Page 34 - December 2019 Bar Journal

FEATUREEXTRA

be made on an objective basis for charitable, Contribution, Tax and Administrative • Cash gifts to a supporting organization
educational or religious purposes and they cannot Efficiencies are deductible up to 60% of AGI; private
be made to discharge a personal obligation Donors can contribute a full range of property foundations are limited to 30% of AGI.
of a donor, disqualified persons, or any other to supporting organizations through current • Gifts of long-term capital gain property are
private individuals. Unlike private foundations, or planned gifts. The public charity status of a deductible at fair market value up to 30% of
supporting organization grants may not reimburse supporting organization presents significant AGI; private foundations are limited to cost
donors or related parties for personal expenses advantage in the treatment of contributions as basis for all property gifts, except fair market
incurred on supporting organization business compared to a private foundation, especially value for publicly traded stock, subject to 20%
(e.g., travel expenses). Payment of compensation with regard to assets such as real estate and of AGI, aggregate contributions limited to 10%
to disqualified persons is similarly prohibited. closely held business interests: of outstanding stock of corporation.
• Supporting organizations have no minimum
annual distribution requirement; private
foundations must grant 5% of investment assets.
• Supporting organizations pay no tax on
investment income; private foundations have
up to 2% excise tax on investment income.
The supported public charity handles the grant
payment process for the supporting organization,
maintains records, invests assets and prepares and
files the supporting organization’s annual IRS Form
PARTNERS IN 990 and state filings. Supporting organizations
at community foundations often have dedicated
PHILANTHROPY professional staff who can serve as consultants on
grantmaking and philanthropy. The supported
public charity may charge fees to cover back office and
The Jewish Federation professional services, but these will be significantly
of Cleveland treasures its lower than the cost to a private foundation to
partnership with professional accomplish the same tasks through paid staff or
advisors in achieving their outside professionals. The potential tax and cost
efficiencies of a supporting organization leave more
clients’ philanthropic goals. assets available for charitable grantmaking.
Our staff has decades of A supporting organization may make sense
expertise in structuring for donors who wish to retain influence over
charitable plans to meet a separate charitable entity, but are willing to
almost any interest. Contact surrender legal control in exchange for the
us for a consultation or efficiencies that come with public charity status.
illustration. We look forward Others may prefer the independence of the
to working with you and private foundation. The ultimate decision is
your clients to help make the unique to each donor’s situation and priorities.
world a better place, today Legal and professional advisors of course should
and tomorrow. carefully consider the full range of vehicles, run
the numbers, and recommend a path that best
aligns with the client’s goals and expectations.
• Donor Advised Funds
• Family Foundations
• Legacy Giving Matthew A. Kaliff, JD is Assistant
• Annual Giving Managing Director, Endowment
Development at the Jewish Federation
of Cleveland. His responsibilities
include planned giving, endowment
vehicles, and the management of family supporting
For more information, contact foundations of the Federation. A graduate of
Matthew A. Kaliff, JD at 216-593-2831 or Georgetown University Law Center, Matt practiced
e-mail mkaliff@jcfcleve.org. in the private sector before joining the Federation. He
has been a CMBA members since 2017. He can be
reached at (216) 593-2831 or mkaliff@jcfcleve.org.

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