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Community Foundation Comments on Rules for Donor-Advised Funds, Supporting Organizations

FEB. 7, 2007

Community Foundation Comments on Rules for Donor-Advised Funds, Supporting Organizations

DATED FEB. 7, 2007
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February 26, 2007

 

 

 From:    Notice Comments

 

 Sent:    Friday, February 16, 2007 11:27 AM

 

 To:      Ardoin Elizabeth A; Copeland Sadie R; Shoemaker Ronald J

 

 Subject: FW: Comments Requested to Flesh Out New Rules for

 

                 Donor-Advised Funds, Supporting Organizations

 

 

In response to your request for comments on proposed new rules concerning Donor Advised Funds:

 

1. Based on my reading of the rules it appears that the primary target of the proposal are the so called community foundations established by some of the large financial services companies such as Fidelity, Vanguard and others. If that in fact is the case then there should be language differentiating "community based" community foundations that are truly focused on philanthropy within their narrow regions of interest, as opposed to "convenient loop hole" community foundations established by for profit corporations with little interest in seeing the funds further distributed to the non-profit community.

2. The real community foundations that have been around now for nearly 100 years depend heavily on Donor Advised Funds in order to build endowments that in turn benefit their respective communities. Without this tool, or with it seriously diminished, community foundations will find it much more difficult to attract donors and to build those endowments. On the other hand, placing some or all of the proposed rules on the commercially sponsored community foundations could in fact help the real community foundations continue their growth and resulting benefit to their communities.

3. In regard to the proposal to require an annual minimum distribution: Most of the funds that we administer distribute more than 5% of their historic dollar value each year. There are a few very small funds that do not because the donors who established them want them to grow, and from time to time make additional contributions to them to that end. Their vision is that at some future date the funds will achieve a value large enough to make significant distributions from income alone and thereby create a lasting legacy to the community in which they live and work.

 

In considering your decision whether or not to institute the proposed new rules please keep in mind that ALL "Community Foundations" are not created equal. The overwhelming majority are community based and community governed, and they therefore benefit the community where they are located. A few commercially established community foundations and similar pseudo philanthropic ventures are not so altruistic. There purpose is intended to continue to control the assets that their clients want to give away in order to reduce their taxes by giving them a vehicle to do so without having to give up the money. That is where a remedy needs to be applied. Do not "throw out the baby with the bath water" by treating community based foundations with the same regard.

Thank you for this opportunity to comment.

"We make a living by what we get, we make a life by what we give"

-- Sir Winston Churchill

 

 

Central Louisiana Community

 

Foundation

 

Cecil Myers, Executive Director

 

P.O. Box 66

 

Alexandria, LA 71309-0066

 

318-445-7702

 

cenlacf@suddenlink.net

 

Opinions, conclusions and other information in this message that do not relate to the official business of The Central Louisiana Community Foundation or its subsidiaries shall be understood as neither given nor endorsed by it. The information contained in this email and any attachments is being provided for informational purposes only and not part of an attorney-client relationship. The information is not a substitute for expert legal, tax or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.
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