Guest Column by Paul Overgaard

In 2014 the Freeborn County Communities Foundation distributed grants totaling $238,000. The majority of the recipients were Freeborn County nonprofit organizations.

The grants were made from charitable family foundations established by Freeborn County residents in past years. A foundation donor’s love of community and passion for favorite charities means that causes important to them can continue to receive their support long after they are gone.

Sounds complicated, right? Well, it is really quite simple.

The most important part is the desire on the part of the donor to continue supporting a cause that has been important during their lifetime or if not a specific cause, then the general purpose of a charity that serves the needs of our county. The means for acting on that desire is to establish a charitable family foundation under the plan for the Minnesota Community Foundation.

Such a foundation can be started with a tax-deductible investment of $25,000 or more. A family foundation can make annual gifts at the donor’s direction and after the donor’s death that decision can be passed on to the donor’s children or can be delegated to the board of the Freeborn County Communities Foundation.  A charitable family foundation can also be funded through an individual’s last will and testament or by naming the foundation as a beneficiary of an IRA account, annuity or life insurance policy.

In the past, the establishment of a charitable family foundation was somewhat complicated.  Lengthy legal documents were required, trustees named to administer the foundation, handle investments, select recipients and file annual tax returns.

Now, with the help of the Minnesota Community Foundation, a person can set up their own charitable family foundation at no cost. The necessary paperwork is provided by the Minnesota Community Foundation.

Once the paperwork has been completed, a tax-deductible gift of cash, stock or other investment or property is made to the Minnesota Community Foundation.

My wife and I have found that there are several advantages to partnering with the Minnesota Foundation:

1. It is very inexpensive.

2. The Minnesota Commjunity Foundation prepares the annual tax returns.

3. Investment decisions are made by professionals.

4. The tax-exempt status of the recipient charities is confirmed to ensure the tax-exempt status of donor’s gifts is protected.

5. Donors can see how the process works during their lifetime and, thus, can feel confident about adding to the trust at death.

Individual foundations established by Freeborn County residents range in size from $25,000 to more than $2 million. The common thread in all of them is the donor’s desire to give back to the community in which they live and work. Together we can help to build a better future for those we love in a community we care about.

If you are interested in making a charitable donation that would benefit Freeborn County nonprofit organizations but do not wish to establish a charitable family foundation, we invite you to make a donation to the Freeborn County Communities Foundation at our website: https://givemn.org/project/Freeborn-County-Communities-Foundation-5001629.

We would also like to invite you to join the many other Minnesotans who will be donating to their favorite charities on Thursday for Give to the Max Day, the statewide annual fundraising event to promote charitable giving.

To learn more about establishing your own family foundation, you may contact Jill Peterson, chairwoman of the Freeborn County Communities Foundation, at 507-373-6494, Ext. 27, or your investment or legal adviser.

You may also contact the Minnesota Community Foundation directly by calling Patrice Abby, manager of community affiliates for Minnesota Philanthropy Partners at 507-461-1074.

 

Albert Lea resident Paul Overgaard is a board member for the Freeborn County Communities Foundation.