Posts Tagged ‘community foundation’

My home is a funky cabin in the woods.  The furnace is under the house reached by a very cramped crawl space.  Over the years many animals, as well as my cat, have found shelter there.  Decades ago I could crawl under and change the filters but no more.  Now I must pay a man to drive out in a panel van and do it for me.

This past week I came home to find the panel van in the yard and the young man under the house banging away.  Usually he is under and out in as few minutes as he can make it, which I in no way blame him.  He was under the house so long I quite waiting for him, and went on about what little business I had to do.

He finally knocks on the front door.  He is holding the piece of tubing you see above which even I knew looked scary.  Before he could say anything I popped, “I could have been blown into the canopy.”  In dour seriousness he corrected me, “No sir, only parts of you.”

I have never responded well to the death-bed remorse and confession popular in novels, operas, and movies.  It has always seemed so careless and cheesy.  If any one thinks I have done them wrong, well too bad.  I am taking it with me.

The prudent adult keeps their papers and will in order and up todate.  The prudent adult provides for his companion, and for his family if they are deserving.  There is however something the prudent adult may have missed; and that is their community.

Why would you owe any bequest to your community?  No reason, except it has surrounded and comforted you for your lifetime.  It gave you a place to which you belonged.  It will hold your body when you can not.  If all that seems worthless to you, fine you have no need for second thoughts.

If you feel you owe your community something, your free agent is the nearest community foundation.  Charles Marlin

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With the popular media back on Leona’s case, this time delighted that her trust may not be used for the care of her pet Trouble or any dogs, it’s clear the coverage of her will and trust has been for entertainment and rarely for information.  Even The Chronicle Of Philanthropy headline on their March 12, 2009, article was “Court Rules Helmsley Trustees Not Bound by Donor’s Instructions.”  You may be worried that donor instructions for an endowment fund will no longer be honored by community foundations and the courts.  If so, cheer up buckaroo.

The recent court ruling concerning the Leona M. and Harry B. Helmsley Charitable Trust that “the trustees may apply trust funds for such charitable purposes and in such amounts as they may, in their sole discretion, determine,” cleans up a confusing situation but it did not set a precedent.  Judge Troy K. Webber did not break a sweat in this case, and donor intent is alive and well.

Leona’s will is available online but the trust documents are harder to come by.  I read the will, looked for the trust documents, read The Chronicle, and a lot of useless blog and media coverage.  There are five good lessons here if you are ready to better your understanding of bequests and endowments.

The trouble began with the lawyer who guided her when she wrote her will.  He did not earn his fee or prove a good friend.  He allowed her to become a target of derision and comedy because of how she provided for the care of her Maltese Trouble.  There were so many ways Trouble could have been provided for that would have shown love and forethought, and drawn little attention.  Once a target of ridicule herself, her trust became an easier target for legal challenges.

The second problem in the will is the appointment of trustees who are far from disinterested individuals.  She selected a brother, two grandsons, her attorney, and a friend, all people with long histories and memories.  If they can no longer serve, their replacement is to be Citibank.  Now what could go wrong here?  Relatives, your former attorney, and a bunch of Wall Street bankers?  The simple process used to select a court jury would have given her a better set of nonbiased trustees.

Judging from the snippets I found of the trust documents the problems there begin with a poorly developed mission statement, particularly for such a large trust.  The mission statement should have developed scenarios of activities the trust could pursue given the current environment.  These scenarios would also have given Leona a better understanding of what her options were in providing for the welfare of dogs.

There were revisions made at different times to the trust documents, which in itself is fine, but a revision means you make very clear what is current and what is not.  That may not have happened in this case.

Finally, the big problem that should never have passed muster with any lawyer or advisor is in plain view.  In the trust document there was a two part statement of purpose, “(1) purposes related to the provision of care for dogs; and (2) such other charitable activities as the Trustees shall determine.”  This is an open barn door, and the horses are now out and running.  Perhaps she did not know what she wanted to happen.  Perhaps she saw the two purposes as primary and secondary.  We can not know.  She was definitely too trusting, and for a shrewd business person this seems a very strange happening.  If the relatives and friends named as trustees knew the contents of the trust documents, why didn’t they speak up?  Were they too interested to care?

If you feel you may have some of the same problems as Leona, take these two actions.  First, trust one lawyer and call yourself a fool.  When there is much involved, get a second and third legal opinion.  The cost is of no meaning but the peace of mind is everything.  Talk to a community foundation board at no cost and you will hear the bells clearly.

Second, ask each prospective trustee, without their consulting other prospective trustees, to write and sign a full statement on (a) what the trust mission statement means, (b) how it can be implemented, (c) whether they feel the trust mission justifies the bequest, and (d) do they have any issues or reservations in fulfilling the mission.  Those papers should make interesting late night reading for any donor.

Now buckaroo, you can banish Leona from your bedroom.  Charles Marlin

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In our private thoughts we often think of ourselves as achievers, more successful than others because we are smarter, more alert, and more willing to make the right choices, more willing to study and work for future gains.  We know that what we have achieved is largely if not wholly to our own credit.  Hog pucky.  If you didn’t have a farm youth, I can tell you that hog pucky can penetrate steel coming out the other side without diminish in odor.

We are able to make something of ourselves because we are surrounded and nurtured by family, neighborhood, church, school, tradition, and nation, the total community.  Opportunities are made available for us.  Encouragement is given to everyone.  Destructive events are prevented from blocking our education and our progress.  If we miss the first time or are slow to learn we are not passed over.  Instead we are given a chance again and again, formally and informally.

One opportunity sets us up to take advantage of the next opportunity, so that we gradually build and mature into a successful happy person.  Yes, it took effort on our part, but that effort was and is even now backed by our community.

Now the question comes, who backs up the community?  Who safe guards those resources used to make us who we are?  The answers would fill a hefty book, and I am sure it would be futile to priortize to identify which are more or less important.  Our government, schools, church, family, heritage, ah the list goes on.  All are important.

An important guardian you may have missed is your community foundation.  By using your community foundation you can select those nurturing forces that lifted and supported you as you were growing up and later as you succeeded as a working adult, and give them an endowment to ensure they are there to help others for as long as there is a need.

Not every community is fortunate to prosper and remain a good place to live.  Economic factors can wreck havoc.  Cultural heritage can dissipate.  Populations can age and lose energy.  Your investment in an endowment can be a bedrock used by future generations to renew the community  and nuture the people within it.  Personal and community wealth can come and go but community foundation wealth stays where it is grounded.  It is always at home and at work.

Supporting the source of your prosperity is a solid way to acknowledge your achievements and to show respect for your past.  You honor your community and in doing so honor yourself when you endow the sustainability of your community.  The community foundation is your tool.  Charles Marlin

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Once a person commits himself to a community foundation endowment fund I would bet my lunch money that it will become one of his proudest possessions even though he has given money away.  On his satisfaction meter it will outscore the vacation home, the big boat when he had it, the fancy-smancy car he seldom drives, and the diamonds he rarely gets to see.  The fund will become storywise his favorite grandson or niece.  The reason for all this very justifiable pride is in how an endowment fund works.

A straight out gift to a charitable nonprofit goes into their operating budget immediately.  The good work it finances is usually done before the end of the budget year.  Next year however, the nonprofit is still in the same needy position as the previous year.  The need alleviated last year did not go away.  It most likely has increased in the misery and affliction involved.  A donor has two choices up front.  He can turn away from the nonprofit, or he can give as he did the previous year.

A community foundation endowment fund blows that boat out of the water.  If the donor puts $100,000 in an endowment fund, it begins paying a benefit to the nonprofit in the first full year of its existence, and the next year pays a little bit more, and the second year still more than the previous year.  Every year a benefit is paid out but the original gift never diminishes.  Instead it grows in size so that in twenty years it has paid out benefits equal to the original $100,000, and has grown as an endowment fund to over $200,000.  The magnitude of the original generosity is unlimited because the endowment is invested and administered in perpetuity.

Another wonderful part of this is that the donor doesn’t need to die to get the endowment fund growing and giving.  He can start the fund now while he has good years to enjoy watching it fulfill his wishes.  The donor has time to consider whether he would like to increase the fund by another donation.  It’s a smile that never goes away.

How could a donor not be exceedinly proud of an accomplishment like that?  If you want to see it presented in a simple, honest manner, go to the Legacy Foundation Inc web site at http://www.legacyfoundationlakeco.org/  These people are the community foundation for Lake County, Indiana.  Click on their What is an Endowment Fund? and their How does an Endowment Work?  I wish I had put together those two pages.

I hope you are a friend of Clarion County Community Foundation when you recognize that a community foundation endowment fund is the sweetest gift you could ever give yourself.  If so, call Steve Kosak, our Executive Director, at (814) 677-5085, or me, the CCCF Board President, at (814) 797-2233.  If you are a friend of another community foundation when you see the light, I am still delighted.  And if we happen some night to be in the same gin joint, the drinks are on me because I want to hear the complete story of your community foundation endowment fund.  Charles Marlin

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When you want to do something good by setting up a trust fund but you know this is not your field of expertise, you may feel hesitant taking that first step.  You don’t want to talk to someone at the community foundation until you know for sure what you want to do.  You are smart to hold back because what you need is some preparation time and idea development.  I have divided the whole process into six stops which should work for you whether you are going to Clarion County Community Foundation or another community foundation.

Stop One – Set Up  Since you are going to be thinking about this whole process over many weeks if not months, you need to keep notes on all your ideas and questions.  You cann’t know when you will want to reach back and retrieve an idea you thought should be discarded.  Start with a set of notes from half-sheets of paper or a pocket size notebook which you can keep with you on a regular basis.

Your progress is nonlineal and you can keep two or three promising ideas going at the same time as no decision is final until you make it final.  Above all you need to give yourself time to live with each idea until you know how you feel about it.

Stop Two – Purpose  Can you, in one simple sentence, state what is the purpose of your fund?  Do you want to make the purpose sentence as open as possible?  For example, the purpose of this fund is to support children’s recreation in Clarion County.  Do you want to place some restriction on the purpose?  For example, the purpose of this fund is to support children’s recreational facilities in Clarion County.  Do you want to pin the purpose down to one area of children’s recreation.  For example, the purpose of this fund is to support children’s recreational programs held at the Clarion County Park off Deer Run Road.  You may want to go a step further and identify how the grant committee will be composed or the nonprofit to benefit from the grants.

A general admonition to consider is that the less details included will make the fund easier to administer and more flexible in meeting future needs.  Society is always changing and you want your fund to flow with those changes.  If there are a restrictive clauses to meet, there may be years when it is not possible to award a grant.

Stop Three – Name  There are four ways to go with the fund name.  You can name it in memory of someone whom you loved or admired.  You can honor a living person whom you love or admire.  You can name it in honor of your family or with your own name.  Or you can go with a name that identifies the nonprofit organization you have selected as sole recipient of the fund grants.  Lastly you can identify only the field of interest in which your fund is to work.  Most of all, the name should please your fancy.

Stop Four – Types  For the individual donor or family, there are five types of trust funds you may select to use.  The first type is field of interest funds which allows the donor to identify an area of concern such as education, the family, county veterans, or the visual arts without naming a specific nonprofit as recipient.  This provides flexibility in the present and future as changes occur within the area of interest and the nonprofits active in the area also change.

The second type is donor advised funds for donors who want to participate by providing periodic advice to the foundation board concerning grant recipients.  With this kind of fund multiple generations of a family are united in a continuing commitment to their community.  Recipients of grants must be nonprofit organizations recognized by the Internal Revenue Service.

The third type is scholarship funds for students at a specific high school or university, or students resident in Clarion County persuing a specific area of study.  Usually a set of criteria for qualifying for the scholarship are set out by the donor.  This is a very satisfying type for a memorial as it can be set in the school or interest known to the person being remembered.

The fourth type is restricted funds which indentify one or more nonprofits as the specific recepients of the grants.  The nonprofit may also be included in the name of the fund but does not have to be included.

The fifth type is temporary funds.  These are not endowment funds designed to last in perpetuity, but rather they are set up for the principal and earnings to go to the benefit of a specific project such as purchasing a building, or putting on a new roof which a named nonprofit hopes to achieve sometime in the future.  For this unknown or limited period of time the principal is invested.  When it is needed the principal and earnings are redeemed by the nonprofit.  The fund is then closed.

Stop Five – Sunset  Unless you have used the broadest, most open statement of purpose there is a serious need for a sunset provision.  If for example, you have stated the purpose of the fund is to support Unrestricted Grants, or the purpose of the fund is to support education, then you don’t need a sunset provision.  If you have included details that may change in fifty or a hundred years, your sunet provision needs to allow for those outdated details to be lifted to create a new efficacy.  No one knows, for example, how education will be structured or persued in one hundred years.  School districts may not exist.

A sunset provision may state that if Clarion High School or its successor ceases to exist or reside in Clarion County the fund shall continue to support education in Clarion County.  Or a sunset provision may state that if the United Family Services or its successor ceases to exist or reside in Clarion County the fund shall become a fund serving family and children.

Stop Six – Funding  When deciding how much you want to donate or the kinds of assets you want to use for the donation, you should work those details out with your financial and tax consultants.  If you decide to start small you should set a schedule of donation goals that reach into the future.  If your fund remains small then it can do little to achieve the purpose you have set out.  You do not want the fund waiting for a hundred years before it has grown large enough to matter.

Our initial down payment is $1,000 and when the fund reaches $5,000 it can be activated.  This is alright as a starter but it does not make for a healthy mature fund.  I have named four levels of giving a donor should strive for.  The first is the Cooper Level at $50,000.  At this level the fund may make small grants.  The second is the Silver Level at $250,000.  At this level your fund will affect a measureable change in the area of your concern.  The third is the Gold Level at $500,000.  Grants from your fund will make a substantial contribution to your area of interest and your community.  The fourth is the Platinum Level at $1,000,000 and above.  If you have that much to give then you know the kind of changes your fund will have in the near future and in perpetuity.  The effect will be very large.

Settle in your mind how you feel about the details you have worked out, then give the foundation office a call at (814) 677-5085.  You are ready to sit down and explain what you want.  You are prepared.  Charles Marlin

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Our banner logo is an antlered underwater panther, mythical creature, taken from one of many prehistoric petroglyphs at Parkers Landing on the Allegheny River in Clarion County, Pennsylvania.  When low water level made fishing easy, prehistoric area residents gathered at Parkers Landing for a summer chautauqua.  They fished, feasted, socialized, governed, provisioned, and educated.

The flat rocks were cleaned, the art outlined with red ocher, then the storytellers used the petroglyphs, our antelered underwater panther for example, to teach traditions, values, behavior, skills, identity, and certainly not lease to entertain.  These are all things we hope to do with the endowment funds of the Clarion County Community Foundation.  And we locate our efforts in Clarion County as did those early artists and storytellers.

For a scholarly article on Parkers Landing rock art, see Kenneth Burkett and Edward Kaufman, “On The Rocks at Parkers Landing,” Pennsylvania Archaeologist 75(1):29-48.  If you have a chance to talk with Ken Burkett who helped me understand our logo you will find him both a gentleman and a scholar.  It will be the best part of your day.

And a special thanks to John Hink for putting together our banner.  My skills do not reach that far.  Charles Marlin

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