March is Women’s History Month and to celebrate, I’d like to highlight just a few of the many women who have made their mark on history by practicing smart, impactful charitable giving. Undoubtedly these women believe in advancing philanthropy through “walking the walk” and moving the needle forward on what the modern philanthropy looks like. No longer is philanthropy limited to signing a big check, today’s do-gooders are creative, dedicated, and using social entrepreneurship to draw attention to pressing concerns of the world.
Melinda Gates
Gates, who has received her MBA from Duke, co-founded the Bill & Melinda Gates Foundation in 2000 with her husband. The couple has donated more than $36 billion to different charitable initiatives! Gates has been integral in expanding the reach of the foundation to include areas of focus ranging from global education to developing preventive measures and treatments for life-threatening illnesses, like malaria, tuberculosis, and HIV/AIDS. At the helm of the Foundation, Gates has persistently worked to combat global poverty and has raised awareness about important issues that demand practical solutions like “time poverty.”
No surprises here! The benevolent media mogul has given hundreds of millions to educational causes (including establishing the Oprah Winfrey Leadership Academy for Girls), endowed her own charitable foundation, and has supported a wide range of other charities ranging in fields from environmental, to arts and culture, to humanitarian. Oprah also regularly uses her platform of fame to encourage her fans/viewers to support charities they care about.
Sara Blakely
Youngest self-made female billionaire and founder of Spanx, Blakely was an early signer of the Giving Pledge, a call to action by founders Bill Gates and Warren Buffett encouraging billionaires to donate at least half of their wealth to charity. Additionally, her company’s foundation supports programs designed to empower underserved women and girls through education, entrepreneurship, and the arts.
Dr. Marilyn Simmons
Simons is president of the Simons Foundation. With a Ph.D. in economics, Simmons was uniquely poised to grow the 1994-established private foundation into a leading funder for math and scientific research.
Dr. Priscilla Chan
As a pediatrician, Chan has incorporated her medical training into the charitable and 501(c)(4) arms of the Chan Zuckerberg Initiative, which operates with ambitious goals such as “to cure, prevent or manage all disease in the next generation’s lifetime.” Also, in 2016, Chan founded The Primary School, a private, nonprofit school in East Palo Alto, California that offers both a high-quality education and healthcare services.
Inspired yet to make your mark and leave a lasting legacy? Of course, this is just a short list. This blog post could go on for days if we let it, as so many women are power players when it comes to charitable collaboration and effective resource management.
Believe me, you don’t need to be wealthy to make a difference and maximize what you can/want to give to your favorite causes and nonprofit organizations. Contact me to discuss strategies that are unique/work for you.
There are many fantastic ways to celebrate and honor Women’s History Month. To help add to the festivities throughout the month of March, I recommend turning up my latest Spotify playlist.
Featuring a collection of empowering, inspiring songs sung by rockstar women. Feel free to crank up the tunes when you: need a positive boost, want to dance it out, or even when you’re brainstorming about how to support gender parity through charitable donations or dedicated nonprofit programs.
Who are your favorite female artists you love to jam out to? I’d love to hear from you on Facebook or Twitter. And if this playlist inspires thoughts about forming a female-focused nonprofit, or building a more representative board, or enhancing programming centered on women’s rights or women’s history? Don’t hesitate to contact me via email or phone (515-371-6077).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2019/03/Screen-Shot-2019-03-25-at-1.02.39-AM.png6521047Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-03-03 20:57:392020-05-18 11:28:35Turn up the Tunes: Women's History Month
When you first read the headline to this blog post you might have been (rightfully) confused. A private foundation is a type of 501(c)(3), so isn’t this type of nonprofit tax-exempt from federal income tax? This is just one of the nuances of private foundations that can make forming and managing them complicated. Previously I’ve covered other aspects about the private foundation that are important for foundation leaders to understand including avoiding jeopardizing investments, prohibited grants, self-dealing, and payout requirements. Today let’s shine the learning spotlight on excise taxes.
Tax Exempt, But…
Even though private foundations are exempt from income tax, they are subject to an annual 2% excise tax on the income they earn on their net investment income. (This is often referred to as the private foundation excise tax.) The purpose of collecting this revenue is to fund IRS oversight of the nonprofit sector.
Can you Reduce the Tax?
In certain circumstances, the excise tax can be reduced to 1%. The tax is reduced in situations where a foundation’s distributions (measured as a percentage of assets) in a given tax year exceed the average payout rate of the foundation over the preceding five years, by an amount at least as much as the 1% tax savings the foundation will obtain. This is called the “maintenance of effort test” and was implemented to make certain that tax savings are being used for added charitable expenditures as opposed to being “pocketed” by the foundation.
Managing and administering the private foundation excise tax can be difficult and complicated, particularly because of the two-tier tax structure. This can also be challenging in decision-making because it somewhat discourages foundations to consider increasing gift for unanticipated grants, such as in the case of a natural disaster or other relief efforts. To comply with the private foundation excise tax requires staff to constantly monitor and adjust spending and savings in order to calculate the correct tax rate.
I highly recommend enlisting an attorney well-versed in private foundation operations in order to stay on top all requirement and avoid detrimental missteps. You may also want to consider implementing training for foundation board members. It’s also a good idea to implement sound policies and procedures and update them when necessary as the foundation evolves and circumstances change.
Questions? Want to learn more about how to make certain your private foundation is set up for success from the start? Don’t hesitate to contact me for a free consultation. You can also download my free, no-obligation nonprofit formation guide!
Celebrating Women’s History Month: Inspiring American Philanthropists
Charitable GivingMarch is Women’s History Month and to celebrate, I’d like to highlight just a few of the many women who have made their mark on history by practicing smart, impactful charitable giving. Undoubtedly these women believe in advancing philanthropy through “walking the walk” and moving the needle forward on what the modern philanthropy looks like. No longer is philanthropy limited to signing a big check, today’s do-gooders are creative, dedicated, and using social entrepreneurship to draw attention to pressing concerns of the world.
Melinda Gates
Gates, who has received her MBA from Duke, co-founded the Bill & Melinda Gates Foundation in 2000 with her husband. The couple has donated more than $36 billion to different charitable initiatives! Gates has been integral in expanding the reach of the foundation to include areas of focus ranging from global education to developing preventive measures and treatments for life-threatening illnesses, like malaria, tuberculosis, and HIV/AIDS. At the helm of the Foundation, Gates has persistently worked to combat global poverty and has raised awareness about important issues that demand practical solutions like “time poverty.”
Oprah Winfrey
No surprises here! The benevolent media mogul has given hundreds of millions to educational causes (including establishing the Oprah Winfrey Leadership Academy for Girls), endowed her own charitable foundation, and has supported a wide range of other charities ranging in fields from environmental, to arts and culture, to humanitarian. Oprah also regularly uses her platform of fame to encourage her fans/viewers to support charities they care about.
Sara Blakely
Youngest self-made female billionaire and founder of Spanx, Blakely was an early signer of the Giving Pledge, a call to action by founders Bill Gates and Warren Buffett encouraging billionaires to donate at least half of their wealth to charity. Additionally, her company’s foundation supports programs designed to empower underserved women and girls through education, entrepreneurship, and the arts.
Dr. Marilyn Simmons
Simons is president of the Simons Foundation. With a Ph.D. in economics, Simmons was uniquely poised to grow the 1994-established private foundation into a leading funder for math and scientific research.
Dr. Priscilla Chan
As a pediatrician, Chan has incorporated her medical training into the charitable and 501(c)(4) arms of the Chan Zuckerberg Initiative, which operates with ambitious goals such as “to cure, prevent or manage all disease in the next generation’s lifetime.” Also, in 2016, Chan founded The Primary School, a private, nonprofit school in East Palo Alto, California that offers both a high-quality education and healthcare services.
Inspired yet to make your mark and leave a lasting legacy? Of course, this is just a short list. This blog post could go on for days if we let it, as so many women are power players when it comes to charitable collaboration and effective resource management.
Believe me, you don’t need to be wealthy to make a difference and maximize what you can/want to give to your favorite causes and nonprofit organizations. Contact me to discuss strategies that are unique/work for you.
Turn up the Tunes: Women’s History Month
UncategorizedThere are many fantastic ways to celebrate and honor Women’s History Month. To help add to the festivities throughout the month of March, I recommend turning up my latest Spotify playlist.
Featuring a collection of empowering, inspiring songs sung by rockstar women. Feel free to crank up the tunes when you: need a positive boost, want to dance it out, or even when you’re brainstorming about how to support gender parity through charitable donations or dedicated nonprofit programs.
Who are your favorite female artists you love to jam out to? I’d love to hear from you on Facebook or Twitter. And if this playlist inspires thoughts about forming a female-focused nonprofit, or building a more representative board, or enhancing programming centered on women’s rights or women’s history? Don’t hesitate to contact me via email or phone (515-371-6077).
Tax Talk: Private Foundations and Excise Taxes
Nonprofits, Taxes & FinanceWhen you first read the headline to this blog post you might have been (rightfully) confused. A private foundation is a type of 501(c)(3), so isn’t this type of nonprofit tax-exempt from federal income tax? This is just one of the nuances of private foundations that can make forming and managing them complicated. Previously I’ve covered other aspects about the private foundation that are important for foundation leaders to understand including avoiding jeopardizing investments, prohibited grants, self-dealing, and payout requirements. Today let’s shine the learning spotlight on excise taxes.
Tax Exempt, But…
Even though private foundations are exempt from income tax, they are subject to an annual 2% excise tax on the income they earn on their net investment income. (This is often referred to as the private foundation excise tax.) The purpose of collecting this revenue is to fund IRS oversight of the nonprofit sector.
Can you Reduce the Tax?
In certain circumstances, the excise tax can be reduced to 1%. The tax is reduced in situations where a foundation’s distributions (measured as a percentage of assets) in a given tax year exceed the average payout rate of the foundation over the preceding five years, by an amount at least as much as the 1% tax savings the foundation will obtain. This is called the “maintenance of effort test” and was implemented to make certain that tax savings are being used for added charitable expenditures as opposed to being “pocketed” by the foundation.
Managing & Administering
Managing and administering the private foundation excise tax can be difficult and complicated, particularly because of the two-tier tax structure. This can also be challenging in decision-making because it somewhat discourages foundations to consider increasing gift for unanticipated grants, such as in the case of a natural disaster or other relief efforts. To comply with the private foundation excise tax requires staff to constantly monitor and adjust spending and savings in order to calculate the correct tax rate.
How to Prepare Your Private Foundation
I highly recommend enlisting an attorney well-versed in private foundation operations in order to stay on top all requirement and avoid detrimental missteps. You may also want to consider implementing training for foundation board members. It’s also a good idea to implement sound policies and procedures and update them when necessary as the foundation evolves and circumstances change.
Questions? Want to learn more about how to make certain your private foundation is set up for success from the start? Don’t hesitate to contact me for a free consultation. You can also download my free, no-obligation nonprofit formation guide!