What are my charitable giving options?
Research shows that almost 85% of Michigan residents make monetary contributions or donate goods and services, according to a 2010 survey. Charitable giving can be done on an individual basis, such as a direct gift to your favorite nonprofit, or creating a giving circle, where individuals pool their dollars and decide together where to donate their collective contributions. On a more formal, organized basis, giving options include establishing a private foundation or creating a donor-advised fund at a community foundation. Here is more information about three common organized charitable giving options:
- Private foundations
- Community foundations
- Corporate foundations & giving programs
What else should I consider?
A comparison of three options for organized giving based on the critical issues of donor control, time commitment, and tax advantages may be helpful in your decision-making process. Taking the time to answer the following questions may also help you determine the right giving option for you:
- What goals do you hope to accomplish with your philanthropy for you, your family and the community?
- What commitments of time and capital are you prepared to make to a program of charitable giving?
- What causes and institutions do you wish to support? Are they centered primarily in your local community or national/international in scope?
- Should your grantmaking last “in perpetuity” - forever?
- How deeply do you wish to be involved in the management of funds you contribute? In the selection of beneficiaries of your philanthropy?
- How would you describe current family relationships? Can you comfortably make collective philanthropic decisions now and in the future?
- How much of your estate do you wish to leave to your children? How much to charity? How will current or future income concerns affect your family or business grantmaking decisions?
What are my next steps?
In considering these questions and deciding to proceed with the creation of a more formal giving option- a private foundation, a donor advised foundation at a community foundation, or a corporate giving program - please contact the Council of Michigan Foundations (616-842-7080) for a complimentary consultation. If you are interested in creating a nonprofit that will need to do public fundraising, we encourage you to check out the Principles and Best Practices developed by the Michigan Nonprofit Association.