Washington County.

Many gifts, many generations If 5% of estates transfer to endowment funds… A Washington County Example YEAR 10 $45.2 million charitable gifts $10.9 million total grants $53.3 million community endowment YEAR 50 $304 million charitable gifts $646,.6 million total grants $783 million community endowment What could be accomplished in your community…

7 Ps a revenue source that allows for enhancement or expansion of programs during successful years, and that provides some security in more challenging financial times. Definition: Endowment Permanent, persistent resource Provides a revenue source that allows for enhancement or expansion of programs during successful years, and that provides some security in more challenging financial times.

6+ TIMES One gift, many generations YEAR 15 $95,000 in cumulative grants and services $164,000 balance YEAR 25 $193,000 in cumulative grants and services $234,000 balance assumes 4.5% annual payout and 8.5% rate of return Initial gift has been invested: 1 TIME 2 TIMES YEAR 50 $662,000 in cumulative grants and services $570,000 balance YEAR 1 Establish a Named Fund $100,000 gift LOOKING AHEAD

IT MAKES GOOD SENSE Tax Credit The Endow Iowa

Endow Iowa? WHAT IS Encourages Iowa Taxpayers to Contribute to Endowment Funds at Qualified Community Foundations Permanent Endowment Fund Has to be held at and receipted by the Community Foundation Iowa Charitable Purpose (scholarships, agency endowments, donor advised funds, etc.) No more than 5% spending/granting policy

Endow Iowa? WHAT IS THEN donors can be eligible for... 25% state tax credit for contribution- in addition to normal federal charitable deduction Limits each year per taxpayer (up to $227,590) statewide (approx $4.5 million in 2011) Tax credit paperwork has to be completed Awarded on a first come-first served basis Tax Credit Letter/# sent by IDED once awarded Can be carried forward up to 5 years

Surprising wealth transfer in next 50 years $41 trillion in United States $531 billion in in Iowa through probate estates alone $XXX billion in [County] $XXX,XXX per probated estate Endow Iowa Tax Credit Example With Endow Iowa, donations to community foundation endowments cost donors less. For example, a $10,000 gift could cost just $4,000. Gift: $10,000 Tax Credit: $2,500 Federal Deduction: $3,500 Total Tax Savings: $6,000 Total Cost of Gift: $4,000 *Based on 35% marginal federal tax rate Calculate for yourself and see the charitable impact at

6+ TIMES nonprofits YEAR 15 $9,000 in cumulative grants and services $16,000 balance YEAR 25 $19,000 in cumulative grants and services $23,000 balance assumes 4.5% annual payout and 8.5% rate of return Initial gift has been invested: 1 TIME 2 TIMES YEAR 50 $66,000 in cumulative grants and services $57,000 balance YEAR 1 Establish a Named Fund $10,000 gift The Impact to

Surprising wealth transfer in next 50 years $41 trillion in United States $531 billion in in Iowa through probate estates alone $XXX billion in [County] $XXX,XXX per probated estate Donation Amount Total $1000 or less ,803 $ $30, ,954 $30,001 - $100, $100, Total Donations 1,9711,5041,8811, ,834

In 2005…. Approximately 13 community foundations operating within National Standards for US Community Foundations Estimated $206 million in total assets What has this all done for Iowa? In 2011…. Approximately 130 community foundations/affiliates operating within National Standards for US Community Foundations Estimated $523 million in total assets… growth of $317 million since 2005!

IT MAKES GOOD SENSE Questions & Comments Thank you