March 1, 2011

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Article

Plan to Give

Give Back in Your Own Way

Candace Little

March 1, 2011

Are you a philanthropist? Do you have extra funds to donate? Are you interested in supporting a nonprofit or cause? Perhaps starting your own fund? As long as you want to give in some way, there are certainly plenty of ways to do it. And that—deciding where to give, when to give and how much to give—is one of the challenges of giving, says Fraser Nelson, executive director of the Community Foundation of Utah. The Community Foundation works as a large connection-maker for nonprofit organizations seeking donations from generous companies and individuals. Companies are often approached by different organizations to donate, often in a manner that forces executives to make a quick decision about whether or not to give. Nelson suggests that executives take a more organized approach and have their answer decided before they are solicited. She advises business owners who want to give strategically to make and follow a giving plan. This involves becoming familiar with what the community needs, aligning those needs with company or personal values, and putting a timeline to the donations. One-Stop Shop One plan Nelson suggests is the Donor Advised Fund (DAF). Setting up a DAF allows the Community Foundation to help donors decide where to give by researching the most sound nonprofit in the donor’s particular area of interest, like distinguishing one animal welfare organization from another. Setting up a DAF also means that when a nonprofit is seeking donations, they can be directed to the Community Foundation, as manager of your fund. The DAF requires first-time users to commit a $5,000 donation to get started. The donor is then asked to provide direction regarding where the $5,000 should be allocated. From there, the Community Foundation researches existing funds and nonprofits to determine which organizations should receive the gift, according to the donor’s interests and values. The DAF is a one-stop shop, even cutting the check to the organization selected to receive the gift. “The Community Foundation becomes that intermediary, and for some people that is a really big benefit,” says Nelson. “Also just for people who know what they want to give to, we do all of the back office paper work—we’re sort of payroll with a whole lot of expertise. There are also very clear tax advantages to setting up a DAF rather than a private foundation.” But Nelson says the biggest benefit to starting a DAF or having any type of organized giving plan is that it gets company executives and their employees thinking about their values and how they want to give back to the community. Giving Your Share The Community Foundation helped Tim Brown, COO of BotProof.com, find a giving solution that fit his situation. Founded in 2007, BotProof is a software company that provides ad display technologies to help protect advertisers and publishers from bot attacks. Knowing that the company’s goal is to go public, Greg Warnock, principal investor at Mercato Partners and chairman of the board of trustees at the Community Foundation, suggested that instead of giving cash, Brown gift shares of his company. This way, as BotProof continues to grow and eventually goes public, a donation will already by set up. “It was a great way for us to start giving back to our community, allowed us to preserve cash, and yet allow the foundation to participate in our upside,” says Brown. For Brown, the only decision he’s made is that he wants to give. He is still deciding where his funds will go. “That has yet to be determined,” he says. “As I work more with the foundation, I hope to find a targeted cause that lines up best with our corporate goals.” Not Quite There? Not all execs are in a position to give monetary donations—either personally or through their business. But Brown says that you don’t always have to give money to help out. He says what he enjoys most about giving is becoming personally involved with an organization. “The best part has been the sharing of expertise with organizations that can immediately put that knowledge to work to make meaningful change,” Brown says. “Whereas cash always is welcome, your expertise is perhaps the most scalable in terms of impact. Nonprofits’ executive directors can be super charged in terms of performance, focus and impact to mission with even minimal time commitment from business executives.” Brown has traditionally given his expertise and made donations to nonprofits he believes in, but this is the first time he has given by way of donating company shares through the Community Foundation. His two partners each have their own causes they assist with as well. CEO Jason Koziol works with law enforcement in Chicago, and CTO Anthony Kozio shares his time and experience with Lighthouse for the Blind in Florida.
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