giving in the u s
TRANSCRIPT
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G IVING IN THE UNITED STATES -
KEY FIGURES
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Total 2017 contributions: $410.02 billion(Source: Giving USA 2018)
TIP - Foundation Center
Foundation Directory Online - Foundation Maps
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Total 2017 contributions: $410.02 billion
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FUNDING TO AFRICA
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INCENTIVES TO G IVE
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THE U.S. TAX CODE -
GENEROUS AND TARGETED INCENTIVES
- Gifts of cash - deductible up to 60% of donor’s adjusted gross income (AGI).
- Gifts of publicly traded securities - deductible up to 30% of AGI + no capital gain taxes.
- Possibility of a five-year carryover for the excess not used.
- Gifts of life insurance policies and retirement plan assets.
- Bequests - estate tax deduction for the entire amount of the gift (no maximum limit).
- Gifts of artworks - In most cases, the donor is eligible for a tax deduction for the ‘fair market value’ of the
artwork, but only if the beneficiary uses the gift for purposes related to its mission for at least three years.
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IV.
RAISING FUNDS IN THE UNITED STATES
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501(c)(3) Public Charity
Definition: A nonprofit that is exempt from U.S. federal income tax under Section 501c3 of the Internal Revenue Code.
Incorporate as a U.S. organization
Submit Form 1023 for IRS Registration to apply for tax-exemption
Recruit and maintain independent Board
Set-up and maintain legal mechanisms to ensure independent status from foreign charity;no conduit. Must maintain discretion and control
File yearly auditing and submit Form 990
Apply for state-by-state registration for gift solicitation
Provide tax receipts to US taxpayers
Pass “public support test”
First Year Cost>$25,000
Depending on legal costs, operating expenses, state registration fees, administrative costs
Annual Cost >$25,000
Depending on legal costs, operating expenses, state registration fees, administrative costs
Example “Friends of” organizations
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TERMS – ALTERNATIVES TO 501C3
- Equivalency Determination – A way to show that an international organization is the equivalent of a U.S. public charity. See: NGO Source
- Expenditure Responsibility – A set of rules that govern steps to ensure thatfunds granted to an organization not classified by the IRS as a public charity are spent for charitable purposes.
- Intermediary – Intermediary organizationsare public charities that raise funds in the U.S. and re-grant them internationally.
- Fiscal Sponsor – A formal arrangement in which a 501c3 public charity sponsors a project that lacks taks-exempt status. This alternative to starting a 501c3 allows an NGO to seek grants and solicit donation taks-deductible donationsunder the sponsor’s exempt status.
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PARTNERING WITH A ‘FISCAL SPONSOR’
Advantages of fiscal sponsorship vs. setting up a stand-alone public charity:
Choosing a fiscal sponsor:
- Fit with your geographic and issue focus
- Track record, reputation and image
- Knowledge of U.S. regulations
- Fee structure
- Width of services and quality of interaction with staff
- No need to incorporate and apply for federal tax exemption
- No need for a board with formal board meetings
- No need for audited financials and filing of annual tax returns
- No challenge relating to the public support test
- Fiscal sponsor takes care of the back office
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501(c)(3) Public CharityAmerican Friends
Fund
Incorporate as a U.S. organization
Submit Form 1023 for IRS Registration to apply for tax-exemption
Recruit and maintain independent Board
Set-up and maintain legal mechanisms to ensure independent status from foreign charity; no conduit. Must maintain discretion and control
File yearly auditing and submit Form 990
Apply for state-by-state registration for gift solicitation
Provide tax receipts to US taxpayers
Pass “public support test”
First Year Cost
>$25,000Depending on legal costs, operating expenses, state registration fees, administrative costs
$1,500
Annual Cost
>$25,000Depending on legal costs, operating expenses, state registration fees, administrative costs
Based on how much is raised: 5% - 0.5% of funds raised per year
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THE K ING BAUDOUIN FOUNDATION UNITED STATES (KBFUS) -
SOLUTIONS FOR AFRICAN NONPROFITS
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Set-up cost Yearly Fee Deducted Fee Net Gift
CAF America $1,000 $2,500 $1250 or 5% $20,250
Global Giving $0 $0 $3750 or 15% $21,250
KBFUS $1,500 $0 $1250 or 5% $22,750
In Year 1, NGO X receives $25,000 in gifts
Annual Fee Deducted Fee Net Gift
CAF America $2,500 $5,000 or 5% $92,500
Global Giving $0 $15,000 or 15% $85,000
KBFUS $0 $5,000 or 5% $95,000
In Year 2, NGO X receives $100,000 in gifts
KEEP MORE OF WHAT YOU RAISE
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- An American 501(c)(3) public charity, based in New York, established 1997.
- Mission: To facilitate thoughtful, effective giving to Europe and Africa.
- Services for U.S. donors with international interests.
- Solutions for European and African nonprofits seeking to raise funds in the USA.
- Innovative learning opportunities.
- Annual Revenue (2017): $23 million.
- Affiliated with the King Baudouin Foundation (Brussels, Belgium).
KBFUS IN A NUTSHELL
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An American friends fund at KBFUS -
A cost-effective solution for European & African nonprofits seeking to raise funds in the U.S.
- Saves them the trouble and expense of setting up their own 501(c)(3) public charity.
- Easy to set up + nonprofit chooses the name for its fund.
- Contributions are fully tax-deductible for U.S. tax purposes.
- KBFUS takes care of all tax and legal issues + back office.
- One time set-up fee ($1,500) + management fee (5% - 0.5% of funds raised / year).
- 300+ partners from all across Europe and Africa - including:
AMERICAN FRIENDS FUNDS
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DATA COLLECTION: MONTHLY STATEMENTS
- CLEARLY TRACK DONORS, GIFTS AND
GRANTS
- USE DATA TO INFORM RESEARCH AND
DONOR CULTIVATION
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FLEXIBLE WAYS FOR DONATE
- CREDIT CARD
- CHECK
- MONEY ORDER
- BANK WIRE
- APPRECIATED STOCKS
- BEQUESTS
- REAL PROPERTY
- ART COLLECTIONS
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- Each year, KBFUS organizes an intensive study visit on the ‘Art & Science of Fundraising’.
- Four days of discussions with some of New York City’s most talented fundraising
professionals.
- Objective - introduce African cultural institutions and universities to successful
development strategies.
- Program is made possible thanks to the generosity of the American Express Foundation.
THE ART & SCIENCE OF FUNDRAISING
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CONTACT INFORMATION
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Jean Paul Warmoes, Executive Director, [email protected]
Ellena Fotinatos, Deputy Director, Donor & Nonprofit Services, [email protected]
Hafeeza Rashed, Senior Advisor, Communications & Outreach, [email protected]
King Baudouin Foundation United States (KBFUS)10 Rockefeller Plaza, 16th Floor, New York, NY 10020
Phone +1 (212) 713-7660
kbfus.org
