Seattle Foundation can help meet the philanthropic goals of private foundation clients.
By Bill Zook, senior advisor, gift planning
Seattle Foundation has a long history of helping philanthropists and their advisors explore ways to support causes close to their hearts.
Sometimes, a client’s philanthropic goals can only be met through a private foundation. Other times, setting up a fund at a community foundation, like Seattle Foundation, is the appropriate path to take. There are also times when a combination of both approaches is the best option.
Clients often choose to implement one option before supplementing it with a separate alternative or replacing it altogether. For example, a client who is considering starting a private foundation may wish to “test drive” the idea by establishing a Donor Advised Fund (DAF). In doing so, the client can develop a solid understanding of what effective grant making entails – with guidance from one of Seattle Foundation’s philanthropic advisors, who work with all of our philanthropists to ensure everyone continues to give actively, continuously and meaningfully. This also provides an opportunity to assess how family members will respond to the philanthropic efforts before creating a private foundation.
Similarly, a client who already has a private foundation might choose to work with Seattle Foundation to establish a DAF. The private foundation will then make grants to the DAF that will count as “qualifying distributions” for purposes of meeting IRS requirements. This can prove especially useful as the end of a tax year approaches.Going forward, the private foundation makes recommendations to the DAF with the support of a Seattle Foundation philanthropic advisor as previously described.
In addition, the private foundation could establish a community impact fund or an area of interest fund, which would allow Seattle Foundation to determine how best to meet urgent situations and general community needs. A client might choose as well to work with Seattle Foundation by making grants to further any of several initiatives, such as the Fund for Inclusive Recovery. Seattle Foundation, as a public charity working to address many of our region’s inequities, can direct gifts from private foundations to the programs and organizations having the greatest impact.
There are times when the private foundation is an operating foundation. In this case, Seattle Foundation can make grants to it. For example, a professional advisor once contacted our Philanthropic Services team about a client who wanted to provide substantial support to a private operating foundation but, for various reasons, wanted their donation to be made indirectly. The advisor was delighted to learn that either a DAF or a designated fund could be used to channel the contributions the client had in mind.
Seattle Foundation can also help ease the stress of managing a private foundation. The private foundation can transfer its assets to Seattle Foundation to create a DAF or a supporting organization. This will allow the client to focus their energy on identifying causes and organizations worthy of support, leaving financial and administrative matters to Seattle Foundation. If the client chooses the DAF route, then transforming a private foundation will be less complicated than expected. In any case, Seattle Foundation is willing and able to help identify considerations and offer valuable guidance as to the overall process.
To learn more, contact Bill Zook at 206.388.1722.