Warning: getimagesize(): Filename cannot be empty in /home/blackenterprise/public_html/wp-content/themes/blackenterprise/single-standard.php on line 35
If you think you’ll wind up 2002 with a hefty tax bill, you can plan to write a few checks to charities this December, which could save you hundreds of dollars. Even better, you can begin now to set up a sophisticated charitable-giving strategy that will be in place by year-end and last for years to come.
Darrel Branch and Ptosha Rockingham-Branch of Coral Springs, Florida, have decided to implement the latter strategy. “We’re planning on setting up a private family foundation this year,” says Rocki, as she is known. “We’ll make a contribution to our foundation and get a tax deduction. Then we’ll screen the candidates and approve scholarships for worthy and needy students. Both Darrel and I want to make contributions to the community, and we want to be involved in the process.”
Tony Rogers, a financial planner at the LaSalle Financial Group, a retail firm of MetLife Insurance, in Coral Gables, Florida, who advises the couple, has been helping them establish their foundation. “You don’t have to be an athlete or a celebrity to have a private foundation,” he says. “Darrel and Rocki are both executives with major corporations, and they have substantial income. They’re in their early 30s, so they probably will be earning high salaries for many years. In their situation, a private foundation may provide a great deal of tax relief.”
If you’re interested in setting up a private foundation, Rogers warns, be sure to work with an experienced tax attorney and accountant. “Federal and state laws can be very complicated,” he says, “and it’s necessary to follow them all to maintain the foundation’s tax-exempt status.”
For example, there may be limits on who can be a director of the foundation. “The founders probably can play a role in the operation of the foundation, and so can friends or relatives, but some outside oversight might be required,” says Rogers. Tax laws can be tricky, too. There are limits as to how large a deduction you can take, in relation to your income, if you make donations to a private foundation.
If creating a private foundation isn’t for you, there are other outlets for your charitable intentions. Many neighborhoods have community foundations, while financial firms such as Fidelity, Schwab, and Vanguard sponsor donor-advised funds. Either way, you can get a current tax write-off and still have a say as to which charities will receive your money, now and in the future.
You can find more information on starting a private foundation at the Council on Foundations’ Website at www.cof.org/starting/starting.htm. There are also several books that can be helpful, including The Handbook on Private Foundations by David F. Freeman and the Council on Foundations (The Foundation Center, $29.95); Family Foundation Handbook by Jerry J. McCoy and Kathryn W. Miree (Panel Publishers, $165); and First Steps in Starting a Foundation by John A. Edie (Washington, D.C. Council on Foundations, $45).