Hi all,
I've just started working for the Chicago Symphony and I'm looking for suggestions on dealing with patrons who pay their individual gifts through family foundations, but for all intents and purposes are recognized as individuals. (i.e. The personal check that comes with the "The XXX Family Foundation" and the address is either their home or business address.)
This stands in contrast to those patrons who want to receive "credit" for having suggested a gift from their donor-advised fund or a foundation for which they are a board member or trustee.
I've walked into a situation where there isn't a clear policy and I'd love to provide our gifts and records department with sound advice and some consistancy that is both logical and legal.
In addition, not having my own funds to start a family foundation, I'm not up-to-date on the fundamental differences between the types of foundations people can create. In past jobs, I've always been responsible for knowing how Tessitura works, but now, in my new job, I'm also responsible for knowing a little more about what the the legalalities require.
I'd love to just say that in all cases the money goes into the account where the money came from and soft credit the individual, but in an organization as large as this, I fear that could lead to soft credit hell, especially with these gifts that fall into this strange gray area.
Now that I've written a novel, this is what I'm looking for:
1) Are there any other large/medium sized organizations that have had this issue and have found a great way to categorize and deal with these accounts?
2) Do you receive any irritation from donors when they discover you have given their private foundation or fund its own account?
3) Is there really a shade of gray? I'd love to be directed to reading materials from the IRS or other sources on foundations, etc. that could help me with this.
Thanks for your help! I'd love to hear what you have to say.
Best wishes,Ryan Sedgwick
Hi Ryan,
At OCPAC we historically booked these gifts directly to the individuals record. In the last year, however, we've been changing that. Now, we book to the family foundation and credit to the individual. There are some cases where this normally wouldn't be an issue (for instance, donors who only gift via their foundations), but in the cases where an individual gifts their own money as well as money from their foundation, this has helped immensely with financial tracking.
As far as the donor's response is concerned, many of our donors require separate tax letters addressed specifically to the foundation, and/or request financial contribution statements at the end of the year for the foundation specifically. These donors typically support the two record model. For the donors who are unaware of this process, they either don't care when they find out, or are content once we explain our processes. I have yet to encounter someone who reacted negatively.
I hope this helps answer your question. I don't know of the specific IRS document, but last summer we spoke to our auditors regarding this issue and they highly recommended having one record for the family foundation and one record for the individual.
Feel free to contact me directly if you have additional questions.
Amber AlbertOrange County Performing Arts Center