Managing Foundations and Charitable Trusts: Essential Knowledge, Tools, and Techniques for Donors and Advisors(Bloomberg Financial)

Table of Contents:
Preface xiii Acknowledgments xvii CHAPTER 1 The Basics of Charitable Giving 1 Direct Gifts 2 Supporting Organizations 6 Donor-Advised Funds 8 Private Foundations 12 Conclusion 18 CHAPTER 2 Tax Incentives and Limitations 21 Four Powerful Tax Incentives 21 Details on Tax Deduction Limits 25 Finding the Best Giving Strategy 27 The $1.6 Trillion Loss 28 Estate Taxes 29 Conclusion 30 CHAPTER 3 Charitable Planning and Taxes 33 Giving Approach 34 Tax Planning Complexity 37 Guidelines for Analytical Expenditure: Or Is Analysis Worth It? 39 What to Do When Tax Rates Are Uncertain 40 Timing of Gain Realization 41 Charitable Remainder Trusts and Deferral 42 Conclusion 42 CHAPTER 4 Planning with Charitable Lead Trusts and Charitable Remainder Trusts 43 Charitable Lead Trusts 43 Charitable Remainder Trusts 47 Flexibility and Irrevocability 52 CHAPTER 5 Foundations and Children 53 Affluenza 54 Bringing Families Closer 56 Transmitting Values 56 Providing Valuable Skills 56 Conclusion 59 CHAPTER 6 Benefits of Giving While You’re Still Alive 61 Personal Satisfaction 61 Create a Legacy 62 The Problem with Waiting 63 From the Grave: Control—But Not Too Much 64 What about Too Little Direction? 66 Who Gets Control? 68 Conclusion 69 CHAPTER 7 Effective Foundations: The Business of Philanthropy 71 The Mission Revisited 71 Getting Started 74 Know Your Charities 75 Governing for Effectiveness 77 Approaches to Grant Making 81 You Get What You Negotiate 82 Stand on the Shoulders of Others 83 Outside Experts Can Make the Difference 84 Types of Support: Periodic versus Endowment, General versus Program 84 Is Measurement Worthwhile? 86 Establishing Measures 90 Provide Feedback 91 Give Wisdom in Addition to Wealth 91 Give Strategically 93 Exercise of Leverage 95 Make Foreign Donations Deductible 96 Use Public Relations Effectively 97 Create Financial Leverage through Tax-Exempt Financing 98 Let Your Foundation Do the Dirty Work 98 Conclusion 99 CHAPTER 8 The Road to Hell: Beware of Unintended Consequences 101 Food Aid 103 Private Charity and Unintended Consequences 105 Fungible Money and Inadvertent Funding of Terrorism 107 How to Give Restricted Grants 109 Poverty—Again 110 CHAPTER 9 Developing an Appropriate Foundation Investment Policy 113 What to Include in an Investment Policy 113 Conclusion 121 CHAPTER 10 Developing and Implementing a Foundation Asset Allocation Policy 123 Differences between Corporation and Foundation Investment Plans 123 The Seven Deadly Sins of Foundation Asset Allocation Policy 125 Developing a Good Asset Allocation Policy 129 Should an Asset Allocation Policy Change over Time? 135 Capturing the Rebalancing Bonus 136 Active Management versus Indexing 137 Who Is Responsible for the Asset Allocation Policy? 138 Conclusion 139 CHAPTER 11 Main Themes in Legal Compliance 141 Some Compliance Errors May Seem Funny, but They’re Not 142 A Fail-Safe System 143 Required Activities 144 Prohibited Activities 147 Conclusion 151 CHAPTER 12 Fraud, Inflation, and Market Risk 153 Stanford Case 157 Enron 160 Baptist Foundation of Arizona Case 162 The Bre-X Fraud 163 Allied Capital 166 Fraudulent or Not? You Decide 167 What Is XYZ? 169 How Will Social Security End? 170 Promised Benefits 170 Real Terms 171 Inflation: A Brief History 174 Inflation Indexing 176 Foundations and Endowments Are Highly Exposed to Inflation 180 Avoiding Fraud 180 CHAPTER 13 Other Planned Giving Vehicles 183 Charitable Gift Annuity 183 Gift Annuities versus Regular Annuities 184 Partial Exclusion of Annuity Payments from Income Tax 185 Bargain Sale 186 Charitable Gift Annuity versus CRT 189 Remainder Gifts with Retained Life Estate 190 Pooled Income Funds 192 CHAPTER 14 Donor-Advised Funds 195 History 196 Guidelines—Highlights 196 Fees and Costs 199 CHAPTER 15 Building Assets with Charitable Planning 201 Professionally Managed, Turnkey Private Foundations 205 Foundation Manager’s Role 206 Conclusion 207 CHAPTER 16 How to Select a Foundation Manager 209 Choosing a Full-Service Manager 209 Conclusion 212 CHAPTER 17 What Can You Donate to Charity? 213 Publicly Traded Securities 213 Nonpublicly Traded Business Interests 215 Tangible Personal Property 216 Intangible Personal Property 218 Qualified Retirement Plans 221 Real Estate 223 Conclusion 225 CHAPTER 18 When the Shoe No Longer Fits 227 Private Foundations 227 Charitable Remainder Trusts 231 Getting Rid of Other Charitable Vehicles 243 Conclusion 245 Selected Resources 247 About the Authors 249 Index 251

About the Author :
ROGER D. SILK, CEO of Sterling Foundation Management, is widely recognized as a leading expert in the field of private foundations and charitable trusts. As a founder and board member of several nonprofit organizations, former bond trader at the World Bank, and Stanford-trained PhD economist, Dr. Silk possesses a unique blend of experience, practical knowledge, and theoretical insight that has enabled him to help build Sterling Foundation Management into the market leader that it is today. JAMES W. LINTOTT is Chairman of Sterling Foundation Management and a board member of Dean and Deluca and several private investment companies. He has over two decades of experience working with wealthy individuals and families. In addition, Mr. Lintott serves on the boards of a number of nationally recognized charities, including the Freer/Sackler Galleries of the Smithsonian Institution, the U.S.-Japan Foundation, and Best Buddies International.