A Guide to


youR Commu n i t y. you R F ou n d at i on . Since 1922, thousands of people like you have chosen to give to causes they care about through Grand Rapids Community Foundation. The benefits of giving at the Community Foundation include:
LoCaL ContRoL FLexibiLity PeRmanenCe ChaRitabLe imPaCt eConomy oF SCaLe PubLiC aCCountabiLity tax advantaGeS

Prompt, personal service. The Community

You have many gift-giving options. How

Foundation strives to make your philanthropy uncomplicated and easy to understand. Meetings are held at your convenience, where you are most comfortable and as often as you need to talk.
Your gift will be used wisely. Because we pool

and what you give depends on your specific financial situation and what you want to accomplish with your donation. Our development staff is always happy to sit down with you and your professional advisor to discuss the best giving option for you.
Your gift will benefit the community forever.

contributions, investment and administrative costs are kept low. Because Grand Rapids Community Foundation is a public charity, all donations qualify for the maximum available deduction for tax charitable contributions.
Your gift will address current and emerging needs. The professional grantmaking staff at

With the power of endowment, a gift made now will benefit the community for decades to come. The use of gifts can be narrow or more broad, depending on your desires.
Your gift is secure. Grand Rapids Community

the Community Foundation understands how local and regional issues affect the community as a whole. Our broad perspective ensures that the grants we distribute are targeted where they will do the most good. Grants that the Foundation awards are approved by a committee of community volunteers and the Board of Trustees.

Foundation manages its investments for total return. Each year we publish an independent audit of our financial position, a statement of activities, and lists of gifts and grants made in an annual report.
Although community needs and organizations will change, funds that are endowed at Grand Rapids Community Foundation will be held in your name forever.

Table of Contents

Yo u r d r ea m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Fund for Community Good . . . . . . . . . . . . . . . . . . . . . . . . . 4 Field of Interest fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Scholarship fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Nonprofit fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Donor Advised fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Yo u r G if t s

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Stocks, bonds, mutual funds . . . . . . . . . . . . . . . . . . . . . . . . 12 Closely held stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Real estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Life insurance, retirement accounts . . . . . . . . . . . . . . . . . . 15 Writing an ethical will . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Yo u r L eg a c y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Bequests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Charitable gift annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Charitable lead trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Charitable remainder annuity trust . . . . . . . . . . . . . . . . . . 23 Charitable remainder unitrust . . . . . . . . . . . . . . . . . . . . . . 24 Remainder interest in property. . . . . . . . . . . . . . . . . . . . . . 26

Yo u r Fou n d a t io n . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Cover photos all left to right: top: Gregg and Kim hughes, Ken and Joani Gill, tim and ann Cusack. Center: dareather Greer, drs. Courtney and ora Jones, harvey Lemmen. bottom: mickie and tom Fox, barbara demoor, Steele and mary taylor.


You r dreams
Whether you have a firm idea of what you hope to accomplish with your philanthropy—or an idea that’s just taking shape—Grand Rapids Community Foundation can help you achieve your philanthropic goals.

Your philanthropic giving options at Grand Rapids Community Foundation are tailored to you. For some donors an unrestricted gift to the Fund for Community Good meets their needs. Donor Advised funds give donors more control over where grants are made and provide an excellent option to a private foundation. Other alternatives include scholarship, Field of Interest and nonprofit funds. All gifts are endowed and the community will benefit from your gift forever. less control unrestricted field of interest advised more control scholarship designated

If you are willing to share the story of your gift, our staff will meet with you to talk about your family or personal history, your values and your philanthropic goals. Your name and your story will become a part of our permanent archives, and will be preserved and retold for generations to come.
Whatever your wishes, your hopes or your dreams for the future of your community, a fund at Grand Rapids Community Foundation can make them a reality.

With lifetime gifts and bequests totaling $50,000 or more, you may establish a separate, grantmaking fund. You may set up the fund in your name or the name of a loved one; the fund may also remain anonymous.


What are your dreams?
Personal giving and philanthropy, like most things in life, are more satisfying when they are aligned with your beliefs and values. here are some questions and ideas to consider as you think about your giving. 1 Define your personal beliefs and values. Which social issues move you the most when reading the paper or talking with other people? What values define you and which values have you shared with family and friends? To which organizations do you currently give? Do these gifts align with your values? What gifts have you made in the past that mean the most to you? Why? 2 Create your plan. If you could change three things in your community, what would they be? Do you prefer to fund buildings, operations and projects? Do you like to give to grassroots causes or more structured organizations? Do you like to give locally, nationally or internationally? How much involvement do you want with the causes you support? 3 Determine your giving level. What is your financial situation and what is your current or future desired giving range? What is your tax situation? What is your own charitable giving comfort level? 4 Implement your strategy. If needed, seek information about philanthropic opportunities from the Community Foundation. Determine best giving instruments to accomplish philanthropic goals. With Community Foundation assistance evaluate community needs, programs that meet those needs and opportunities for giving. Recommend grants from your Community Foundation fund or make outright gifts. Evaluate results: did your gifts accomplish what you hoped?


Fund FoR Community Good
• Create a lasting gift in your name or in the name of a loved one. • help meet the future needs of a changing community. • Receive an immediate tax deduction. • add to your fund at any time.

The Fund for Community Good is an unrestricted fund that allows Grand Rapids Community Foundation to help the community address unexpected and changing needs. Community Good funds become part of Grand Rapids Community Foundation’s general fund, targeting six broad grant areas: • arts and culture • community development • education • environment • health • human services. A Community Good Fund will bear your name forever. This option is a good choice if you value the flexibility the Community Foundation offers to help future generations deal with social, economic and environmental challenges.

Funds for Community Good allow the Community Foundation to seek long-term solutions to problems such as hunger, homelessness, child welfare and public education. They also support building projects that benefit the entire community, such as museums, performing arts centers and botanical gardens. Contributions are acknowledged in a variety of ways, including publishing the names of contributors in our annual report, ensuring that your name—or the name of a loved one—will always be remembered and linked with philanthropy. Establishing a Fund for Community Good can be the first important step to creating your own legacy of caring.

Allan and Claudia Carlson still remember what it was like to live within a budget. they went on picnics and to the lake with their children; they borrowed books from the library. they also remember the lean times as very good times and believe that they live almost as simply as they did 25 years ago. “When you don’t have a lot, you don’t seem to need as much,” said Claudia Carlson. “but, there’s no point in just accumulating wealth,” said her husband, allan.

true to their words, their gift of $1 million to the Fund for Community Good was received at Grand Rapids Community Foundation in december 2005. in 1998, the Carlsons established a donor advised fund at the Community Foundation. their 2005 gift was their second major donation to the Community Foundation. “the Community Foundation has proved itself responsible with our funds in the past and we trust them to do what’s best with this gift,” allan said.

the Carlsons own ePS (engineered Protection Systems), a home and commercial security company.


Herb and Dori Vander Mey were long-time supporters of Grand Rapids Community Foundation. herb served on the board of trustees of the Community Foundation in the 1980s, and he and dori made annual gifts each year to the Fund for Community Good. after herb’s passing in 2004, dori continued her support. a battle with multiple sclerosis and remission gave dori the impetus to start a Field of

interest fund that would bear the vander meys’ name long into the future. the Field of interest fund was designed to be flexible, yet specific to a cause she and herb cared greatly about. Grants from the herbert and doris vander mey Fund for the treatment of neurological diseases will provide grants to organizations that will help people with neurological diseases and medical research in the field.

“as someone who experienced serious illness and disability and also experienced the miracle of total remission, i am compassionate toward people with illnesses like mine. i especially care about children with disabilities. my ability to give is a gift from God, and we must give as the Lord blesses us,” dori said.

FieL d oF i n t e R e St F u n d
• Create a lasting gift in one or more special interest areas. • Receive an immediate tax deduction. • add to your fund at any time. • Create a gift that supports your special interest and is flexible for the future.

Charles “Bob” Evenson, a lifelong outdoorsman, was passionate about preserving Michigan’s lands and waters. Lucy Barnett felt great compassion for elderly people in need. Mary and David Hunting cared deeply for children and believed that positive camping experiences had the power to transform young lives. Because of the heartfelt dreams and generous bequests of Mr. Evenson, Miss Barnett and the Huntings, Grand Rapids Community Foundation today holds Field of Interest funds in each of their names. It is impossible to anticipate the needs that the environment, older adults or summer camps will face in future years. But because of the commitment of caring people, those causes will have a secure source of funding through Grand Rapids Community Foundation’s endowment. Your Field of Interest fund will award grants to projects or programs within your specified area and carry your name or the name of a loved one in perpetuity. When we approve a grant to an organization in that specific Field of Interest, we make the gift in your name.

You r dreams

SChoL aRS h i P F u n d
• Create a lasting gift in your name or in the name of a loved one. • help students from Kent County receive a college education or other advanced training. • improve lives through continued education. • Participate in the scholarship selection process, if you wish. • Receive an immediate tax deduction. • add to your fund anytime.

Higher education has long been seen as one of the surest paths to increased opportunity. Unfortunately, many people who could benefit the most from a college education are least able to afford it. Scholarship funds help them on their path to higher education. Grand Rapids Community Foundation holds funds for aspiring artists, engineers, musicians, pilots, teachers and others. Applications are available online, and awards are decided based on a competitive process, which may consider academic achievement, extracurricular activities, a statement of the applicant’s personal aspirations and goals and financial need. Advisory committees, comprised of responsible and knowledgeable community members, help screen and select candidates. They make recommendations to the Community Foundation’s Board of

Trustees. You or a member of your family may participate in the scholarship selection process if you wish. Like other Grand Rapids Community Foundation funds, scholarship funds are endowed and may be named to honor loved ones. Community Foundation staff handles all details of awarding scholarships—from announcing their availability to processing applications to writing the checks.

Dareather Greer was the first person in her family to earn a college degree. After graduating from high school, she went on to Western Michigan University and received her bachelor’s degree. From there it was a master’s in curriculum and teaching from Michigan State University. Her first, last and only job was with the Kent Intermediate School District (KISD). “I taught high school students business subjects, which included everything from how to operate a mimeograph, key punch machine, or an IBM Selectric typewriter to a word processor,” she said with a laugh. From 1972 until she

retired in June 2005, she dedicated herself to teaching young people the fundamentals of business. “Business makes the world work and all of it intrigues me,” Dareather said. “I had a teacher who inspired me, a typing teacher, actually. He taught me to type on a manual typewriter without letters on the keys! He gave me the love of business education,” she said. As part of her retirement and subsequent estate planning, she created a scholarship in her name at Grand Rapids Community Foundation for African American females. “In high school, I knew I wouldn’t

be able to attend college because my parents didn’t have the money. I found out about grants and student loans that helped pay for college, and I decided to pursue my dreams (of becoming a teacher) and actually fulfilled that dream. I want others to be able to fulfill their dreams also,” she said. Her agreement with the Community Foundation, specifies that the scholarship the applicants must show they have been active in multiple community service projects and have a letter of endorsement showing volunteerism.

nonPRoF it F u n d
• Create a lasting gift in your name. • help meet the present and future needs of a designated charity. • add to your fund anytime.

During the Great Depression, the Clinic for Infant Feeding helped make sure babies didn’t succumb to malnutrition or starvation during hard times. The clinic’s mission touched the heart of Mrs. John Wood Blodgett, one of Grand Rapids Community Foundation’s original trustees. In her will, Minnie Blodgett left a bequest to Grand Rapids Community Foundation and designated it for the Clinic for Infant Feeding. Today, the Clinic for Infant Feeding no longer exists. But because Mrs. Blodgett entrusted her bequest to the Community Foundation, her legacy and intention endures. Her fund, Estate of Minnie C. Blodgett for Clinic for Infant Feeding, continues to make grants to improve the care and treatment of children.

If you want your gift to support specific charitable organizations, you can establish a nonprofit fund. Your gift becomes a permanent fund of the Community Foundation, which will support the organization as long as it exists. If it ever closes its doors, the Community Foundation will use the fund to support programs with similar goals.
It is important to remember when designating your fund that it will last forever. The less restrictive it is, the more it will help meet the unexpected and changing needs of upcoming generations.


You r dreams

donoR ad vi Se d F u n d
• Create a lasting gift in your name or in the name of a loved one. • establish a fund, which is like having a private foundation—without the administrative work and expense. • Participate in the grantmaking process. • access the expertise of the Community Foundation’s professional staff. • add to your fund at any time. • Receive an immediate tax deduction.

A Donor Advised fund (DAF) at Grand Rapids Community Foundation is simple to establish and operate. The Community Foundation is responsible for making sure that all legal requirements are met. Each year, donors make grants from the “spendable” amount of the fund. This is five percent of the fair market value of the fund over the last four years. Donor Advised funds allow you to manage your charitable giving without the work and expense of running a private foundation. With a Donor Advised fund, you can refer requests to us, give anonymously or suggest we make payments to any charity that meets IRS guidelines. We then take care of all administrative details. Under Internal Revenue Service rules, the Community Foundation’s Board of Trustees must approve all grants. Our grant allocation procedure protects you by making sure your grantees meet the legal standards for charitable intent.

Donor Advised funds also offer the option of allowing your children or grandchildren to participate as advisors during your life or to become advisors after your death. More people are choosing this option to include the next generation in family philanthropy, passing along the joy and values of charitable giving. After the death of the last advisor, Donor Advised funds retain their establishing name and preserve the legacy and intent of the contributor. The Community Foundation offers two types of Donor Advised funds. The Dynamic fund is established with a gift of $250,000 or more; $50,000 is endowed with the remaining balance available for immediate grantmaking. The Legacy fund is established with a minimum gift of $50,000 and grants are made from a portion of the fund’s earned income. Community Foundation staff can help you review the options to determine which better meet your needs.

Tom and Mickie Fox are known by many people in the Grand Rapids business community. Tom Fox’s days as owner of Fox Jewelers made him a legend in retailing. Strong supporters of the West Michigan area, Tom and his wife Mickie, have donated countless hours to local organizations. Their decision to establish a Donor Advised fund at the Community Foundation with appreciated stock ensured that their

commitment to this community will last for generations to come. “We’ve always been extremely proud of being part of the Grand Rapids community, and we’re now at the point in our lives where we can give back to this community in a significant way,” Tom said. As the Foxes discovered, a Donor Advised fund at Grand Rapids Community Foundation is simpler and less expensive

than establishing and managing a private foundation. Donors recommend how the spendable portion of their fund will be awarded, and each time a grant is awarded from their fund, the grantee receives a letter indicating which donors made the gift. The Foxes know their fund will increase in value over time and continue to support the causes they care about.


Yo ur dreams
Fund for Community Good or Unrestricted Funds
Meet the future needs of a changing community by providing maximum flexibility for future grantmaking.

Field of Interest Fund
Ensure permanent support for a special area of interest while allowing flexibility for the future.

Scholarship Fund
Improve the lives of students with a permanent source for higher education funding.

Nonprofit Fund
Help provide a permanent source of income to meet the future needs of a designated charity.

Donor Advised Fund
Recommend annual grants for the causes you care about most. If desired, design a family grantmaking plan that includes the next generation.

You may establish any of the above funds to honor the memory of a loved one.


You r Gifts
Gifts to Grand Rapids Community Foundation come in all shapes and sizes. Cash, securities, closely-held stock, business real estate and private homes are all assets that have been used to establish charitable funds. Whatever the asset, each and every gift is an important contribution to the work of the Community Foundation.
We encourage you to make an appointment with our development staff to talk about your objectives and your situation. they may be able to offer suggestions you have not considered or known about.

Type of Contribution

Amount that can be deducted Cash value Cost basis

Percentage of Adjusted Gross Income that can be deducted in one year 50% 50%

Cash ordinary income property, such as inventory, depreciable property, agricultural products, oil and gas property, Section 306 stock, original issue discount debt instruments, art work by its creator and other property, the sale of which at fair market value would yield ordinary income Short-term capital gain property (held less than 12 months) such as stocks, bonds and other capital assets, the sale of which at fair market value would yield short-term capital gain Long-term capital gain property (held more than 12 months) such as stocks, bonds and other capital assets, the sale of which at fair market value would yield long-term capital gain Long-term appreciated real property

Note: Contributions in excess of the percentage limitation may be carried over for charitable deduction purposes in the five succeeding taxable years. Please review your giving options and related tax benefits with your professional financial advisor.

Cost basis


Fair market value


Fair market value

30% 30%

tangible personal property, if the recipient’s Cost basis use of the property is related to its exempt purpose or function. unrelated use limits deduction to cost basis but the 50% ceiling applies.

Grand Rapids Community Foundation grants have helped restore sections of the Rogue River, making the habitat for fish more productive.

• enjoy ease of giving. • Give as much or as little as you choose. • take advantage of the michigan tax Credit for Community Foundations.

A cash gift is the most popular type of charitable gift because of its simplicity. With a gift that meets our fund minimum, you can establish a fund of your choice that will begin generating income for grants or scholarships immediately.


You r Gifts

StoCK S, b on d S, mu t uaL F u n d S
• Receive a charitable deduction for the fair market value, not the original investment. • Avoid capital gains tax. • no minimum is required. • Multiple gifts can be combined to establish a fund. • Realize substantial tax savings. • Reduce the size of your estate.

Giving gifts of appreciated property in the form of stocks, bonds or mutual funds may provide greater tax benefits than a cash gift of equivalent value, especially if it has a low cost basis. You will receive a charitable deduction for the full market value of your property— even if you initially bought it for far less. You will also avoid capital gains tax—money you’d have to pay if you liquidated the property.

To illustrate the benefits, consider the scenario below. It shows how, by giving appreciated stock, you can make a significant charitable gift for cents on the dollar. You may deduct the full fair market value of gifts of long-term capital gain property up to 30% of your adjusted gross income. Any amount in excess of the 30% ceiling can be carried forward for five years.

A Gift of Appreciated Stock
continue to generate revenue that can be reinvested in our community,” Dr. Appelt said. Dr. Appelt chose to direct her gift to the Fund for Community Good. “I am confident that the Community Foundation will distribute the income from my gift to help address this community’s most pressing needs,” she said.

Dr. Mary Appelt faces the human drama of life and death every day in an operating room. A practicing anesthesiologist, Dr. Appelt has seen firsthand the benefits of philanthropy on all levels of society. “Whether we give to provide an underprivileged student a college education or to create a state-of-the-art neonatal center, it’s very important to give back to the community that has supported and rewarded us,” she said.

Like many investors, Dr. Appelt was faced with paying capital gains and income taxes on some highly appreciated stocks she wanted to sell. She believed that giving her appreciated stocks to the Community Foundation offered a more significant social benefit, while helping her achieve her charitable and financial goals. “It pleases me to know that the gift I made to Grand Rapids Community Foundation will

CLoSeLy h e Ld St oC K
• take a charitable deduction for the appraised market value, not the cost basis (original investment). • avoid capital gains tax. • buy back or redeem the stock. • Reduce the size of your estate.

If you own closely held stock in your business, you may choose to contribute it to Grand Rapids Community Foundation. (Closely held stock is generally not sold to the general public.) Giving it to a charitable organization may offer you and your company a number of advantages. First, you’ll receive a charitable deduction for the appraised fair market value. You’ll also avoid tax on the capital gain. And, at a later date, the company may redeem the stock, or the company Employee Stock Ownership Plan or another shareholder may buy the stock at its fair market value.

With either a gift of cash or securities, your charitable deduction would be the same—$10,000. in the 28% bracket, your net cost would be $7,200. but if you give securities that you purchased for $1,000, you could also save $1,350 in capital gains tax. the net cost of the gift: just $5,850.

How to Make a Gift for 59 Cents on the Dollar
Cash Current fair market value of gift $10,000 Cost basis $10,000 income tax savings $2,800 (assuming 28% income tax bracket) Capital gains tax you save by giving stock $0 (assuming 15% capital gains bracket) net cost of gift $7,200 Appreciated Property $10,000 $1,000 $2,800 $1,350 $5,850


You r Gifts

ReaL eStat e
• Charitable deductions are based on the appraised fair market value, not the original investment. • avoid capital gains tax. • Receive substantial tax savings. • Reduce the size of your estate.

Whether it be a home, cottage, business property or undeveloped land, Grand Rapids Community Foundation can help you turn this asset into an excellent charitable gift. We can accept the gift outright or show you how a charitable trust can be used to convert your asset into a gift that also produces an income. Because each gift of real estate is unique, a Community Foundation staff member would be happy to meet with you to discuss the logistics of making such a gift.

Marvin Stahl A legendary golf pro, Hollywood filmmaker and Grand Rapids business leader, Marvin Stahl was also a civicminded philanthropist. When he and his wife, Dottie, could no longer enjoy their beloved summer home on Baldwin Lake, they donated it to Grand Rapids Community

Foundation. The home was sold, with proceeds establishing the Marvin Stahl Fund. Since 1987, the fund substantially increased in value while awarding grants to a number of valuable community programs and services.


L iF e inSuR a n C e P oLi C i e S
• Claim a charitable deduction on the computed current value of your paid-up policy. • annual premiums are tax deductible. • Reduces the size of your estate.

G iving a life insurance policy is an
inexpensive way to make a substantial contribution to Grand Rapids Community Foundation. Many people find in later years that they don’t need all the insurance they did when they were younger. If you own “unneeded” policies, you may name the Community Foundation as sole beneficiary and transfer ownership. Once you do that, you are immediately eligible for a charitable tax deduction on the computed current value of your paid-up policy. If you are still making annual premium payments, those payments will also qualify for a charitable deduction.

(Those premiums are paid directly to the Community Foundation, which in turn pays the insurance company.) Since the insurance policy is owned by the Community Foundation from the day it is transferred, it is not part of your estate and not subject to tax. Simply name Grand Rapids Community Foundation to receive part or all of your life insurance proceeds when you die. You may need the Community Foundation’s tac ID number for your beneficiary designation. It is 382877959.

4 0 1 K and i R a aC C ou n t S
• maximize asset value. • minimize estate tax. • Receive a federal income tax deduction.

A ssets held in 401k and IRA accounts require
special consideration in your financial and estate planning. The law requires income tax to be paid on any withdrawals from the accounts, which may diminish its value for you and your heirs. If you leave retirement assets to family members in your estate plan, an estate tax may be levied as well. This double taxation could significantly decrease the value of the asset for your heirs.
John Gill and Rita Williams By donating a retirement asset to the Community Foundation during your lifetime, you can remove it from your estate, preserve “ The community is our responsibility and it more of its value and receive a federal should be our first priority. We all have a duty to the community.” deduction for the gift. — Rita Williams By leaving retirement assets to the Community Foundation in your will, you can avoid income and estate taxes—and preserve your hard-earned assets for the good of your community—forever.


You r Gifts

Yo ur Gifts
Cash is the simplest gift to give. You can combine multiple cash gifts to establish a fund at the Community Foundation.

Stocks, bonds, Mutual Funds
Receive a deduction for the full fair market value, and avoid paying tax on your capital gain.

Closely Held Stock
Receive a deduction for the appraised market value, avoid capital gains tax and buy back at new cost basis, if you choose.

Real estate
Receive a deduction for the appraised market value, and avoid paying tax on your capital gain.

401k and IRA Accounts
Maximize value by avoiding income and estate taxes, and receive a deduction.

life Insurance Policies
Receive a deduction for the computed current value of your paid-up policy or premium payments.


a WiL L oF W i Sd om: WRitinG you R e t h i C a L W i LL
Having any degree of wealth at the end of life is a sweet reward for hard work, saving and wise investments. Many people find peace of mind and satisfaction in creating estate plans that acknowledge loving relationships or that reward nonprofits doing great work. Beyond the legal documents, there is another document you can create that also rewards people after your death. An ethical will is a document you create for family members to share your values, beliefs, spirituality, favorite memories and hopes and dreams for the future. An ethical will helps you tell your descendents about yourself and leave them a gift more important than money. People who think they are not writers might be intimidated by creating an ethical will. However, it can be done over time and doesn’t have to be complicated. If you are not a computer user, you can handwrite a note or a series of notes. You can write in a journal or notebook or speak into a micro cassette and record your thoughts. Keep your ethical will with your other important papers and know that your family will be pleased to read it.

These questions will help you think about what you might tell people about yourself. Think through your responses and ask yourself why as you write.

What was your childhood like? What were you like in school? What were the best years of your life? What world event had the most impact on you? How did you decide on your profession or career? Do you think it was your calling? What was the most difficult decision you ever made? What is the bravest thing you’ve ever done? Did you love your spouse (or significant other) at first sight? When did you know it was love? What is key to a lasting marriage? What is key to a lasting friendship? Who is your best friend? What is your best advice for parents? What was the most rewarding aspect of being a parent? What do you believe in? Do you believe in God? What do you think heaven is like? What are you most proud of? What are your most closely regarded values? Is there anything in the world that is worth dying for? What would your descendents be surprised to know about you? How do you want to be remembered?

You r Gifts

You r Legacy
ChaRitabLe b e qu e St S
• divide assets between loved ones and your charitable interests in any manner you choose. • Reduce the size of your taxable estate.

Gifts provided through wills or trusts have become the foundation of the American philanthropic tradition. In fact, the vast majority of planned gifts ultimately received result from bequests. Such gifts enable you to make significant contributions that may not have been possible during your lifetime. When you remember the Community Foundation in your will, you may reduce your estate taxes while supporting your community. You may give a specific dollar amount, property or a percentage of your estate. You may also give a remainder of your estate after bequests to friends and family.

When planning a bequest to Grand Rapids Community Foundation, be sure to talk with a member of the development staff. Your staff representative will help make sure that your wishes are clearly understood in the present so they can be carefully carried out in the future.

The Metz Society
Named for George and Mary Metz, whose $100,000 gift was the first bequest received by Grand Rapids Community Foundation, the Metz Society recognizes people who have included the Community Foundation in their estate plan. Metz Society members are invited to special Community Foundation events that are exclusive to members and donors. If you have included the Community Foundation in your will or estate plans, please let us know. Even if you wish to remain anonymous, we want to be able to fully carry out your gift intentions. Knowing what you want is important to us.


Harvey lemmen was born in Ionia in 1922. While his family was of simple means, his parents were devoted members of the community. His father, a school board member, and his mother, a homemaker, stressed the importance of a good education. Harvey listened and learned and, in 1940, graduated valedictorian of his class. His success in high school helped him earn a scholarship to the University of Michigan. “I had never been away from home and I remember feeling a little homesick at the university,” said Harvey, who majored in accounting. By 1944, Harvey earned his degree. He briefly entered the working world and returned to his alma mater in 1945 to earn an MBA. He became office manager of Meijer in 1949. “It sounds impressive, but there were only about 12 employees. We worked in a small office in Greenville with old wooden floors. There were only a few Meijer groceries at that time,” Harvey said. He retired as chief operating officer after 38 years. “The thing that really matters to me is helping people. I believe that how much you help others is the one true measure of success,” he said.

“ I have included the Community Foundation in my will because it is a permanent part of our community. I know that my gift will benefit the people here long after I’m gone.”

A bequest can take various forms. You and your advisor may consider the following samples of several types of bequests when preparing your will. For restricted bequests, please contact a Grand Rapids Community Foundation development staff person to discuss the terms.

Contingent Bequest: In the event of an unexpected occurrence,
a contingent bequest will ensure that property will pass to Grand Rapids Community Foundation rather than unintended beneficiaries. For example, “If, at any time, there is no one to take under the other provision of this will, I give property and funds to Grand Rapids Community Foundation, Grand Rapids, Michigan, a Michigan nonprofit corporation, to be held, administered and used by its Board of Trustees for its grantmaking, programming and support of Grand Rapids Community Foundation in the areas of greatest need and opportunity.”

Specific Bequest: With a specific bequest, you designate
that Grand Rapids Community Foundation is to receive a specific dollar amount or specific property. “I give to Grand Rapids Community Foundation, Grand Rapids, Michigan, a Michigan nonprofit corporation, (dollar amount) to be held, administered and used by its Board of Trustees for its grantmaking, programming and support of Grand Rapids Community Foundation in the areas of greatest need and opportunity.”

Restricted Bequest: You may prefer to restrict your bequest
for a specific purpose. For example, if you wish to memorialize a family member or special friend or honor a colleague, you can establish a legacy fund that will provide support for a program in which you (or the person honored or memorialized) were particularly interested. A restricted bequest should be made in the broadest terms that are consistent with your purpose to guard against the possibility of your gift becoming impractical or obsolete. “I give to Grand Rapids Community Foundation, Grand Rapids, Michigan, a Michigan nonprofit corporation, (percent or dollar amount) to be held, administered and used by its Board of Trustees for its establishment of an endowed ___________ fund. Distributions from the fund are to be used by the Board of Trustees for ___________. The fund shall be named the ___________.”

Residuary Bequest: A residuary bequest is used to give Grand Rapids Community Foundation all (or a portion thereof) of your property, after all debts, taxes, expenses and all other bequests have been paid. “I give to Grand Rapids Community Foundation, Grand Rapids, Michigan, a Michigan nonprofit corporation, (all of, specific or percent of) the remainder of my estate, both real and personal, to be held, administered and used by its Board of Trustees for its grantmaking, programming and support of Grand Rapids Community Foundation in the areas of greatest need and opportunity.”

You r Legacy

ChaRitabLe Gi F t a n n u i t y
• Provide income for life for you or a beneficiary. • make an immediate, significant gift to the Community Foundation. • attain a more favorable current and retirement income tax position. • establish an annuity for as little as $10,000. • Lock in an attractive rate of return. • Save on probate and estate taxes. • Realize a charitable tax deduction and increase disposable income. • annuities are easy to establish and, generally, there is no cost involved.

Charitable gift annuities offer two key benefits, simplicity and a reliable income. When you establish a gift annuity with Grand Rapids Community Foundation, you or someone you designate will receive a life income in exchange for your charitable gift. The annuity rate depends on the annuitant’s age. The older you are, the higher the rate. Charitable gift annuities offer several tax advantages as well. Part of the gift qualifies for a federal income tax deduction. By transferring an appreciated asset to the Community Foundation, you will reduce and defer your capital gains tax and may reduce probate costs and estate taxes. (Check with your tax or financial advisor for detailed tax implications.) A deferred gift annuity allows you to receive payments later in life. This type of gift is attractive to younger donors who are planning for retirement. You will receive a higher rate and a lifetime income, based on when you want to start receiving payments (at least 12 months after establishing the fund). If you need current tax deductions and want to augment retirement income on a tax-sheltered basis, a deferred gift annuity is an excellent option.

Gift annuity Mrs. Chu, age 70, transfers long-term appreciated stocks with a current fair market value of $20,000 (original cost basis was $4,000) to Grand Rapids Community Foundation. Based on her age, her annuity rate is 6.5%, so she will receive $1,300 each year for the rest of her life. About $163 of that $1,300 will be income tax-free, plus she’ll be able to take a charitable deduction of about $7,384. In her 28% income tax bracket, this generates a net tax savings of $2,068, representing additional spendable income via taxes not paid. In addition, she was able to spread her capital gains tax over several years. Deferred gift annuity Dr. and Mrs. Lynch, both age 45, decide to make a combined cash contribution of $10,000 to Grand Rapids Community Foundation in exchange for a deferred gift annuity with quarterly payments to start when they are age 65. If they establish a charitable gift annuity immediately, their annual annuity rate would be 4.5% and their annual income would be $450. However, by deferring payments for 20 years, at a time when additional income will be welcome, the Lynches will receive an annual income of $1,420, representing a deferred gift annuity rate of 14.2%. Besides supporting their community through their gift to Grand Rapids Community Foundation, the Lynches have supplemented their retirement with a lifetime income. The year they established their deferred gift annuity, they were able to claim a $1,976 charitable gift deduction.

Please note: because CGa rates vary from year to year based on the market, the rates used
here are for illustrative purposes only. Please call the Community Foundation or visit our website, www.grfoundation.org for current rates.

Charitable Gift Annuities
Few people have a keener understanding of the needs of their community than Jim and Cherry Carpenter. Jim was president and chairman of the former Union Bank for many years and also served on the Community Foundation’s Board of Trustees for eight years, one as its chair. Cherry was a homemaker and active community volunteer for more than 50 years. One of her passionate interests was Camp Blodgett, a summer camp for students from economically disadvantaged backgrounds. Positive camp experiences help these young people develop their untapped potential through self-esteem and motivation. said. Additionally, the Carpenters were able to spread their capital gains tax over several years. One major difference between a charitable gift annuity and a charitable remainder annuity trust is that you can establish a gift annuity through the Community Foundation with as little as $10,000; trusts often require a more substantial initial investment. Calculate sample income and tax benefits at www.grfoundation.org.

“Serving as one of the Community Foundation’s Trustees really opened my eyes to the needs of the community and the simple and effective ways in which individuals can satisfy both their philanthropic goals and create a more positive financial environment for themselves,” Jim said.

The Carpenters transferred appreciated stock to fund charitable gift annuities that will provide lifetime income, part of which is income tax-free. “My Community Foundation annuity payments substantially exceed the dividends I received on the stock prior to gifting them to the Foundation,” Jim

You r Legacy

ChaRitabLe t R u St S
Charitable trusts allow you to “donate the tree, and keep the fruit” or “donate the fruit, and keep the tree.”

HeRe’S HoW IT WoRkS:
1 With the help of your professional advisor, you select an asset that will be used to fund your trust. 2 you transfer ownership of the asset to the trust, which owns and manages it for a specified period of time. This provides an immediate tax deduction. 3 While the trust holds the asset, it pays you, a charity or someone you designate income. 4 at the end of the trust term, the trust transfers the assets to Grand Rapids Community Foundation.

A valuable option in estate planning, charitable trusts provide maximum flexibility for giving a gift and securing a life income. Your options include a charitable lead trust (CLT) or several types of charitable remainder trusts (CRT).

Charitable lead Trust
• Retain and transfer appreciated property to family members at low cost. • Reduce the burden of gift taxes or probate and estate taxes on your property. • achieve a more favorable income tax position depending on the characteristics of the trust. • a charitable lead trust can be extremely useful to implement in a year in which you have an unusually large amount of taxable income and can use a very large current deduction.

With a charitable lead trust (CLT), you donate income to charity and retain the principal. Through the trust, you determine how much will be paid to Grand Rapids Community Foundation for how long. The principal that remains after the trust terminates will revert back to you or pass to another designated individual. You may choose between variable or fixed income payments. A CLT can substantially reduce the amount of gift and estate taxes because you or your estate can claim a charitable deduction for the Community Foundation’s charitable interest in the income payments.


Charitable Remainder Trusts

A charitable remainder trust (CRT) is one of the most flexible ways to give to Grand Rapids Community Foundation. With a charitable remainder trust, you donate an asset to charity and retain the income for life. Because the CRT is charitable, it can sell highly appreciated property without paying capital gains taxes, allowing the full amount of the asset to work. You may choose between fixed (annuity) or variable (unitrust) income.

Example: Mrs. Vasquez,
age 66, creates a charitable remainder annuity trust (payments to be made quarterly) with herself as sole beneficiary and Grand Rapids Community Foundation as the charitable remainderman. She funds it with stock valued at $300,000 (purchased years ago for $30,000) that was paying annual dividends of just $6,000. Mrs. Vasquez realizes a substantial charitable deduction and avoids capital gains tax. Her current annual income more than doubles. After her death, the trust assets will go to Grand Rapids Community Foundation. With the annuity trust, Mrs. Vasquez receives a lifetime income, takes advantage of tax benefits, and, after her death, establishes an unrestricted legacy fund that will carry her name or the name of a loved one in perpetuity.

Fixed Payments: Charitable Remainder Annuity Trust
• Provide lifetime income for yourself or other named beneficiaries. • Make a significant charitable gift. • Realize the security of a guaranteed lifetime income. • Save on estate taxes. • avoid immediate capital gains tax when original asset is sold. • Realize a charitable tax deduction. • increase income by converting low yield assets.

A charitable remainder annuity trust (CRAT) pays a lifetime income based on the initial value of the assets funding the trust. The payout rate must be at least 5% of the initial fair market value of the gift.
If you establish an annuity trust, you will receive a deduction for the present value of the charitable remainder interest and avoid capital gain tax on the transfer of appreciated long-term securities. Typically, the allowable charitable deduction from a CRAT is slightly greater than from a unitrust when the initial value and cost basis of the assets gifted are equal.
You may calculate the benefits of a charitable remainder annuity trust at www.grfoundation.org


You r Legacy

ChaRitabLe t R u St S
Variable Payments: Charitable Remainder Unitrust
• Provide lifetime income for yourself or other named beneficiaries. • Make a significant charitable gift. • Hedge against inflation: income may increase if assets grow in value. • Save on estate taxes. • avoid immediate capital gains tax when original asset is sold. • Realize a charitable tax deduction. • increase income by converting low yield assets. • make additional contributions if you like.

The percentage payment you receive from a unitrust varies from year to year as the fair market value of your trust assets fluctuates. If the value of the trust assets increases, so too would your payments. You must specify a payment rate (at least 5% by law). If your trust assets outperform that rate, the extra gains would be reinvested, eventually increasing your principal and payments. You may view this as a possible hedge against inflation, assuming growth in value of the trust assets is somewhat comparable to the inflation rate. The reverse, however, is also true. If your trust earns less than the rate you specify, you will still be paid that same percentage. This could erode your principal and lower your payments. To emphasize asset growth and a higher charitable deduction, establish a lower trust payout rate. If you select a higher trust payout rate, you’ll receive a greater annual payment and lower charitable deduction.

You can fund a unitrust with cash or, ideally, with long-term, highly appreciated securities. The charitable deduction you’re allowed is based on the fair market value of the assets (even though you may have purchased them for much less), the payout rate you choose, the number of individual beneficiaries you specify, and the age of the beneficiaries or the term of years the trust is established. Your tax, legal and financial planning counsel can help you assess the options best suited to your situation.

Example: Mrs. Vanderbeek,
age 66, creates a 5% charitable remainder unitrust (payments to be made quarterly) with herself as sole beneficiary and Grand Rapids Community Foundation as the charitable remainderman. She funds it with stock valued at $300,000 (purchased years ago for $30,000) that was paying annual dividends of just $6,000. Mrs. Vanderbeek

realizes a substantial charitable deduction and avoids capital gains tax. Her current annual income will immediately increase more than twofold. As the assets in the unitrust grow and are revalued annually, her annual income will increase as well. She can always add to her trust at any time. After she dies, the trust assets will go to Grand Rapids Community Foundation. With the

unitrust, Mrs. Vanderbeek receives a lifetime income, takes advantage of tax benefits, and, after her death, establishes an unrestricted legacy fund that will carry her name or the name of a loved one in perpetuity.


Like many Grand Rapids Community Foundation benefactors, Max Doering has been a lifelong resident of Grand Rapids. Max has seen the challenges faced by diverse local charities to answer the needs of a growing community. “I really wanted to give something back to this community,” said Max, a stockbroker for more than 40 years. “That’s why it was especially meaningful to establish our charitable remainder unitrust to benefit Grand Rapids Community Foundation.”

Max and his late wife, Lois, established their charitable remainder unitrust with appreciated stocks. Their gift provided an immediate charitable tax deduction, thus decreasing their tax liability during a high-income year. Max receives income during retirement, and as the trust’s assets grow in value, the trust will act as a hedge against inflation. Max and Lois were also able to make a much larger gift to Grand Rapids Community Foundation because they avoided paying capital gains taxes. Through their charitable remainder unitrust, the Doering’s generosity will continue to benefit the community that had contributed to their own prosperity.


You r Legacy

RemaindeR inteReSt in ReSidenCe oR FaRm
• Improve your cash flow. • make a substantial gift to Grand Rapids Community Foundation while retaining lifetime use of property. • Realize an immediate charitable tax deduction. • avoid capital gains tax. • enjoy a more favorable income tax position.

A gift of a remainder interest in a personal residence or farm allows you to continue to occupy the residence or operate the farm without disruption. You get an income tax charitable deduction for the present value of the remainder interest. In computing this value, depreciation may be taken into account. This gift permits you to avoid any potential capital gain tax on the built-in appreciation.

In contrast, should the same gift be made to a unitrust, you must give up possession of the property. But a gift of a remainder interest provides a deduction that frees up tax dollars into spendable income without causing any disruption in lifestyle. Taxes, insurance and normal maintenance remain your responsibility. You will be entitled to additional deductions upon making subsequent capital improvements.


Yo ur Legacy
Charitable bequests
Make a charitable gift from your estate with a simple bequest, as noted in your will.

Charitable Gift Annuity
Receive an income for life while making an immediate, significant gift.

Charitable Trusts
Tailor a charitable lead or remainder trust to your unique philanthropic and financial objectives.

Remainder Interest in Residence or Farm
Make a generous charitable gift while retaining lifetime use of your property.


Since 1922, Grand Rapids Community Foundation has worked to build this community’s permanent endowment and lead the community in strengthening the lives of its people.
Purpose Grand Rapids Community
Foundation makes grants to nonprofit organizations throughout Kent County, supporting arts and culture, education, community development, environmental preservation, health and human services. We seek to serve the community with leadership that encourages collaboration, demands accountability, values diversity, promotes justice, supports prevention and advances systemic solutions to community problems.

History Founded in 1922, Grand Rapids Community Foundation was one of the first community foundations in the United States and the first in Michigan. Like other community foundations, it is a public charity, chartered to safeguard the broad interests of the entire community it serves. Services The development staff at Grand
Rapids Community Foundation is available to help you define your philanthropic goals, discuss your charitable plans or evaluate giving options. We will work with you and your tax, legal and/or financial planning counsel to come up with the best plan for your situation. For more information or to set up an appointment, call 616.454.1751.

Leadership Grand Rapids Community
Foundation is governed by an elected 12-member volunteer Board of Trustees. Trustees serve one or two four-year terms.

Financial Management Grand Rapids
Community Foundation manages its investments and its spending by closely adhering to policies developed by volunteer committees and volunteer leaders and recognized experts in financial matters. The investment policy is designed to produce a total return that exceeds the rate of inflation by at least 5% annually. The spending policy, which allows us to grant 5% of the average market value balance over the past four years, allows grantmaking to continue at a relatively stable rate despite variations in the investment market.

note: The examples used throughout this book illustrate potential tax consequences of various gift options. Your particular situation may differ. Please call the Community Foundation at 616.454.1751 to learn more.



Community Your Foundation

For more information, call 616.454.1751 www.grfoundation.org

6/30/08 ©2008 Grand Rapids Community Foundation

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