Corporate and Private Foundations are flocking in record numbers to a new breed of Popularity Contest as a marketing and funding mechanism. Most of us are very familiar with a type of Popularity Contest like what the Community Foundation of Southeast Michigan did several years ago. In order to raise funds for the arts, the Community Foundation held a 24 hour popularity contest of sorts to get donors to donate money for the arts. Donate money to the arts organization of your choice, and the Community Foundation will match your dollars. It was a huge success. Yes, some grant dollars were left on the table (mine included) because their website crashed from the traffic, but overall, the donor reaction was fantastic. The arts in metro-Detroit raised millions of dollars that day.
So it's not unusual for Foundations to use the carrot of matching grant dollars to raise funds from the public which are bestowed upon a charity. As a matter of fact, charities often approach Foundations with this idea in hopes that their donors will be called to act.
What is different about this new breed of Popularity Contest is that the public doesn't not have to use any of its own dollars to vote, and the recipient is sometimes not a charity the Foundation would otherwise support, or not even a publicly supported charity, but a private individual or business.
For years, as an advisor to high net worth individuals and nonprofits, I have advocated and given speeches on the murky area of the tax and reporting aspects Foundations giving grant dollars to private individuals for use in charitable endeavors. It is a very complicated area of the law. It used to be that Foundations would only distribute money to public charities for fear of getting in trouble with the IRS, even though the IRS has established a basic road map for making Foundation funds available to individuals doing charitable work that aligns with the Foundation's mission.
In Michigan, the low-profit limited liability company was born in an effort largely of smoke and mirrors (I own one myself, so I can say this affectionately), in order to essentially educate Foundations and their Board about the opportunity to invest and support entities and individuals who are doing projects that align with a Foundation's mission, but for any number of reasons are not organized as a public charity.
Anyhow, while the low-profit liability company has it share of proponents and skeptics, I do believe that because of this vehicle and others, and copious amounts of advisors like me validating the idea of socially responsible investing, finally major Foundations have gotten the picture. It is simply not necessary for you to be a public charity in order for a Foundation to offer its support to you.
While I am thrilled that now Foundation dollars are accessible by a greater amount of socially responsible individuals and businesses, the absolutely fascinating thing about contests like HATCH (a Popularity Contest bestowing Foundation funds on individuals with a retail idea for Detroit with the most votes) is that really the only charitable / socially conscious aspect of the businesses being funded by HATCH dollars as far as I can tell is the pure fact that these businesses will exist within the economically disadvantaged City limits of Detroit. Sure, you can be a multi-millionaire, but if you have enough votes, you too may be a Popularity Contest grant recipient.
I have on several occasions visited the HATCH website to try and determine what the eligibility criteria are for becoming a candidate for HATCH funding and also the funding mechanics and reporting responsibilities. I have never been able to find any forms to fill out or other indication of the criteria or requirements. So hopefully I'm not mistaken. But even if I am, I do believe that I could start-up a coffee shop in the inner City of Detroit and if I could find a Foundation to fund it that would be a totally legitimate Foundation investment. Most people do not realize this. Almost any inner City business idea you could come up with in a City like Detroit is an Foundation investable / charitably oriented idea if properly postured.
I don't know how many people have actually stopped to think about what HATCH (and others) is doing, and how they are doing it. It really is revolutionary. Foundations are giving popular individuals, some of whom may not even need the funds, real dollars for ideas that are simply popular. The people voting get basic details about the project, adding to the popularity aspect of the whole thing.
I impulsively donated $100 to HATCH after the initial contest and I did vote in that first round. I thought really, while this Popularity Contest is somewhat gimmicky and unfair like a high school popularity contest and while Foundations are really out for publicity and are arguably being a bit lazy about how they find good projects to support, if anyone is crazy enough like myself to start a business in Detroit, I want to support them!
Having said that, are Foundations being publicity hounds, and frankly a bit lazy about how they go about finding good projects to support? And are they throwing good money out the window by funding projects that may not be wise or aren't even off the ground yet? Projects that haven't shown the first sign of being sustainable? And, whose recipients haven't even been vetted beyond a simple application form?
Honestly, I do believe there are wiser ways Foundations could distribute dollars. On the one hand they require public charities to jump through ridiculous amounts of hoops to qualify for a typical grant, and on the other, they throw caution to the wind to back projects whose ideas/ideamakers are popular. It really is a striking contrast. Arguably neither is an ideal situation. Is there no middle ground these Foundations can take? A simple one page application and a proven idea would be a place to start!! I really think Foundations are using this platform as a publicity stunt and/or a marketing vehicle for promoting community engagement, as they couldn't possibly justify otherwise funding projects that are mere ideas or projects that the Foundation doesn't normally go near. Popularity Contests could fly in the face of prudent Foundation investing and grantmaking on so many levels.
There are so many inner City projects that are already up an running that these Foundations could proactively run out and support with greater chance of impact, but without the fanfare of a formal grant application or the fanfare of a Popularity Contest. But that route takes a whole lot more time and effort and project engagement than running a Popularity Contest.
Hey, I have an inner City coffee house that has proven to be an asset to its Eastern Market community and, as a person who also doesn't truly need the dollars, I'd be happy get a grant and would wisely place the funds! And, I think I would totally be eligible under the HATCH program, or one just like it. Why didn't I apply? Honestly, I'm just not that popular. I would never win. Even though my idea was a winner.
Honestly, it is all good. I am all for more inner City projects by anyone with the posse to win one of these annoying (from the standpoint of all my email and facebook spam) Popularity Contests. Please, bring them on! My point is not the discourage them as they have their place in the landscape of Foundation funding. But rather to contrast how far the pendulum has swung. Popularity Contests are more revolutionary than most people realize on the surface cause they are just too darn busy voting! Get out and vote!
Sunday, October 28, 2012
Wednesday, October 12, 2011
Detroit Area Business Incentives
I am attaching a link to the Detroit Economic Growth Corporation's website that has information about financial incentives for Detroit area businesses who need to make capital improvements.
http://www.degc.org/incentives.aspx
The range of incentives varies, depending on your location, the type of improvement you are making, and the type of business you are operating. While there are certainly hoops to jump through, and demographics/geographics/scope of work requirements you have to meet, these incentives exist.
As an example, the Smart Buildings program provides grant and loan dollars for certain new windows, HVAC, certain plumbing, doors, and lighting where a 15% energy savings is anticipated to be gained (and can even benefit vacant buildings with no good track record of energy costs - through computerized benefits modeling).
The Creative Corridor incentive program is offering rent subsidies for "creative" tenants making interior improvements, and grant dollars for "creative" businesses making certain nonstructural interior improvements.
The Green Grocer program is funding grocery oriented initiatives in certain parts of the City.
Other important tax credits to know about include the "New Markets Credit" (the big one Whole Foods is availing itself of in Detroit) http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5
And, the federal historic tax credit http://www.nps.gov/hps/tps/tax/incentives/index.htm
I am not a tax credit or government funding expert, but I am attempting to learn about these credits and to spread the word about them, as I believe many people (myself included) are leaving tens of thousands of dollars on the table because accessing, understanding and navigating government financial assistance is intimidating. Some of these programs may very well be scalable to help the average guy who is renovating a small building in the Detroit area - there are no dollar minimums (only maximums) that I saw in any of the programs I read about.
The best thing about these DEGC administered incentives is that the City of Detroit is NOT involved! The programs are administered by the responsive and capable people at the Detroit Economic Growth Corp.
http://www.degc.org/incentives.aspx
The range of incentives varies, depending on your location, the type of improvement you are making, and the type of business you are operating. While there are certainly hoops to jump through, and demographics/geographics/scope of work requirements you have to meet, these incentives exist.
As an example, the Smart Buildings program provides grant and loan dollars for certain new windows, HVAC, certain plumbing, doors, and lighting where a 15% energy savings is anticipated to be gained (and can even benefit vacant buildings with no good track record of energy costs - through computerized benefits modeling).
The Creative Corridor incentive program is offering rent subsidies for "creative" tenants making interior improvements, and grant dollars for "creative" businesses making certain nonstructural interior improvements.
The Green Grocer program is funding grocery oriented initiatives in certain parts of the City.
Other important tax credits to know about include the "New Markets Credit" (the big one Whole Foods is availing itself of in Detroit) http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5
And, the federal historic tax credit http://www.nps.gov/hps/tps/tax/incentives/index.htm
I am not a tax credit or government funding expert, but I am attempting to learn about these credits and to spread the word about them, as I believe many people (myself included) are leaving tens of thousands of dollars on the table because accessing, understanding and navigating government financial assistance is intimidating. Some of these programs may very well be scalable to help the average guy who is renovating a small building in the Detroit area - there are no dollar minimums (only maximums) that I saw in any of the programs I read about.
The best thing about these DEGC administered incentives is that the City of Detroit is NOT involved! The programs are administered by the responsive and capable people at the Detroit Economic Growth Corp.
Thursday, September 29, 2011
New Family Limited Partnership Case - Turner
Turner v. Commissioner is a very interesting case that addresses two legal and tax issues related to lifetime estate planning, including:
1. Estate tax inclusion of lifetime transfers of interests in family limited partnerships; and,
2. Proper drafting and administration of Crummey withdrawal rights in order to qualify indirect transfers to an irrevocable trust as nontaxable gift of a present interest (shelter gifts under the tax-free annual exclusion amount).
Estate Tax Inclusion of Gifts FLP Interests.
In Turner, the Court held that certain lifetime transfers by the decedent of limited partnership interests to children were subject to estate tax inclusion in the decedent's estate under a subsection of IRC Section 2036 (transfer with retained enjoyment).
Certain uncommon and "bad facts" existed that led the Court to this conclusion, demonstrating the importance of proper drafting and administration of family limited partnerships:
The decedent and his wife were the sole general partners, managing and controlling the partnership. (This is VERY uncommon in the world of properly executed partnership arrangements);
Decedent received an excessive management fee where few if any management services were actually provided;
The partnership operated like an investment account from which withdrawals may be made at will;
The partnership agreement provision that gave decedent and his wife as general partner the right to amend the agreement without consent of the limited partners. (This is VERY uncommon in the world of proper family limited partnership planning, and an important factor in the Court's decision);
Decedent transferred a significant portion of the decedent’s overall wealth to the partnership;
Decedent took distributions from the partnership “at will” ;
Decedent to disproportionate distributions (no distributions were made to any other partners in a year when $86,815 of payments were being made for the decedent and his wife, including the monthly management fees and $46,170 for estimated income taxes);
The decedent used partnership assets for personal expenses and personal uses (such as for making gifts, paying life insurance premiums on policies not owned by the partnership), and paying legal fees for the decedent’s estate planning; and,
The decedent personally paid debts and buying assets for the partnership, and failed to contemporaneously document those transactions as advances to the partnership.
Conclusion: By avoiding these uncommon "bad facts" and taxpayer pitfalls, one can properly execute and administer a family limited partnership arrangement that should not result in estate tax inclusion for lifetime gifts of limited partnership units.
2. Crummey Withdrawal Powers
An insurance trust was properly drafted to allow for Crummey withdrawal powers over any and all "direct and indirect" transfers to the trust. The taxpayer (decedent in this case) paid the insurance premiums directly to the carrier (never actually transferring te money to the trust) and the Trustee did not make all the Crummey withdrawal power holders (heirs) aware of their powers of withdrawal
The Court held that the transfers did qualify for the gift tax annual exclusion (a gift of a present interest), even though some of the power holders weren't even aware of their withdrawal right! Very interesting! For decades, attorneys have been cautioning their clients to make sure those notices go out, otherwise risk losing the availability of the annual exclusion, and thus triggering a taxable gift on the insurance premium payments.
Conclusion: Taxpayers are still well-advised not to rely solely on this ruling, and to continue to issue Crummey notices to all power holders, to ensure the transfer (directly or indirectly) will qualify for the gift tax annual exclusion.
1. Estate tax inclusion of lifetime transfers of interests in family limited partnerships; and,
2. Proper drafting and administration of Crummey withdrawal rights in order to qualify indirect transfers to an irrevocable trust as nontaxable gift of a present interest (shelter gifts under the tax-free annual exclusion amount).
Estate Tax Inclusion of Gifts FLP Interests.
In Turner, the Court held that certain lifetime transfers by the decedent of limited partnership interests to children were subject to estate tax inclusion in the decedent's estate under a subsection of IRC Section 2036 (transfer with retained enjoyment).
Certain uncommon and "bad facts" existed that led the Court to this conclusion, demonstrating the importance of proper drafting and administration of family limited partnerships:
The decedent and his wife were the sole general partners, managing and controlling the partnership. (This is VERY uncommon in the world of properly executed partnership arrangements);
Decedent received an excessive management fee where few if any management services were actually provided;
The partnership operated like an investment account from which withdrawals may be made at will;
The partnership agreement provision that gave decedent and his wife as general partner the right to amend the agreement without consent of the limited partners. (This is VERY uncommon in the world of proper family limited partnership planning, and an important factor in the Court's decision);
Decedent transferred a significant portion of the decedent’s overall wealth to the partnership;
Decedent took distributions from the partnership “at will” ;
Decedent to disproportionate distributions (no distributions were made to any other partners in a year when $86,815 of payments were being made for the decedent and his wife, including the monthly management fees and $46,170 for estimated income taxes);
The decedent used partnership assets for personal expenses and personal uses (such as for making gifts, paying life insurance premiums on policies not owned by the partnership), and paying legal fees for the decedent’s estate planning; and,
The decedent personally paid debts and buying assets for the partnership, and failed to contemporaneously document those transactions as advances to the partnership.
Conclusion: By avoiding these uncommon "bad facts" and taxpayer pitfalls, one can properly execute and administer a family limited partnership arrangement that should not result in estate tax inclusion for lifetime gifts of limited partnership units.
2. Crummey Withdrawal Powers
An insurance trust was properly drafted to allow for Crummey withdrawal powers over any and all "direct and indirect" transfers to the trust. The taxpayer (decedent in this case) paid the insurance premiums directly to the carrier (never actually transferring te money to the trust) and the Trustee did not make all the Crummey withdrawal power holders (heirs) aware of their powers of withdrawal
The Court held that the transfers did qualify for the gift tax annual exclusion (a gift of a present interest), even though some of the power holders weren't even aware of their withdrawal right! Very interesting! For decades, attorneys have been cautioning their clients to make sure those notices go out, otherwise risk losing the availability of the annual exclusion, and thus triggering a taxable gift on the insurance premium payments.
Conclusion: Taxpayers are still well-advised not to rely solely on this ruling, and to continue to issue Crummey notices to all power holders, to ensure the transfer (directly or indirectly) will qualify for the gift tax annual exclusion.
Monday, May 16, 2011
Tales from the Michigan Nonprofit Superconference
I attended the Michigan Nonprofit Superconference in Lansing last weekend. It was very well attended and a valuable two-day event. In between the workshops were insightful speeches and inspiring performances.
Some of my favorite "take-aways" are as follows - words to live by for nonprofit organizations:
Donor Appreciation: Donors appreciate being contacted throughout the year for reasons other than "asks". Sending a hand-written note, a birthday card, or an invitation to a free event were just some of the many ideas.
Board Member Input: Exit interviews are important when a Board member resigns or retires. Board and nonprofit leadership often make the mistake of appearing to want input from the Board members, when in reality the decisions on issues presented to the Board membership have already been made "behind the scenes". Board members' most common complaint about participating is that their opinions and input appear to really have little value, and therefore their time is wasted by participating.
Generational Gaps: Much was discussed about working with millenials. This generation of twenty-somethings is all about change, new experiences, keeping it real, and collaboration. The work ethic and style of millenials often clashes with senior management who are more likely to want to make all the decisions with less collaboration and more structure.
Advocacy: Advocacy is the fastest way to accomplish your organizational goals. Changing governmental processes can unlock funding streams and create efficiencies.
Leveraging Volunteers: Creative use of volunteers can have a dramatic impact on your service potential. Running government funded programs with volunteers can allow your organizational dollars to be reinvested elsewhere for more impact.
Keeping it Fun!: Volunteers are looking for a rewarding experience that is also fun! Especially the millenials! Keeping things fun and stress-free will increase volunteer satisfaction and help spread the word about your organization.
Word of Mouth: One speaker cited a study that one volunteer telling two people a great story about your organization is worth a $500 advertisement. Getting volunteers engaged and keeping them happy is valuable!
Vision...Engage...Adjust...Attack: Governor Snyder laid out this four step approach to individual engagement in the community - be it a small business entrepreneur or a nonprofit founder. The message is that we should stop planning and start doing! The days of planning and procrastination are hopefully giving way to more spontaneous productivity! It's OK to jump in feet first, and make adjustments along the way. My only "caveat" to this call to action as it relates to nonprofit founders is to do a bit of homework on your "competition" as the first step in Engage. Before setting up your own nonprofit - ask yourself is there another nonprofit organization already operating in this space that may be interested in partnering with you to add a program or service, before you start out on your own?
Board vs. Staff Roles: There is a lot of confusion among nonprofits regarding who is to do what. The Board has the primary responsibility to Control (overseeing officers), and Foster (strategic planning). Day-to-day duties should be left to staff. Your organization should delve into your Bylaws to understand the roles, and work with your attorney if the roles are not well-defined in your Bylaws to avoid confusion.
Change - Baby Steps: Small, seemingly disconnected steps at an individual level can add-up to real change for a community. "If you want change, you have to be the change" chanted Kresge Fellow Invincible.
I hope these pearls of wisdom from the conference can serve as a health "check-up" for your nonprofit organization.
Some of my favorite "take-aways" are as follows - words to live by for nonprofit organizations:
Donor Appreciation: Donors appreciate being contacted throughout the year for reasons other than "asks". Sending a hand-written note, a birthday card, or an invitation to a free event were just some of the many ideas.
Board Member Input: Exit interviews are important when a Board member resigns or retires. Board and nonprofit leadership often make the mistake of appearing to want input from the Board members, when in reality the decisions on issues presented to the Board membership have already been made "behind the scenes". Board members' most common complaint about participating is that their opinions and input appear to really have little value, and therefore their time is wasted by participating.
Generational Gaps: Much was discussed about working with millenials. This generation of twenty-somethings is all about change, new experiences, keeping it real, and collaboration. The work ethic and style of millenials often clashes with senior management who are more likely to want to make all the decisions with less collaboration and more structure.
Advocacy: Advocacy is the fastest way to accomplish your organizational goals. Changing governmental processes can unlock funding streams and create efficiencies.
Leveraging Volunteers: Creative use of volunteers can have a dramatic impact on your service potential. Running government funded programs with volunteers can allow your organizational dollars to be reinvested elsewhere for more impact.
Keeping it Fun!: Volunteers are looking for a rewarding experience that is also fun! Especially the millenials! Keeping things fun and stress-free will increase volunteer satisfaction and help spread the word about your organization.
Word of Mouth: One speaker cited a study that one volunteer telling two people a great story about your organization is worth a $500 advertisement. Getting volunteers engaged and keeping them happy is valuable!
Vision...Engage...Adjust...Attack: Governor Snyder laid out this four step approach to individual engagement in the community - be it a small business entrepreneur or a nonprofit founder. The message is that we should stop planning and start doing! The days of planning and procrastination are hopefully giving way to more spontaneous productivity! It's OK to jump in feet first, and make adjustments along the way. My only "caveat" to this call to action as it relates to nonprofit founders is to do a bit of homework on your "competition" as the first step in Engage. Before setting up your own nonprofit - ask yourself is there another nonprofit organization already operating in this space that may be interested in partnering with you to add a program or service, before you start out on your own?
Board vs. Staff Roles: There is a lot of confusion among nonprofits regarding who is to do what. The Board has the primary responsibility to Control (overseeing officers), and Foster (strategic planning). Day-to-day duties should be left to staff. Your organization should delve into your Bylaws to understand the roles, and work with your attorney if the roles are not well-defined in your Bylaws to avoid confusion.
Change - Baby Steps: Small, seemingly disconnected steps at an individual level can add-up to real change for a community. "If you want change, you have to be the change" chanted Kresge Fellow Invincible.
I hope these pearls of wisdom from the conference can serve as a health "check-up" for your nonprofit organization.
Tuesday, May 3, 2011
New Filing Threshold for Michigan Nonprofits
On March 31, 2011, a change in Michigan law became effective. Now, generally speaking, nonprofits with contributions under $25,000 in a twelve month period are not required to register with the Michigan Attorney General. Nevertheless, nonprofits that fall under the $25,000 limit should specifically request an exemption from the registration requirements by filing this form.
http://www.michigan.gov/documents/ag/Fillable_Exemption_Form_2-9-09_Final_266603_7.pdf
Note, the actual language is a bit more cumbersome than what is stated above. Specifically, the exemption from registration is available to "an organization that does not intend to solicit and receive, and does not actually receive, contributions in excess of $25,000.00 during any 12-month period". And, this exemption only is available to all volunteer organizations.
Nonprofits that expect to receive contributions in excess of $25,000 in a twelve month period don't qualify for this exemption.
And, it is notable that grants from governmental agencies or restricted grants from foundations are not "contributions" for purposes of the threshold test.
There are all sorts of other bases for exemption from registration as the laundry-list on the attached form indicates. It's always wise to check with your attorney to properly determine your filing requirements.
http://www.michigan.gov/documents/ag/Fillable_Exemption_Form_2-9-09_Final_266603_7.pdf
Note, the actual language is a bit more cumbersome than what is stated above. Specifically, the exemption from registration is available to "an organization that does not intend to solicit and receive, and does not actually receive, contributions in excess of $25,000.00 during any 12-month period". And, this exemption only is available to all volunteer organizations.
Nonprofits that expect to receive contributions in excess of $25,000 in a twelve month period don't qualify for this exemption.
And, it is notable that grants from governmental agencies or restricted grants from foundations are not "contributions" for purposes of the threshold test.
There are all sorts of other bases for exemption from registration as the laundry-list on the attached form indicates. It's always wise to check with your attorney to properly determine your filing requirements.
Monday, March 14, 2011
L3Cs and the Arts
I recently opened an art gallery ART EFFECT in the heart of Detroit. Being an attorney who is fascinated with the application of this new vehicle, I decided to give it a whirl and open the gallery as an L3C. Frankly, hardly anyone else knows that the gallery is operating as an L3C. Most people would look at me funny if I tried to explain it. However, it did seem to click with the artist I hired to run the gallery. It helped me make sure that he and I were in alignment on goals. And, being an L3C helped me convey just what it is I'm trying to accomplish to him. I want to help the community, help emerging artists, but also make enough money to keep the doors open.
I could've formed as a nonprofit, but in the art world, being a nonprofit you can't really serve as an advocate for any particular artist so well. You are there to serve the art community as a whole, and not pick favorites. But, this isn't what I wanted. I wanted to find and support highly trained, highly talented, hard working artists who cared about showing their work in Detroit. I could've just formed as a for profit LLC, but that somehow didn't quite feel like it aligned entirely with my mission. Yes, I absolutely want to make money, but in the end, I will likely plow any profits back into the Detroit community in one way or another whether it's through economic development or arts funding. The L3C just felt right for me at the time, and it still does.
In the back of my mind, I thought - you know maybe I can get foundation funding or government funding for this venture, as I'd like to further develop the building we are located in, into more usable space for studios and exhibitions. I frankly just don't know if that will ever happen. Most of the foundations that "get it" about program related investments and social entrepreneurism are way out of our league. They only fund large, established organizations. Everyone else still requires 501(c)3 status. And I just can't see the city of Detroit being avant garde in the area of arts funding and hybrid entities. But, I remain hopeful!
And, there are some questions in my mind that remain about what happens if I have to unwind this entity - the legal and practical aspects of it all. But, beyond that it is very easy to form and run and overall I'm happy with it. I feel like I'm writing a consumer report.
I am happy to serve as a guinea pig to real world a concept that might very well be a fit for nonprofit and for-profit clients of mine. So far so good.
I could've formed as a nonprofit, but in the art world, being a nonprofit you can't really serve as an advocate for any particular artist so well. You are there to serve the art community as a whole, and not pick favorites. But, this isn't what I wanted. I wanted to find and support highly trained, highly talented, hard working artists who cared about showing their work in Detroit. I could've just formed as a for profit LLC, but that somehow didn't quite feel like it aligned entirely with my mission. Yes, I absolutely want to make money, but in the end, I will likely plow any profits back into the Detroit community in one way or another whether it's through economic development or arts funding. The L3C just felt right for me at the time, and it still does.
In the back of my mind, I thought - you know maybe I can get foundation funding or government funding for this venture, as I'd like to further develop the building we are located in, into more usable space for studios and exhibitions. I frankly just don't know if that will ever happen. Most of the foundations that "get it" about program related investments and social entrepreneurism are way out of our league. They only fund large, established organizations. Everyone else still requires 501(c)3 status. And I just can't see the city of Detroit being avant garde in the area of arts funding and hybrid entities. But, I remain hopeful!
And, there are some questions in my mind that remain about what happens if I have to unwind this entity - the legal and practical aspects of it all. But, beyond that it is very easy to form and run and overall I'm happy with it. I feel like I'm writing a consumer report.
I am happy to serve as a guinea pig to real world a concept that might very well be a fit for nonprofit and for-profit clients of mine. So far so good.
Thursday, February 17, 2011
Presidential Budget - Charitable Contributions
President Obama submitted his Fiscal Year 2012 budget to Congress, and it once again includes a limit on the value of itemized deductions, including the charitable deduction, for certain taxpayers. The proposal is virtually identical to language included in last year's budget plan and calls for a 28 percent cap on itemized deductions for individuals earning more than $200,000 a year and couples earning more than $250,000 a year.
The proposed limitation would be effective for taxable years beginning after December 31, 2011.
Here is a link to a good analysis of how this proposal could impact charitable giving in the US.
http://philanthropy.com/article/Obamas-Plan-to-Reduce/63024/
The proposed limitation would be effective for taxable years beginning after December 31, 2011.
Here is a link to a good analysis of how this proposal could impact charitable giving in the US.
http://philanthropy.com/article/Obamas-Plan-to-Reduce/63024/
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