Your Guide to Effective Giving Through
WESTERN LANE COMMUNITY FOUNDATION
Western Lane Community Foundation (WLCF) is a nonprofit organization that administers charitable funds established through gifts and bequests from individuals, businesses, and other organizations. WLCF makes grants or other distributions from these funds to qualified organizations in western Lane County. Unless designated by a donor, WLCF defines its borders as the same as those of Siuslaw and Mapleton school districts.
WLCF's mission is to improve life in western Lane County and promote philanthropy. A primary part of this mission is to build an endowment fund that will benefit all the people of its community. Donors have flexibility to create named, permanent funds that benefit charitable, educational, cultural, human services, and medical nonprofit organizations or only certain types of nonprofit organizations.
WLCF offers a variety of funds enabling donors to achieve their charitable objectives. While gifts of any size are welcomed, $10,000 is usually required to create a named, permanent fund. The donor may, however, enter into an agreement with WLCF to begin building a permanent fund with an initial gift of $1, 000. Generally, the donor and WLCF enter into a formal fund agreement that describes the gift, outlines the administrative procedure, and defines the charitable goals of the fund. To assure mutual understanding, donors are encouraged to review provisions in wills and trust with WLCF.
WLCF offers donors a great deal of flexibility in designating the operation and charitable goals of their fund. A fund agreement can be tailored to provide donor recognition or anonymity; active or passive participation in the grant making process; and broad or specific charitable goals.
Incorporated in 1974, Western Lane Community Foundation is recognized by the Internal Revenue Service as exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code of 1986.
WLCF is governed by a nine member volunteer board of directors. One each is nominated by the Mayors of Florence and Dunes City, the Chairperson of the Siuslaw and Mapleton school districts, three by the Florence Rotary Club and two appointed by the board itself. This process provides a cross-section of demonstrated leadership in community affairs and interest. A primary responsibility of the board of directors is to assure that each permanent fund is managed in an efficient, thoughtful way, forever.
As you read through this booklet, we hope you will find that creating a named, permanent fund within the WLCF endowment would be a very positive way to leave your mark on the Florence, Mapleton, Dunes City area.
WHY GIVE THROUGH WLCF?
PERMANENCE: A donor can create a fund with the knowledge that it will be managed in perpetuity and that the gift always will serve a useful purpose. Potential grantees are investigated and grants are monitored by WLCF. Should the original intended purpose of a gift become unnecessary, incapable of fulfillment or inconsistent with changing charitable, educational, medical, and social needs, the board can apply the fund to purposes which closely parallel those the donor had specified without the need for a cy pres application to a court. This variance power is included in every community foundation's charter.
RECOGNITION: By establishing a named, permanent fund with WLCF, a donor can give his or her family name a place in the philanthropic history of the greater Florence area. The fund is listed in the WLCF annual report and all grants made from the fund are identified to the recipients as coming from the donor's fund and WLCF.
FLEXIBILITY: Recognizing that community needs are certain to change, many donors allow the WLCF grants program to select the charitable causes and institutions to be assisted. A donor can, however, specify the particular area of community life to which his or her fund may be applied, name the specific agencies to which grants shall be given, and even advise WLCF as to what charitable organizations should receive grants.
EFFICIENT FINANCIAL MANAGEMENT: Generally, the assets of permanent funds are commingled with other WLCF property for investment purposes. WLCF has a revocable agreement with OCF to manage part of its endowment. Each permanent fund, therefore, enjoys the benefit of being part of a large, diversified, professionally managed portfolio. WLCF procedures assure that investment decisions are prudent and produce a reasonable rate of return.
TAX BENEFITS: Donors to WLCF are eligible to receive the maximum income tax advantage of giving to a public charity. An overview of the income tax benefits of gifts of cash, appreciated property, and life insurance is found under the header "Ways to Establish a Fund" of this leaflet. The extent of such tax advantages will depend on the particular circumstances of each donor.
TYPES OF FUNDS
DISCRETIONARY FUND: The donor may choose to make a gift or bequest for the broad charitable purposes of the Foundation. WLCF makes grants from these funds to nonprofit organizations providing educational, health, human, and cultural services In western Lane County.
FIELD-OF-INTEREST FUND: The donor may direct that a gift or bequest be used for specific types of programs; for example, children and youth, medical services, or the arts.
SCHOLARSHIP FUND: The donor may specify that academic scholarships be awarded to graduates of Siuslaw or Mapleton High Schools or other institutions.
ADVISED FUND: A provision may be added to a gift agreement requiring WLCF to seek advice from the donor, or persons named by the donor, on distributions to be made from the fund. Advice cannot be binding on WLCF, but is given full and careful attention.
DESIGNATED FUND: The donor may name one or more charitable organization(s) to be assisted by the fund. Should the designated organization(s) cease to exist or the purpose it served become obsolete, WLCF has the responsibility and authority to re-direct the distributions to another similar charitable purpose.
AGENCY ENDOWMENT FUND: A charitable organization may transfer all or a part of its endowment fund to WLCF to participate in WLCF's investment program.
SIUSLAW FUND: Gifts or bequests of any size may be added to WLCF’s Siuslaw Fund. WLCF makes grants from this fund through its annual grants program to worthy applicants in western Lane County. Gifts, memorials, or bequests will be recognized in the WLCF annual report.
ADMINISTRATIVE FUND: WLCF also encourages donations in any amount to WLCF to offset WLCF's operating Fund.
WAYS TO ESTABLISH A FUND
CASH GIFTS: Cash gifts can be in the form of currency, check or money orders. Cash gifts are deductible up to 50% of the donor's adjusted gross income with a five-year carryover of the excess. Checks or money orders should be made payable to Western Lane Community Foundation.
APPRECIATED PROPERTY: Gifts of appreciated securities or real estate may allow a donor to make a substantial contribution and also gain important tax advantages. In most cases, the donor may deduct the fair market value of the gift up to 30% of the donor's adjusted gross income with a five-year carryover period for the excess. Except in limited situations, the donor incurs no capital gain on gifts of appreciated property.
LIFE INSURANCE: A donor who irrevocably transfers life insurance to WLCF can claim an income tax deduction for the policy's cost basis or an amount roughly equal to cash surrender value, whichever is less. The deduction is limited to 50% of the donor's adjusted gross income with a five-year carryover for the excess. To be entitled to a deduction, the donor must make WLCF the owner and beneficiary of the policy and give up all incidents of ownership; the right to change the beneficiary, borrow against the policy, and have dividends applied against the premiums. Subsequent premium payments made by the donor will be income tax deductible.
STOCK OPTION: A corporation can grant WLCF an option to purchase a corporation’s stock at some future time at a price fixed at the time the option is granted. When WLCF exercises the option, the corporation is allowed a charitable deduction measured by the excess of the stock's fair market value on the exercise date over its option price.
BEQUEST: A donor may create or add to a permanent fund or to the Siuslaw Fund through a bequest in a will or trust. WLCF and the donor’s fund can be named as the residuary beneficiary of a donor's estate, as the recipient of a stated sum or contingent bequest, or as the ultimate recipient of the assets of a charitable remainder trust. Bequests are deductible for federal estate and Oregon inheritance tax purposes.
PRIVATE FOUNDATION: Private foundations can transfer their assets to WLCF to establish a donor's advised fund or supporting organization. In either case, the private foundation's name and philanthropic goals can be retained. No tax or penalty is assessed on such transfers.
CHARITABLE REMAINDER TRUST: A charitable remainder trust is a separate trust between the donor and a trustee of the donor's choosing. Two highly structured plans were created by the Tax Reform Act of 1969: The Charitable Remainder Unitrust and the Charitable Remainder Annuity Trust. In each case the donor makes an irrevocable transfer of property to the trust; the donor retains the right to receive income and/or create an income L interest for another person; the donor receives a partial income tax deduction in the year of the gift; the donor realizes no immediate capital gain on the transfer to or subsequent sale by the trust of the appreciated property; and, at the end of the trust, usually at the death of the last income beneficiary, the remaining trust assets are added to or used to create a permanent fund with WLCF.
POOLED INCOME FUND: Through WLCF a donor can make a gift of cash or marketable securities to The Oregon Community Foundation’s Pooled Income Fund, retain the right to received a lifetime income from the gift property and/or create a lifetime income interest for another person, and, at the death of the last income beneficiary, direct that the remainder interest be added to WLCF's Siuslaw Fund or a named permanent fund. Tax benefits are similar to a charitable remainder trust. An initial gift of only $5,000 is required to participate in this fund.
CHARITABLE LEAD FUND: Under a charitable lead trust, the initial income beneficiary is WLCF, but its interest terminates at a specified time and the trust continues for the benefit of or terminates in favor of one or more individuals, such as the donor's children or grandchildren.
CHARITABLE GIFT ANNUITY: Through WLCF a donor may contract with The Oregon Community Foundation to transfer cash or marketable security to OCF in return for a fixed dollar payment to be received quarterly, semi-annually, or annually. The donor can name him/herself sole annuitant or designated another annuitant, either solely, concurrently, or consecutively. The donor may designate that, upon the death of the last annuitant, the unused portion be added to the Siuslaw Fund of Western Lane Community Foundation.
WLCF MONEY MANAGEMENT
WLCF has an agreement with the Oregon Community Foundation in which OCF manages the endowment funds of Western Lane Community Foundation. Through this arrangement, each fund is accounted for separately while benefiting from being professionally managed as part of a larger portfolio. OCF directs investments of approximately $200,000,000 with a proven, outstanding record among the nation’s foundation/endowment fund managers. A donor may request that his or her fund be invested separately in a socially responsive investment fund.
INVESTMENT POLICY
WLCF recognizes that endowment funds exist to provide a perpetual resource for charitable purposes and that investment decisions, on balance, should be less speculative than those for personal investment. Its money management agreement with OCF follows a total return strategy with the intent of maximizing the long-term total return of the entire portfolio both from market value increases (realized and unrealized gains) and from current yield (interest and dividends).
GRANT PAYOUT POLICY
A grant percentage payout rate for permanent funds is determined from time to time based upon the expected total return on investment of those funds. Any net increase beyond that distribution accrues to the principal of the fund. Currently that distribution is 5% of the average fair market value of the permanent fund, using a 13 quarter trailing average. New permanent funds are invested for a minimum of six months before inclusion in the valuation for distribution.
ADMINISTRATIVE CHARGES
WLCF assesses each permanent fund a nominal fee to defray a portion of administrative and investment expenses and governmental fees. It is expected that donors cover the costs, such as appraisals, in establishing any new funds. Since WLCF does not have a paid staff, its operating expenses are minimal.
PROFESSIONAL SUPPORT
Although WLCF does not have paid professional financial staff, the Executive Director and the board benefit from the counsel, experience and management strength of the Oregon Community Foundation.