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Managing Foundations and Charitable Trusts: Essential Knowledge, Tools, and Techniques for Donors and Advisors

ISBN: 978-1-118-03826-0
288 pages
August 2011
Managing Foundations and Charitable Trusts: Essential Knowledge, Tools, and Techniques for Donors and Advisors (1118038266) cover image


The insider's guide to charitable organizations for donors and their advisors

Do you know when to use a private foundation, a donor-advised fund, or a charitable remainder trust or other charitable vehicle? Do you know the different tax benefits, limitations, and control rules for each alternative? Do you have an appropriate investment policy for your endowed charities? Do you have a rubric for avoiding fraud? Do you know what to look for to make sure that your charitable donations don't do the opposite of what you intend?

In Managing Foundations and Charitable Trusts, Roger D. Silk and James W. Lintott provide a comprehensive guide for charitable donors and their advisers. Additional topics include:

  • Foundation Governance
  • When to seek additional professional help
  • When and how to turn a CRT interest into cash
  • Key tax issues
  • Creating a legacy
  • Why tax planning is so difficult, and how to approach it

Straightforward and authoritative, Managing Foundations and Charitable Trusts is a handy, easy-to-read guide that all donors and their advisors will want to keep on hand.

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Table of Contents



Chapter One: The Basics of Charitable Giving.

Direct Gifts.

Supporting Organizations.

Donor-Advised Funds.

Private Foundations.


Chapter Two: Tax Incentives and Limitations.

Four Powerful Tax Incentives.

Details on Tax Deduction Limits.

Finding the Best Giving Strategy.

The $1.6 Trillion Loss.

Estate Taxes.


Chapter Three: Charitable Planning and Taxes.

Giving Approach.

Tax Planning Complexity.

Guidelines for Analytical Expenditure; Or, is Analysis Worth it?

What to Do When Tax Rates are Uncertain.

Timing of Gain Realization.

Charitable Remainder Trusts and Deferral.


Chapter Four: Planning with Charitable Lead Trusts and Charitable Remainder Trusts.

Charitable Lead Trusts.

Charitable Remainder Trusts.

Flexibility and Irrevocability.

Chapter Five: Foundations and Children.


Bringing Families Closer.

Transmitting Values.

Providing Valuable Skills.


Chapter Six: Benefits of Giving While You’re Still Alive.

Personal Satisfaction.

Create a Legacy.

The Problem with Waiting.

From the Grave: Control—But Not Too Much.

What About Too Little Direction?

Who Gets Control?


Chapter Seven: Effective Foundations: The Business of Philanthropy.

The Mission Revisited.

Getting Started.

Know Your Charities.

Governing for Effectiveness.

Approaches to Grant Making.

You Get What You Negotiate.

Stand on the Shoulders of Others.

Outside Experts Can Make the Difference.

Types of Support: Periodic versus Endowment, General versus Program.

Is Measurement Worthwhile?

Establishing Measures.

Provide Feedback.

Give Wisdom in Addition to Wealth.

Give Strategically.

Exercise of Leverage.

Make Foreign Donations Deductible.

Use Public Relations Effectively.

Create Financial Leverage through Tax-Exempt Financing.

Let Your Foundation Do the “Dirty” Work.


Chapter Eight: The Road to Hell Or, Beware of Unintended Consequences.

Food Aid.

Private Charity and Unintended Consequences.

Fungible Money and Inadvertent Funding of Terrorism.

How to Give Restricted Grants.

Poverty – Again.

Chapter Nine: Developing an Appropriate Foundation Investment Policy.

What to Include in an Investment Policy.


Chapter Ten: Developing and Implementing a Foundation Asset Allocation Policy.

Differences between Corporation and Foundation Investment Plans.

The Seven Deadly Sins of Foundation Asset Allocation.

Developing a Good Asset Allocation Policy.

Should an Asset Allocation Policy Change over Time?

Capturing the Rebalancing Bonus.

Active Management versus Indexing.

Who Is Responsible for the Asset Allocation Policy?


Chapter Eleven: Main Themes in Legal Compliance.

Some Compliance Errors May Seem Funny, But They're Not.

A Fail-Safe System.

Required Activities.

Prohibited Activities.


Chapter Twelve: Fraud, Inflation, and Market Risk.

Stanford Case.


Baptist Foundation of Arizona Case.

The Bre-X Fraud.

Allied Capital.

Fraudulent, or Not? You Decide.

What is XYZ?

How Will Social Security End?

Promised Benefits.

Real Terms.

Inflation – A Brief History.

Inflation Indexing.

Foundations and Endowments are Highly Exposed to Inflation.

Avoiding Fraud.

Chapter Thirteen: Other Planned Giving Vehicles.

Charitable Gift Annuity.

Gift Annuities versus Regular Annuities.

Partial Exclusion of Annuity Payments from Income Tax.

Bargain Sale.

Charitable Gift Annuity versus CRT.

Remainder Gifts with Retained Life Estate.

Pooled Income Funds.

Chapter Fourteen: Donor Advised Funds.


Guidelines – Highlights.

Fees and Costs.

Chapter Fifteen: Building Assets with Charitable Planning.

Professionally Managed, Turnkey Private Foundations.

Foundation Manager's Role.


Chapter Sixteen: How to Select a Foundation Manager.

Choosing a Full-Service Manager.


Chapter Seventeen: What Can You Donate to Charity?

Publicly Traded Securities.

Nonpublicly Traded Business Interests.

Tangible Personal Property.

Intangible Personal Property.

Qualified Retirement Plans.

Real Estate.


Chapter Eighteen: When the Shoe No Longer Fits What to do if you get tired of your private foundation, donor advised fund, charitable remainder trust, or charitable gift annuity.

Private Foundations.

Charitable Remainder Trusts.

Getting Rid of Other Charitable Vehicles.


Selected Resources.

About the Authors.


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Author Information

Roger D. Silk, CEO of Sterling Foundation Management, is widely recognized as a leading expert in the field of private foundations and charitable trusts. As a founder and board member of several nonprofit organizations, former bond trader at the World Bank, and Stanford-trained PhD economist, Dr. Silk possesses a unique blend of experience, practical knowledge, and theoretical insight that has enabled him to help build Sterling Foundation Management into the market leader that it is today.

James W. Lintott is Chairman of Sterling Foundation Management and a board member of Dean and Deluca and several private investment companies. He has over two decades of experience working with wealthy individuals and families. In addition, Mr. Lintott serves on the boards of a number of nationally recognized charities, including the Freer/Sackler Galleries of the Smithsonian Institution, the U.S.-Japan Foundation, and Best Buddies International.

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