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GR Community Foundation Is Lasting Legacy
GRAND RAPIDS — With all that has happened in the last month and a half, the Grand Rapids Community Foundation still feels its strength in the area.
The foundation, created in 1922, was the state’s first community foundation, and differs from most other foundations in the area.
“As a community foundation we work on raising assets, which is a little bit different, when you are working on raising money for a permanent endowment,” said Diana Sieger, president of the Grand Rapids Community Foundation. “It is a little bit different than if an organization was raising money to keep their doors open.”
She said the foundation works closely with donors and corporations to raise money primarily through planned giving. When an organization or individual is deliberating about how to disburse assets, the foundation offers a donor the option of creating its own donor-advised fund, in lieu of a private fund.
“We might also work with a company to set up what we call a charitable fund, helping them in how they would like to set up their giving program throughout the community,” Sieger said.
Another option the foundation offers is for a person who perhaps has an asset in the stock market that, due to recent events, isn’t performing too well and would like to increase the asset.
Sieger said what the foundation offers is a charitable gift annuity, where the donor provides the foundation with an asset. Then the foundation pays the donor on a schedule according to his or her age. And it is possible the foundation in the end will pay the donor more than the donor ever would have received through the stock market.
“The whole point of that is that they receive some tax advantage for that now,” Sieger said, “but upon their passing, that asset reverts to the foundation. But during their lifetime and potentially the life of their spouse, they can earn income off of that and sometimes those rates are a little bit better than the markets.”
She said the foundation can prepare the same type of gift annuity for a corporation.
The foundation invests its funds in 10 banks and investment firms, while an independent consulting firm monitors the performance of that portfolio. The consultant also works closely with the foundation’s money managers to ensure wise and prudent investment strategies.
But these are services that most foundations can offer, so the question remains, why a community foundation?
“I think that when you look at helping individuals and families set up a fund with a private foundation and with all the expense and administrative expense attached to that, it is a lot easier to set it up through the community foundation,” said Sieger.
“That is not to say, however, that we are in competition with the private foundations. Many people think we are and that isn’t true. But we are aligned with them and try to keep each other informed and coordinated as best we can, as well as with other foundations.”
The main difference, Sieger said, is that according to the structure in the IRS code, the community foundation is labeled as a 501(c)3, or public charity.
“Even though we are in the business of raising endowments for this community for all aspects of the community, we have our requirements and we must raise money from a variety of sources, not just from one source as would be the case with a private organization,” she said.
As a community foundation and a provider of funds to numerous local not-for-profit organizations, Sieger said the foundation so far hasn’t felt the pinch from terrorism or the hit the economy has taken. She is sure, however, the pinch will come in an indirect manner.
Sieger projects that some organizations will be affected because funds that may have previously been coming in, may now be going to New York or Washington D.C. where donors feel they are needed more.
But the foundation’s revenues come in the form of long-term planned giving, she said, which she believes means the foundation may not feel the pinch for a few years or so.
Charitable gift annuities, Sieger said, are irrevocable, so many plans that are in place cannot be taken back. “Once a person or company decides to set up the annuity, it is irrevocable because at the same time they are receiving tax advantages,” Sieger said.
“So in return for receiving the tax advantage they actually give up control of that asset, and therefore we won’t feel an effect of the economy because of the deals we have locked in.”
Besides charitable gift annuities, the Grand Rapids Community Foundation also offers donors a chance to “leave a legacy.” Families have the option of expressing a particular interest that they would wish their donation to help.
“The family can rest assured that how the earnings are spent off of the fund they set up will keep the family name alive,” Sieger said. “The needs of the future may not be evident today but might be evident 20 to 30 years from now. The foundation will be around forever and thanks to the families and individuals who leave their assets to us, we will be able to respond to those needs.”
In order to respond to the needs of the community, Sieger said people, while giving money to areas hit by the terrorist attacks, should still keep this community in mind. “Our concern is seeing the operational support for the well over 2,500 not-for-profit organizations in the area.
“It is really hard for those charitable organizations who really depend on annual appeals, like the United Way for instance. (The organization) is now attempting to raise over $16.1 million.”
Sieger also added that she feels the local community has the capability of not only supporting those suffering the horrors of Sept. 11, but also going over and above that support to make sure the needs of this community are met.
And she reminds the community that the foundation is “for good, forever,” meaning that it will always be here to assist the not-for-profit organizations in the area.
“We are the community’s endowment and we are acting in a leadership capacity,” said Seiger. “We are seeing a real big change in the last 10 years in this foundation to really respond to and continue to make this community the best it can be. This is such a great community.”