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Category: philanthropy

Published on Leave a comment on The Samwick Family Fund

Last year at this time, I was scrambling to make charitable donations to all manner of local and national organizations. The year-end scramble comes from the desire to claim the tax deduction for 2007 instead of 2008--the year of delay would reduce the present value of the deduction.

Earlier this year, we made our first gift of appreciated securities to a charitable organization. The VoxWife is having a college reunion next year, and we decided to make a bigger gift than we normally do to commemorate that. Giving appreciated securities generates the same deduction on the individual tax form we file in April as would a gift of cash, but it also eliminates the capital gains tax that we would eventually pay on the sale of those securities. I had a particular stock in my portfolio that I thought was overvalued at the time, and so I would have looked to sell it anyway. So this was a real tax saving.

I thought at the time that it would be nice to have the same opportunity to lessen capital gains tax liability via all of the usual year-end giving, except that the year-end giving tends to be a lot of small donations to a number of organizations. For example, it is time consuming and sometimes infeasible to make a gift of appreciated securities for the few hundred bucks that we send to the United Way each year.

Earlier this fall, I discovered the Fidelity Charitable Gift Fund, and so now that's a possibility. In a nutshell, the CGF is itself a charitable organization, so an irrevocable gift of appreciated securities to it is tax-deductible and avoids the capital gains tax that would occur on a sale. The CGF then allows us to disburse the proceeds in our account to the charitable organizations we like in amounts as small as $100. The CGF invests in Fidelity mutual funds, so the giving capacity continues to grow along with the market.

There are a number of advantages to this setup. It avoids the year-end scramble--we can make one gift to the CGF equal to roughly the total that we want for all of the charities, and then direct the CGF to give to the individual charities at our convenience. It saves on some of the record-keeping for tax purposes--it is just the one gift that we need to track, since the subsequent disbursements from the CGF are not relevant to our tax form. For another summary and some illustrative examples, see this recent story on donor-advised funds from USA Today.

Published on Leave a comment on The Wisconsin Naming Partnership

This is a brilliant idea:

Alumni Give $85 Million to Name Wisconsin School of Business
The Wisconsin School of Business at the University of Wisconsin-Madison has received an unprecedented gift totaling $85 million from a small group of alumni who have formed the “Wisconsin Naming Partnership” to support the school’s mission.

This innovative partnership provides a naming gift that will preserve the Wisconsin name for at least 20 years. During that time, the school will not be named for a single donor or entity. This unprecedented naming partnership will uphold tradition and greatly enhance the value of the school to students, the campus and the state.

The Wisconsin naming gift is the first of its kind received by a U.S. business school. Conventional business school naming gifts adopt the name of a single donor in perpetuity. By preserving the Wisconsin name for 20 years, this gift leaves open the option of future naming gifts.

UW-Madison Chancellor John D. Wiley calls the gift “a creative act of philanthropy and a major milestone for our university.”

Why would a school want to keep open the opportunity to name itself? The answer seems to be that the price tags for naming business schools are going up faster than just about anything, including the returns to university-managed endowments. Perhaps this is because naming schools is the province of the ultra-rich, who get where they are because they can build wealth faster than conventionally managed funds. So if the school sells the name today and invests the money, it gives up the opportunity to sell the name for a higher current value later on. Wisconsin's solution is to rent the name for 20 years. It allows the school to use a large gift today, without foreclosing the possibility of a much larger naming gift in the future. To really determine how much value it adds, we would have to make assumptions about what the giving behavior of the members of the partnership would have been over that period in the absence of this gift (with or without a conventional naming gift).

The Milwaukee Journal Sentinel reports on it here, including a list of other large gifts to business schools in past years.

Published on Leave a comment on Supply and Demand at Foundations

This looks like a great move for the Ford Foundation:

The Ford Foundation has selected a dark-horse candidate with little experience in institutional philanthropy as its new president.

Luis A. Ubiñas, who has worked for McKinsey & Company, the consulting firm, for 18 years, will lead the organization, the nation’s second-largest foundation, with $11 billion in assets.

Mr. Ubiñas’s appointment, to be announced today, is expected to stun the nonprofit world, which has been speculating about who in the field would succeed Susan V. Berresford, Ford’s influential leader for more than a decade, when she retires in January.

Increasingly, however, high-profile nonprofit jobs are going to people who have done well in the business world or in politics, a reflection on the pressure on charities and foundations to become more accountable.

I would not discount the role of the supply side of this market--talented people like Ubiñas are likely to see his new job as very similar to his old job, and over time, they have been making themselves more available to the non-profit world.

From my vantage point, this trend will continue as current generations of students make their way through the workforce. To a greater degree than past generations, they will spend some of their time in the private sector and some of it in the public and non-profit sectors, focusing on the skills they are developing that are applicable to similar challenges in all fields.

Published on Leave a comment on A Great Strides Thank You

It was a fantastic weekend in Grand Rapids for the annual Great Strides walk for Cystic Fibrosis. Here's a picture of Ally's Allies. Allison is sitting on her grandmother's lap near the middle, next to her parents, all with purple shirts on. The picture was taken at the conclusion of the walk, in Calder Plaza. My son and I are on the upper right. My wife and daughter are on the upper left.

I would like to say a heartfelt "thank you" to everyone who contributed through this appeal. I'll keep the link to Allison's page and Cystic Fibrosis in the sidebar, for those of you who are interested in how she's doing and in how the treatment of this disease is improving.

Published on Leave a comment on Great Strides for Cystic Fibrosis

In what is now an annual event in the Samwick household, the four of us make a trip to Grand Rapids, Michigan, to participate in the Great Strides walk for Cystic Fibrosis. CF is a devastating genetic disease that affects tens of thousands of children and young adults in the United States. Research and care supported by the Cystic Fibrosis Foundation are making a huge difference in extending the quality of life for those with CF. Those of you who conduct or follow the health outcomes literature, or who are curious about how to improve medical treatment in this country, will find this article in The New Yorker from 2004 to be of interest as well.

We walk for the Woodhouse family, dear friends whose daughter Allison has battled this disease every day since birth (and even before). We've learned a lot about courage from her story. If you would like to support us in our efforts to raise money to help children and families like them, then please make a pledge here.

Published on Leave a comment on On MLK Day

I remember a trip to Atlanta about twelve years ago during which I visited The King Center. I remember the visit each year particularly on this day, as it was a moving experience and a stark reminder that people like Martin Luther King, Jr. emerge in this world far too infrequently and that his work is still so far from finished.

I consider many of the current celebrities who claim to have succeeded him in his cause to be charlatans at their very best. In light of that, it is important to keep his legacy alive, in as honest a manner as possible. Please consider a donation to the King Center, or a similar gesture, as a way to help in that capacity. Its mission is:

  • To develop and disseminate programs that teach the world about Dr. King's philosophy of nonviolence and interracial cooperation through network organizations
  • To build a national and international network of organizations that, through sanctioned programs, raise awareness and understanding of Dr. King's legacy and continue his teachings
  • To monitor and report on the impact of Dr. King's legacy on the world
  • To maintain visitor services for the Freedom Hall complex in Atlanta; with over 630,000 visitors annually, the King Center is the most visited cultural and tourist attraction in the Southeast United States
  • To provide historical reference resources on the life and work of Dr. Martin Luther King, Jr. and the modern civil rights movement through the King Library and Archives

Published on Leave a comment on Bernie Marcus Comes to Town

On Friday, the Rockefeller Center was pleased to welcome Bernie Marcus, co-founder and former CEO of The Home Depot, as the Inaugural Portman Lecturer in the Spirit of Entrepreneurship. If we were to look across college campuses today and examine the list of people whom they invite to speak, I think that entrepreneurs would be the least well represented group relative to the contributions they make to society. And there really is no one who better exemplifies that than Bernie Marcus. He's the son of Russian immigrants, and a self-made man who has given back to his communities--primarily Atlanta, Jewish causes, and the medical field--many times over.

He viewed his contribution to the economy as making it possible for the United States to become a nation of "do-it-yourselfers" by putting everything they would need under one roof and doing so on a scale that would lower the prices they would have to pay. When asked (the presumably familiar) question of "What about your competition?", he gave a two part response. First, for the big box competitor, it was all-out warfare. Second, for the smaller hardware and other stores, he said that they shouldn't expect to survive if they couldn't adapt to provide a better or different service at a good value. He cited some examples of smaller stores that had done so.

Read the coverage of the event in the student newspaper.

Published on Leave a comment on Catalogue for Philanthropy, Meet Irony

The Catalogue for Philanthropy has released its new Generosity Index, and according to the updated version (not posted at the moment), New Hampshire again ranks last. This is not a post griping about my home state's ranking--what my neighbors are doing for charity is of minimal interest to me as my family makes its giving decisions. But New England states have apparently looked for alternative measures that they claim are more fair. The Boston Foundation has released some reports to this effect.

We find the Associated Press on the case, dutifully reporting on what the principal actors have to say:

"We believe that generosity is a function of how much one gives to the ability one has to give," said Martin Cohn, a spokesman for the Catalogue for Philanthropy, a Boston-based nonprofit that publishes a directory of nonprofit organizations.

That seems like a reasonable premise, but it doesn't necessarily follow that any function of those two characteristics is a good one. This seems to be the thrust of the Boston Foundation's critique:

"If everyone in Massachusetts gave 100 times as much to charity as we do today and everything else remains the same, we wouldn't get above the bottom half of the chart," said David Trueblood, a spokesman for the foundation. "And no matter what Mississippi did, it couldn't fall below 22nd or 23rd."

This seems to be an accurate assessment, conditional on what other states are doing, at least based on my quick look at the index that is posted. But here's the fun part of the article:

Cohn said he was disappointed that the Boston Foundation chose to attack the index without understanding that its purpose is to promote discussion about philanthropy and that it never sought to hang a label on any state.

And maybe that's a true statement of Cohn's intent, but I think it's a bit ridiculous to be disappointed in an interview for an article that wound up with the title, "New Hampshire Is Named Most Miserly State." A little self-awareness on the part of the AP would be a welcome addition, too.

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