Want to share quality time with the kids? One way ”“ likely one you haven”™t thought of ”“ is by starting an endowment through your local community foundation.
“Believe it or not, I have met families who only get together once a year to discuss their community foundation endowment,” said Lynn Pantalena, regional director of wealth management consulting for the Bank of America”™s Northeast region.
Pantalena addressed more than 150 guests at the Community Foundation of Orange County”™s President”™s Circle breakfast at Anthony”™s Pier 9 restaurant in New Windsor June 19. “Otherwise, they have nothing to do with each other.”
While that scenario is not exactly a good example of the “family table” set, contributing to your local community foundation can build a family legacy and instill a sense of belonging into children, said Pantalena, encouraging foundation supporters. It can also encourage the younger generation to stop thinking that “a BMW at 16 is a rite of passage they are entitled to ”¦ Giving back to their community can instill a sense of pride and create a family legacy that will last” long beyond the flashy car.
Connecticut born and raised, Pantalena has traveled to many states during her nearly 18 years with Bank of America, focusing on helping customers plant the seeds of philanthropy by starting an endowment.
“I may be preaching to the choir,” Pantalena told the bankers, not-for-profit leaders and others in the audience, “but I encourage you to seek out community foundations and get involved with corporate, donor-advised endowment funding.”
A $25,000 minimum, which can be built up over five years, is necessary to set up a fund. Donors can then start recommending grants to nonprofits of their choice.
Other alternatives are to make contributions via unrestricted funding, leaving the giving up to the foundation itself. It is possible to become a “subfund” of a donor, which requires a smaller startup fee.
Agency endowments for nonprofits can be a gateway to support local efforts.
“For potential donors,” said Pantalena, “if you are worried about oversight, a community foundation is local ”¦ and stays in the community to help your specific community.”
Pantalena warned of the importance of being specific when deciding to become a donor: “One gentleman gave money to his music school ”“ the intention was the money would go to give free concerts. Because of the ambiguity in which the donation was written, it never really went to the intended cause. Community foundations can help people focus on exactly where they want their money to go, and make sure it gets there.”
There are tax benefits that go along with starting an endowment, Pantalena reminded potential donors. “If you have an IRA, so much of it goes to taxes. Think of making a gift that way. Realizing 60 to 70 percent can go to the tax man may help people re-think their attitude about giving.”
She said: While it may be “painful to write a check for $1 million, your local community foundation can make it so much easier, and much more rewarding. Reap the benefits of getting rid of those assets you no longer use ”“ a second or third home, for example ”“ if you are able to make that work for others, create an endowment fund that will become a family legacy.”
David Cocks, who is president and CEO of Walden Savings Bank headquartered in Montgomery, sits on the Community Foundation of Orange”™s board of directors. “We encourage people to contribute. Our foundation is just 7 years old, and by working with us, you can create a foundation in your name that will go on.”
Anthony Costa, chairman and CEO of Empire Savings Bank in Newburgh, said his bank started its endowment through the Community Foundation of Orange when it opened in 2004. “We are now helping our local nonprofits ”“ Special Olympics, Hospice of Orange and Sullivan Counties, the local Make-A-Wish Foundation ”“ so many people benefit from it, and we do, too.”
Empire also uses an endowment investment manager, Hudson Valley Investment Advisors, to oversee where the bank directs its donations. “We do our due diligence and both the bank and foundation review each request we receive,” Costa said.
The Community Foundation of Orange County gave each breakfast guest a package of seeds to remind them to keep the “seeds of giving” growing. “I had a dream we got a donor who gave us $11 million; we”™re never quite sure when that type of donor will materialize,” said Community Foundation of Orange”™s Executive Director Karen VanHouten. She certainly hopes her dream is one that will come true for Orange County.
“Community foundations are so valuable because we can pull off 4 percent of those funds that we can give every year,” continued VanHouten. “Community Foundation of Dutchess, where I worked for several years, is 37 years old and self-sufficient. We are only 7 years old. We charge 1 percent to manage funds, so we are still at a deficit. They (the Dutchess foundation) started out the same way we did ”¦ and look where they are today.”
The Community Foundation of Orange County is located in hamlet of Sugar Loaf. For more information:Â HYPERLINK “http://www.cfoc-ny.org” www.cfoc-ny.org.
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