How Do Donors Benefit?

Donors do not so much give to the Foundation as give through it. We make it easy for donors to give to the broadest array of charitable causes and organizations using a wide variety of assets. If you have a client considering a major or planned gift, you will find that the simplicity, flexibility, accountability, tax benefits, cost effectiveness, and value-added service of the Lubbock Area Foundation can be just what your clients are looking for.

While the creation of a private foundation may be the best choice in certain circumstances, many local donors have found the creation of a named endowment within the Lubbock Area Foundation is an attractive alternative that can achieve the same objectives.

Key Benefits

Simplicity

A named endowment can be created in a day and at no cost to the donor. Private foundations take time to start up and incur expenses associated with the creation of a new organization and on-going administrative duties.

Flexibility

Within established legal guidelines, almost any kind of charitable activity can be supported through an endowment within the Lubbock Area Foundation. Family members can be involved. Grants can be made to qualified organizations anywhere in the United States. While we concentrate on building permanent endowment, it is also possible to create funds that spend a percentage of principal or that simply “pass-through” 100% of the gift to deserving charities.

Accountability

The Foundation issues annual audited financial statements and semi-annual reports to donors regarding adherence to their wishes and sound financial practices. You, and your clients, can be assured the Foundation will be true to your client’s charitable objectives for generations to come.

Tax Benefits

As a public charity qualified under I.R.C. § 501(c)(3), gifts to the Foundation qualify for maximum tax advantages – more than a comparable gift to a private foundation. A gift of cash is deductible up to 50% of the donor’s contribution base. For gifts of appreciated property, the deduction is up to 30% of the donor’s contribution base.

Cost Effectiveness

The Foundation generally pools its separate endowments for investment purposes while retaining each as a separate entity on its books. This results in better investment opportunities with less overhead than if each endowment were invested on its own. All funds, no matter what size, benefit from professional management. Also, an endowment within the Foundation pays no tax on investment income. A private foundation can pay up to two percent federal excise tax on its net invested income and realized gain.

Administration

All endowments are covered under the Foundation’s 990 tax return. A single independent audit covers all of our 80+ funds. With the large amount of assets available for investment, we are able to negotiate lower management fees.

The end result is an increased stream of income available to local charities.

Value Added

As one of the major grantmakers within our community, the Foundation is approached by many local nonprofit organizations for assistance and we know their diverse needs. Each year we review an ever-increasing number of grant requests, audits and budgets.

Many donors enjoy working with the Foundation to identify general areas of interest and ask the Foundation to seek out worthy projects for their consideration. We can help donors remain anonymous, or generate increased publicity for their philanthropy. Finally, we can gather and screen personal solicitations creating a “one-stop center” for a donor’s personal philanthropy.