Strategies and tax planning tips for your philanthropic, affluent clients

We can only imagine how anxious your clients must be to gain clarity about tax reform so that they can implement planning strategies, take care of the charitable organizations they care about, and move on to enjoying the holidays with friends and family. 

That's why this issue of our newsletter drills down into three areas we know are top of mind for you and your charitable clients:

1. Tax reform: What's the latest, and how could it impact charitable giving techniques?
2. Strategies of the wealthy: How much--and how--are billionaires deploying their wealth to help nonprofits?
3. Year-end giving: Remind me again what I should be telling my clients?

As always, please contact us directly if we can be of assistance as you serve your philanthropic clients. We are thankful for you!

--Your friends at the community foundation

Relax a little (maybe?): What’s off the table, what’s still in play, and what your charitable clients need to know now about tax reform

Late last month, the White House released a proposed $1.75 trillion revenue package, putting to rest (at least for now) some of the uncertainty as to how sweeping tax reform could upend wealth planning strategies via changes to top marginal rates, a restructuring of the capital gains tax, and lower estate and gift tax exclusions, all of which have been heavily discussed and debated over the last several weeks. For now, those particular big changes appear to have been dropped. 

Attorneys, accountants, and financial advisors who represent high-net worth clients are, however, keenly aware of how the just-proposed legislation still could pack a punch:

1. Where charitable giving is concerned, the proposed new surtax (modified from earlier versions) is not something that can be avoided or reduced through charitable deductions. That is because the proposed 5% surtax on taxpayers with more than $10 million in adjusted gross income is assessed on just that--adjusted gross income. Below-the-line deductions won’t help. Furthermore, an additional 3% surtax has been proposed for taxpayers with more than $25 million in AGI.

2. In addition, under this new proposal, pass-through entities, such as S corporations and partnerships, are still the subject of a 3.8% Net Investment Income Tax, as was the case under the prior version of the revenue package. Under the new proposal, this tax would be expanded to taxpayers with taxable income of $400,000 ($500,000 for joint filers) or more.    

3. Of interest to advisors who represent businesses and business owners, under the proposed new law, a 15% “corporate minimum tax” would apply to “book income” of corporations earning profits greater than $1 billion. For your clients who’ve historically relied on income tax credits, this is an important provision to watch because income tax credits would not be as valuable as they are now. 

4. Related, look out for a parallel increase to the global minimum tax rate, especially for corporate clients who have an eye on relocating headquarters to foreign countries. And under the new proposed laws, when a corporation buys back its own stock, it would be taxed like corporate dividends--plus a new 1% excise tax.

5. Finally, effective as of September 13, 2021 if the legislation is passed as written, high net-worth clients could be significantly impacted by the proposed limitation on “stock exclusions” under Internal Revenue Code Section 1202. For taxpayers with adjusted gross income of $400,000 or more, and for estates and trusts, only the 50% exclusion provision would remain. The 75% and the 100% exclusion would no longer be available.

The buzzword is “billionaire”: How tax reform discussions have pulled complex charitable planning strategies into the spotlight

Forbes reports that the latest headcount of American billionaires checks in at 724. That number surprises some people, and for different reasons. Many are surprised to learn that the number is so low, when the word “billionaire” has been used so frequently lately in discussions about changes to the tax laws. Others are amazed at the vast wealth created by not just dozens, but hundreds, of individuals.

Both reactions have sparked interest in how billionaires and other ultra high-net worth people structure their estate plans and support their favorite charities. Even if your client base doesn’t include one of the 724 American billionaires, it is still well worth your time to spend a few minutes getting familiar with this topic so you can carry on a conversation with curious clients. 

Here’s how to get up to speed:

1. Forbes compiles a list of the 25 most philanthropic billionaires. Scan it so that you’re generally aware of how this group conducts its charitable giving activities.

2. Know the basics of grantor retained annuity trusts and charitable lead trusts, especially because both vehicles have been the subject of conversation in the ongoing tax reform dialogue.

3. Understand the core mechanics of ultra high-net worth wealth transfer strategies. You might be surprised that what you learn helps you structure your own clients’ estate plans.

4. Internalize the old saying “No one gives away a dollar to save 50 cents.” In other words, no matter how aggressive the planning strategy and the resulting tax savings, your clients almost certainly would have more money for themselves and their families if they didn’t give money to charities. 

5. It flows naturally from item 4 that your clients probably don’t take their charitable giving lightly. Clients intend for their charitable dollars to make a difference in the causes they care about. The community foundation has its finger on the pulse of the needs in our region and which organizations are helping and how. Put us on speed dial! 

Year-end giving: Repeat, repeat, repeat

It's the season for email newsletters hitting your inbox with tips for tax planning. We get it! With so much information flying around for your clients, too, we highly recommend that you cut through the noise and mention four key tax strategies to your clients at least twice, and ideally three times, before late December: 

1. Don’t let clients miss out on the few provisions of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act that carried over to 2021, including the ability to deduct up to 100% of adjusted gross income (AGI) for cash gifts made directly to qualifying charities and the “universal” charitable deduction of $300 per taxpayer ($600 for a married couple). 

2. Unlike in 2020, when pandemic relief laws offered a tax break, this year your clients have to take required minimum distributions from their qualified retirement accounts. Especially for clients who take the standard deduction, you ought to consider a qualified charitable distribution, which allows eligible individuals to donate up to $100,000 directly from individual retirement accounts to a qualified charity. The community foundation is happy to help your client identify a qualified charity or structure a qualifying fund to receive a distribution.  

3. “Bundling” or “bunching” multiple gifts into tax year 2021 can help your clients who have had exceptionally high incomes this year. Donor-advised funds at the community foundation are particularly useful in these situations. We’d love to discuss this option! 

We know you strive to identify the optimal tax strategies for each client’s charitable giving. As always, please contact us to find out how we can make year-end tax savings as frictionless as possible for you and your charitable clients.   

Tax perks: Treats to start a happy new year

Congress extends charitable giving incentives

As your clients reboot after a wild 2020, now is a great time to address their charitable giving plans for 2021. COVID-19 has proven to be a marathon, not a sprint. Nonprofit organizations will be relying on the generosity of donors for the foreseeable future to stay afloat and serve the people who need their programs.

Consider dropping a quick note to clients for whom philanthropy is a priority, sharing a few tips that can help make 2021 a better year for our community: 

1. Even non-itemizers should plan to make at least $300 in cash contributions to qualifying charities (and now $600 for non-itemizing joint filers) this year. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, known as the Coronavirus Stimulus 2.0 bill, was passed by Congress on December 21, 2020 and signed by President Trump on December 28. The legislation extends the CARES Act’s temporary, above-the-line charitable deduction for contributions to qualifying public charities for tax year 2021. 

1. The Coronavirus Stimulus 2.0 bill also includes a one-year extension of the CARES Act’s provision increasing charitable deduction limits to 100 percent of AGI for contributions by individuals to qualifying charities. This creates an opportunity to work with your clients on a charitable giving budget for 2021, especially because you’ll want to run calculations to determine whether clients can benefit from this incentive, or whether a client would still be better off carrying forward charitable contribution deductions into future years. 

1. Given the extensions included in the Coronavirus Stimulus 2.0 bill, coupled with the general uncertainty about potential tax reforms under the Biden administration, it is wise to counsel your clients about being especially organized about charitable giving in 2021. Clients will want to be even more conscientious about the impact of dollars invested in the community, too. 

As always, we would be pleased to assist you and your clients. For example, donor-advised funds and other planning vehicles through the community foundation can help your clients organize their giving and deploy it in a way that maximizes results for the causes your clients care about. 

Keeping our community strong: Your role is critical

COVID-19 has significantly impacted nonprofit operations across the country and hampered nonprofits’ ability to help their communities during a crisis in which millions of people are in need. The National Council of Nonprofits reports widespread damage to nonprofits’ programs, services, supplies, staffs, and budgets due to the pandemic and current economic challenges. This means nonprofits need philanthropic support now more than ever.

At the same time, some donor segments have been steadily losing confidence in the nonprofit sector, according to the Give.org Donor Trust Report 2020: Trust and Giving During the COVID-19 Outbreak. For example: 

1. Although 24.4% of study participants reported in late 2020 that they planned to give more to charities, that figure represents a drop of more than 6% since early 2020.

1. Gen Zers are more likely than other generational cohorts to shift from giving money to charities to supporting local businesses instead. Specifically, 28.6% of Gen Zers report this preference, compared to 0% of Matures and just 1.9% of Boomers.

1. Related, 26.3% of Gen Zers report that they are not satisfied with traditional charitable donations.

As a trusted advisor to your clients and their families across generations, your opportunity here is to offer information and resources to help your clients become more giving savvy--understanding the impact of nonprofits, how to measure the success of their charitable gifts, and how to select nonprofit organizations who are delivering the greatest return on investment to the people they serve. Our team at the community foundation is deeply familiar both with the needs of the community and the nonprofits who are fulfilling them. We hope you won’t hesitate to reach out for support as you help your clients navigate ways to address our community’s challenges.

Consciousness on the rise: Tips for advising impact investors

The term “impact investing” is said to have emerged in 2007 as a descriptor for deploying capital not only to achieve financial returns, but also to foster social progress and/or avoid harm to people and the environment. 

Since then, impact investing as a discipline among individual and institutional investors has grown rapidly. According to Barron’s, a total of $502 billion was held in impact investments in mid-2019. A year later, that number stood at $715 billion--an increase of more than 42%. 

As inquiries from your clients increase, and more and more of them ask for your help in exploring impact investing options for their philanthropic and non-philanthropic dollars, keep an eye on opportunities that seem to promote having the cake and eating it, too. 

For example, in a recent private letter ruling, the IRS denied an organization’s application for 501(c)(3) status because the activities it proposed--creating an investment fund to carry out typically “charitable” activities--were not viewed by the IRS as charitable for tax purposes. The taxpayer requesting the ruling had proposed activities such as economic development in low-income communities and initiatives to fight climate change.

Though an eyebrow-raiser at first glance, the ruling ultimately does a nice job of reinforcing the distinction for tax purposes between program-related investments, which is itself a charitable activity, and mission-related investments, which is not a charitable activity.

It’s relatively easy for investment-focused professionals to miss the distinction, but the distinction is critical for proper tax treatment. A program-related investment (PRI) must significantly further a charitable purpose and can’t have a significant investment purpose, which effectively means that the investment is not one that a pure investor would be likely to make because its possibility of achieving competitive returns is extremely slim.  

On the other hand, a mission-related investment (MRI) still has to meet prudent investment standards, even if it might not be the most profitable investment option on the market because it is taking mission into account. 

The challenge for you as an advisor is to help your clients evaluate impact investment funds that appear to promote financial returns simultaneously with community good, with an implication that tax benefits are somehow woven into the offering, which may well be too good to be true. Our knowledgeable staff at the community foundation is here to assist you!    

Year-end mash up: Bequests, tax planning, and community needs

Taking chances: Will hindsight point to 2020 as the year to maximize giving?

The November 3 election left wealth managers, tax professionals, and estate planners with a dilemma: Should advisors counsel their clients to implement planning techniques in anticipation of sweeping changes to the tax laws, or instead assume the status quo will continue and stay the course with clients’ current plans? 

Here’s what’s going on and how the proposed changes might affect charitable giving strategies. 

Under Joe Biden’s proposed tax plan, taxpayers making more than $400,000 per year would be taxed at a top income tax rate of 39.6%, an increase from 37% under current law. That would mean charitable giving would become more tax efficient under the new law for some taxpayers.

However, a separate provision in Biden’s proposed plan would impose a 28% limit on charitable deductions for taxpayers who make more than $400,000 per year. This would mean that instead of avoiding income tax on charitable gifts at the rate of 39.6% as described above, these taxpayers would escape income tax only at a rate of 28%. (A similar provision was proposed, but never enacted, during the Obama Administration.) 

Biden’s tax proposal also calls for increasing--from a maximum rate of 20% to 39.6%--the capital gains and dividend tax rates for taxpayers whose annual earnings exceed $1 million. For affected taxpayers, this change would create opportunities to avoid significantly more tax than is possible under current law for gifts of appreciated assets. An increase like this would create a huge incentive for philanthropists to support charitable organizations.

Next, Biden’s proposal calls for a 3% reduction of itemized deductions for taxpayers making more than $400,000 per year. This is reminiscent of the so-called “Pease Amendment” that was repealed in 2018. Although the reinstatement of this rule could have some negative effects on charitable giving, the rule’s impact would be blunted for taxpayers for whom the reduction is absorbed by other types of itemized deductions (mortgage interest payments, for instance).

Charitable legacies: What’s on tap for bequests?

Perhaps the component of Biden’s proposal with the biggest potential impact on ultra-wealthy philanthropists is Biden’s intention to raise estate taxes and change the way capital assets are taxed after death. 

Currently, the gift and estate tax exemption per person is $11.58 million and $23.16 million for a married couple. These amounts are effectively double what they were before the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA calls for an automatic sunset of these increases on December 31, 2025, at which point the exemption will drop back down to $5 million per person, as adjusted for inflation. Under Biden’s proposed tax plan, though, the estate and gift tax exemption and rates would be restored to the lower levels of more than a decade ago.

In addition, Biden’s proposal calls for substantial elimination of the step up in basis from the taxpayer’s cost to fair market value at the time of death, further complicating existing estate plans for many families. 

Some philanthropists are maximizing gifts to family members in 2020 to take advantage of their remaining exemptions and deferring charitable gifts to 2021 and beyond, under the assumption that tax laws will change dramatically. Others simply are not comfortable with making such large gifts immediately--and thereby significantly reducing their own net worth--when it might end up not mattering.  

Advice to advisors: Seek clarity about clients’ commitment to community

The odds of Biden’s proposed tax plan becoming law depend on factors that won’t be known until Georgia’s run-off elections on January 5, which will decide whether the Democrats or the Republicans will control the United States Senate.

This uncertainty prevents advisors from having confidence about advising clients whether to implement planning strategies that would take advantage of the potential window of opportunity at the end of 2020, before new laws take effect. Should clients act now, betting that significant changes to the tax law are in store for 2021, or, betting on status quo in 2021, hold off on taking action now but potentially trigger significant tax hits if tax laws do wind up changing? 

Despite the uncertainty about exactly what might happen with the tax laws in 2021 and beyond, there are still opportunities for you to advise your charitable clients with conviction that they are doing the right thing for themselves and for the causes they care about. To that end, keep in mind that the CARES Act includes charitable giving incentives for 2020:

• Even for taxpayers who take the standard deduction, a reduction in adjusted gross income is available for charitable contributions up to $300 per taxpayer. Donations to donor-advised funds don’t count; nonetheless, this deduction is a great way for clients to help their favorite organizations in this challenging year. 

• Individuals who itemize deductions can elect to deduct donations up to 100% of their 2020 adjusted gross income instead of being capped at 60%. For corporations, the CARES Act increased the cap from 10% to 25% of taxable income. (Again, contributions to donor-advised funds and private foundations are not eligible.)

As always, remember that the community foundation can help you develop your clients’ future plans. A donor-advised fund is a powerful estate planning tool. A client can execute wills and trusts that leave a specific bequest or remainder interest to a donor-advised fund at the community foundation. This bequest triggers all the tax benefits of a direct bequest to a charity because the community foundation, and therefore the donor-advised fund, qualifies as a 501(c)(3) organization. 

Here are three key takeaways:

• Your client may already have established a donor-advised fund at the community foundation that the client is using to make annual gifts to charity. This donor-advised fund can be the recipient of a charitable bequest. 

• Even if your client is not actively using a donor-advised fund currently, the client can still set up what is known as a “shell fund” now to receive a bequest later. A shell fund is governed by a donor-advised fund document, but the fund itself does not contain any assets until the client passes away and the bequest is activated.

• A client can adjust the terms of the donor-advised fund anytime before the client’s death. This gives your client maximum flexibility to adjust charitable beneficiaries without the need to amend a will or trust. 

Please contact our team for assistance with the proper language for designating a donor-advised fund at the community foundation as a bequest recipient. Our team also will work with you on the terms of the donor-advised fund itself. For example: 

• Your client can use the donor-advised fund as a way to keep the next generation--or generations--involved with the family’s philanthropy to carry on the family’s legacy of community support. Surviving family members can serve as advisors to the fund and make decisions about which causes and organizations to support.

• It’s also possible to create several donor-advised funds--one for each grandchild, for example--so that each beneficiary has their own charitable giving account.  

Your team at the community foundation is always happy to help. We look forward to hearing from you and wish you all the best for the season.

Cybersecurity, starting a charity, and conservation easements

Advising clients on starting a charity

As 2020 marches on with little relief in sight from crises affecting our region, more and more attorneys, accountants, and financial advisors are fielding questions from well-intended clients who are exploring starting their own nonprofits to help people in need. 

Whether a client's passion is health care access, support for the arts, social justice, or any one of hundreds of other worthy causes, it's critical that you provide counsel regarding the pros and cons of forming a brand new nonprofit.

Here are suggested topics to include in your client discussions:

1. For profit, or nonprofit? Help your client decide whether they really, truly want to start a charity, or whether what they’re envisioning would be better structured as a for-profit business. Explain to the client that the rules and tax advantages are different, and so is the way the enterprise is funded. Most charities keep the lights on by securing donations. Businesses keep the lights on by selling goods or services. Either way, you’ve got to pay employees and run a budget. This seems like common sense and something that any astute client would understand, but sometimes even these basic principles are easy to overlook when enthusiasm for a cause takes over. 

2. The state and the Feds. Explain to the client that if they do decide to start a new charity, just like a business, it still requires setting up a legal entity. Unlike a for-profit business, though, to qualify as a tax-exempt nonprofit, the client will need to apply to the Internal Revenue Service for an exemption under Section 501(c)(3). This exemption is what allows the organization to be free from paying income tax, and it also allows people to donate to the organization and be eligible for a tax deduction on their own tax returns. Again, these rules seem like Charity 101 material, but never assume your client is in the know. 

3. Sell, sell, sell. Most people who start a charity are passionate about a cause and probably already have programs in place or in mind to help others. The trick, though, is to get out there and share the news about the cause to raise money. Your client needs to be aware that starting a new charity involves “sales,” just like a for-profit enterprise, except they most likely will be asking for donations to support their good work instead of selling goods or services like a for-profit business. Certainly nonprofits can generate earned income, but most organizations also should be designed to receive public support in the form of grants and contributions to avoid certain tax rules, such as those prohibiting excess “unrelated business taxable income.”  

4. Verify the unmet need. Finally, and perhaps most importantly, encourage your client to research whether there are any existing organizations that are already serving the mission your client intends to fulfill. Indeed, during challenging economic times such as these, best practices suggest that two or more nonprofits combining their efforts is a good way to create efficiencies and ensure more effective service delivery to people in need.   

Weeding out taxpayers who abuse conservation tools

As environmental consciousness continues to rise, so does the subject of conservation easements as a tax-savvy charitable giving tool. Perhaps your clients have even explored this vehicle, which involves the client giving up certain rights to the ability to alter a tract of land, with the intent to preserve the land indefinitely. The reason this transaction creates a charitable gift is because the easement typically results in a lower property value because the parcel's usefulness for commercial purposes is eliminated or drastically reduced. 

Conservation easements are not new. A resource called the National Conservation Easement Database provides mapping and information related to all conservation easements in the United States, which as of 2018 totaled 130,000 in number and covered nearly 25 million acres of land. 

Unfortunately, conservation easements can be the target of abuse by unscrupulous taxpayers seeking to undermine the Internal Revenue Service’s strict parameters for deductions and tax benefits generated from the grant of a conservation easement. This abuse has caught the attention of lawmakers. On August 25, 2020, Senate Finance Committee Chairman Chuck Grassley and Ranking Member Ron Wyden released a report on the findings of investigations into a few “bad actors” who, they believe, are circumventing the rules and thereby reducing federal tax revenue to the tune of billions of dollars. 

The report is a must-read if you have clients who are involved in conservation easements or are considering using this planning vehicle. 

IRS speaks out on cybersecurity

According to the American Bar Association’s 2019 Legal Tech Report, 26% of law firms experienced some type of security breach in 2018. Although fortunately only 3% of the law firms affected reported compromised client data, the risk is real. As virtual work environments have become the norm at many law firms, accounting firms, and financial advisory firms, the issue of cybersecurity has landed squarely on the Internal Revenue Service’s radar. 

In IR–2020–176, released on August 4, 2020, the IRS strongly recommends that every firm deploy a virtual private network (VPN) to guard against security threats. “As teleworking or working from home continues during the coronavirus,” the notice says, “VPNs are critical to protecting and securing internet connections."  

Stress in the sector: Tips for relief

Keep clients informed about stress on the social sector

Peter Drucker once wrote “Only the social sector, that is, the nongovernmental, nonprofit organization, can create what we now need, communities for citizens.” Charitable giving is an important component of American society. In 2019, for example, total giving by individuals (including bequests), foundations and corporations reached nearly $450 billion, according to Giving USA 2020: The Annual Report on Philanthropy for the Year 2019, released this summer.

Unfortunately, COVID-19 is taking its toll on nonprofit organizations and philanthropic institutions. In a report recently released by Deloitte's Monitor Institute, the writers offer their predictions for how charities will fare, depending on how the pandemic--and our response to it--play out. Early evidence shows that total 2020 giving will decline significantly. According to the Chronicle of Philanthropy, giving declined six percent during the first quarter of 2020, which translates to $5 billion in lost revenue to nonprofit organizations.

One of the most important ways you can help your clients support the charities they care about is to do everything you can to keep clients informed about the increasing challenges faced by the social sector. We encourage you to reach out to the team at the community foundation to answer questions and provide resources to share with your clients to help them help the causes they love.

Advocacy efforts accelerate and expand to help communities

A silver lining of the pandemic and struggling economy is an unprecedented effort by philanthropic leaders to ensure that communities stay supported through fiscal and tax incentives for nonprofits and charitable giving. We encourage you to seek out and share examples of what’s going on in the philanthropic sector to help ease the burden of COVID-19. For instance:

• A letter from the Council on Foundations to Congressional Leaders in advance of future relief packages, encouraging the inclusion of provisions to enhance charitable giving, increase support for nonprofits, and help state and local governments.

• A tremendous response from community foundations across the country, encouraging donors to activate donor-advised funds to support causes in the community that can provide immediate and direct assistance to those most affected by the pandemic.

• Increasing interest in mutual aid organizations, which is fueling grassroots response to people in need across the country. 

In short, the spirit of philanthropy is alive and well. Sharing this with your clients will help build the momentum and expand the impact of charitable giving during this time of crisis. 

IRS ruling helps employers and employees help pandemic victims

In Notice 2020-46, the IRS said compensation treatment will not be triggered when an employer makes cash payments to a charitable organization based on employees’ forgoing vacation, personal, or sick days. So-called “leave donation programs” are becoming popular ways for employees to make meaningful contributions to organizations in need. To qualify, an employer’s payments must benefit victims in that geographic area, and payments must be made in 2020. The foregone leave won’t be treated as gross income to employees. Furthermore, the employer may deduct the payments as a charitable contribution or business expense, if otherwise eligible.

Special edition: Social justice and charitable giving

Greetings from your community foundation.

We hope this special edition of our newsletter finds you and your family well.

Recent events in communities across America are painful reminders to all of us that systemic racial inequity and injustice in our society continues to severely damage the quality of life for Black people. 

Our responsibility as your community foundation is to strive for positive change in our region, especially as it relates to transforming systems that have been broken for far too long. 

Part of that responsibility is our duty to you--attorneys, accountants, and financial advisors--to help you serve the donors, nonprofits, and citizens who are your colleagues and clients. 

To that end, we would like to suggest actions you can take to join us in supporting Blacks in the community we all love.

Donor-advised funds as anti-racism impact investing tools

Donor-advised funds are sometimes described as “charitable checking accounts.” This explanation is far too limiting, especially now. Yes, donor-advised funds established at the community foundation are convenient and tax-savvy. But the benefits to society and community impact run far deeper.

Embedded at the intersection of donors, nonprofits, civic leaders, and citizens, community foundations serve on the front lines of impact investing, including offering options for impact investing through donor-advised funds. Our team understands where capital can be deployed to result in the swiftest and deepest positive change for Black people in our community. If you aren’t yet familiar with the growing importance of impact investing, it’s a good time to get up to speed. 

For inspiration, we recommend that you become familiar with the proactive strategy adopted by Andreesen Horowitz in establishing the Talent X Opportunity Fund, a donor-advised fund. Anything but passive, this fund is an example of roll-up-your-sleeves philanthropy designed to immediately address societal injustice. 

Our community foundation team can work with you and your clients to establish donor-advised funds with a wide range of asset levels. Whether your clients are venture capitalist investors or small business owners, we would be honored to assist you in supporting this critically important cause. 

Start educating the next generation, right now

Learning about the destructive forces of racial injustice is a priority. Knowledge, although insufficient when not coupled with action, is a necessary step for Americans who do not yet understand the unforgivable circumstances of Blacks. 

We encourage you to urge your clients to waste no more time in doing everything possible to become educated about racism in our communities. Family members of all ages can learn together with the help of these and other resources: 

• Each Kindness, by Jacqueline Woodson; 

• All American Boys, by Brendan Kiely; and

• Thoughtful advice from Harpers Bazaar for how to start planning for an important discussion around the Thanksgiving table. 

Show examples

Your clients will undoubtedly benefit from seeing examples of anti-racism philanthropy, especially if they are business owners, private investors, or corporate executives. Three items to help:

• A growing number of tech companies are stepping up to match their words with money to fight racism. 

• The business case for battling racial injustice is gaining strength.

• Private sector philanthropists and donors are stepping up to better understand the perspectives of nonprofits and their leaders who face the struggles of Black communities every single day. 

Expand investment options

The $69 trillion asset management industry is riddled with a lack of diversity. Last year, a study published by the Knight Foundation revealed disparities: 

• Less than 4% of publicly-traded funds are run by people of color.

• Firms owned by women and minorities combined manage just 1.3% of assets. 

The study included a small glimmer of hope: Representation of diverse-owned firms among hedge funds, real estate, and private equity has shown modest gains in recent years. 

Professionals who are mindful and proactive about combating racial injustice will be naturally curious to seek out investment funds where decision-makers and top executives are Black.

As always, please contact the team at the community foundation to learn more about what you can do to join us in our important community leadership work to bring an end to the racial bias that is embedded in our daily lives. Your philanthropic commitments and those of your clients can, and will, make a difference.