January 1998
VOLUME 5, ISSUE 5
PhiknthropvJoumal
A nonprofit newspaper about the nonprofit community H a #
OF NORTH CAROLINA
Gone Are the Days of the Simple Do
N A T 10 N
Communily foundations extend
benefits of planned giving
PlaiiitedI
The Community Foundation of
Greater Greensboro has estab
lished a planned giving sen/ice to
help nonprofits make the most of
complex gifts. Other community
foundations offer similar kinds of
assistance to make the process
more accessible.
By Leslie Waugh
If the words “charitable remain
der trust” make you break out in a
cold sweat, take heart: community
foundations can help nonprofit orga
nizations simplify the complexities
of planned giving, a fundraising vehi
cle that has the potential to reap
huge rewards.
Planned giving has long been a
powerful staple of development pro-
ii Nonprofits use legacy
societies to promote giv
ing novy. See page 14.
grams at universities, hospitals and
other large Institutions, but smaller
nonprofits typically have not been
able to afford their own experts.
Last May, the Community
Foundation of Greater Greensboro
launched a formal planned giving
service to assist those kinds of
groups. The service is available at no
charge to nonprofit managers and
individuals interested in exploring
planned giving.
“We’re providing the planned giv
ing service to small nonprofit organi
zations that, generally .speaking, are
Planned giving specialist John Farmer (left) discusses services
offered by the Community Foundation of Greater Greensboro with
Mike Aiken (center) and John Rosser of Greensboro Urban Ministry.
Photo courtesy of Community Foundation of Greater Greensboro
unable to pursue it on their own,”
says John Fhrmer, planned giving
specialist for the foundation.
“A community foundation is a
natural place to put planned giving
expertise at the benefit of other
smaller nonprofits,” he says. “We
have a lot of expertise in fund and
trust management.”
The foundation’s advising com
mittee is made up of about 20 attor
neys, trust officers, accountants and
financial advisers who provide tech
nical assistance and serve as
liaisons with potential donors and
officers at other foundations.
Community foundations, one of
the fastest growing areas of orga
nized philanthropy, are publicly sup
ported charities that administer |
funds contributed by individuals, I
other foundations, businesses and
community organizations.
Historically, community founda
tions have a long tradition of manag
ing planned gifts, says Shannon St.
John, executive director of the
Triangle Community Foundation.
“We’ve developed expertise in this
arena that many community founda
tions are now sharing with other
nonprofits.”
While many community founda
tions offer advice on and manage
planned gifts, F’armer says, the
Greensboro foundation strives to
offer a full-service program. It is
designed to educate board members,
actively seek potential donors, assist
donors in drafting legal documents
and provide reference materials on
planned giving. It was created in
part with grants from the Cemala,
Hillsdale and Z. Smith Reynolds
foundations.
Look for GIFTS, page 2
giving
primer
Plonned gifts have become increosinglypopulor because of their significant tax
odvantoges and ability to provide lifetime income. The most common types of
plonned gifts include:
• BeqaesI — Charitable gift upon deoth of donor. ^
• Charitable gift aanuity — Contract between charity and donor.
In exchange for donotion, chority agrees to poy fixed poyment for life to donor or
person of donor's choosing.
• Peeled! incenie fwad-—Often compared to mutoal fund. Charity
"pools" contributions for investment purposes. Donor contributes remoinder interest
irrevocobly to charity and retains life-income interest for one or more beneficiaries.
• Charif able remainder f rws#,.-^ Trust thot provides income to
individuol for life or a specific period of time. At end of time period, trust principal
is distributed to chority. In charitable annuity trust, payout is set percentage of
trust's original value, while in charitoble remainder unitrust, income is based on
percentage of fair market value of trust assets.
• Charitable lead trust -— Assets ore placed in trust with specified
omount of income, either fixed or percentage of principal, generated by trust to be
distributed to chority. At end of trust term, principol con be returned to donor or
• Retained life estate Donor gives home to charity, while
retaining right to live in house for remainder of his or her life.
Fidelity makes mark
on charitable giving
Fidelity Investment's charitable
gift fund has skyrocketed in five
years to become the 12th-largest
U.S. charity.
By Rachel Mum
In 1992, Fidelity Investment cre
ated a charitable gift fund that gives
individuals and organizations an
alternative to creating their own
foundations.
Since then, Fideiity has made
neariy S500 million in grants from
that fund to more than 50,000 chari
ties around the worid. TTie fund’s
assets of nearly $1 billion placed it
12th in the most recent ranking by
The Chronicle of Philanthropy of
the 400 largest national charities —
up 10 places from 1996.
The fund was the brainchild of
Fidelity Chairman Edward C.
Look for FIDEUTY, page 7
United Way holds an orientation session in
Winston-Salem for nonprofits interested in its
Excellence in Service Quality Awards, a pro
gram modeled after the Malcolm Baldridge
National Quality Awards.
By Kelly Preupp Lojk
Winston-Salem
United Way of America is promoting a con
cept among nonprofits that has long been a sta-
A journey, not a destination
Qualify movement hits nonprofit
sector
pie of business consultants’ lingo: Quality.
While nonprofits have always been con
cerned with doing their jobs well, the Excellence
in Service Quality Awards program seeks to help
nonprofits think about their “business” in a
more formal, structui-ed way to increase effi
ciency and improve performance.
In November, United Way of Forsyth County
hosted an orientation session for about 50 indi
viduals interested in the program. The Wmston-
Salem orientation, open to all nonprofits, was
one of five held in the U.S. last year.
The program, modeled after the for-profit
sector’s Malcolm Baldridge National Quality
Award, presented its first awards in 1994.
United Way of Wake County was among the 1995
awardees. In 1996, United Way of America
opened up the program to all nonprofit human
service organizations located in the U.S.
The mantra of the movement — “quality is a
journey, not a destination” — underscores the
program’s focus on continuous improvement.
“Receiving an award is not the main goal by
any means,” says Ron Drago, who heads United
Way of Fbrsyth County and was president of
United Way of Wake County wlien it received an
award.
The purpose of the program, Drago says, is
to change the culture of an organization and
adopt a philosophy of excellence.
“It is important to understand that an orga
nization never reaches perfection, that an orga
nization needs to constantly he looking at its key
processes and be improving on them.”
Look for QUALITY, page 5
Connections 3
Grants & Gifts 15
In January 15
Opinion 10
People 16
Professional Services..!7
1 , NOMWioms :
1 FOUNDATIONS
1 VOLUNTEERS
1 CORPORATE ^VMe
Rising to the occasion
VOICES, a Raleigh nonprofit
literacy organization, aims to
do more than just teach read
ing and writing.
Honoring heroes
The Z. Smith Reynolds
Foundation recognizes the
work of three Tar Heel
humanitarians with the Nancy
Susan Reynolds Awards.
Helping hands
With a November appear
ance in the Tar Heel state,
Gen. Colin Powell helps the
state gear up for the
Governor's Summit on
Volunteerism in Greensboro.
Public relations lesson
Ramada hotels become the
first official corporate sponsor
of Childreach, the U.S. com
ponent of PLAN International,
which sponsors 91,000 chil
dren in 42 countries.
• Page 4
• Page 6
• Page 8
• Page 12
\ FUNDtWi
Widening the circle
Legacy societies provide
lessons in planned giving
and raise awareness about
estate planning, an exercise
that isn't just tor the very
wealthy.
• Page 14