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FOR IMMEDIATE RELEASE:
FOR FURTHER INFORMATION CONTACT:
Roger D. Silk
Sterling Foundation Management, LLC
Phone: 818-788-2633
RogerSilk@Sterlingfoundations.com
New Study Shows How Wealthy Donors Can Give More and Still Have More
Wealthy donors who want to support charity and provide for their children would be better off setting up a private charitable foundation and funding it each year, rather than waiting until they die, a new study finds.
The study describes how a donor who sets up a private charitable foundation and contributes to it annually can have over twice as much money to give to charity, and still leave more to his or her children, as compared to the same donor who instead waits until death to give to charity.
"Few donors realize the tremendous wealth-building power of annual contributions to their private foundations. The annual contribution strategy we analyzed in our study takes maximum advantage of the income tax breaks Congress created to encourage charitable giving," says Roger D. Silk, Ph.D., author of the study and principal of Sterling Foundation Management, (Sterlingfoundations.com) a firm that handles the complex paperwork private foundations are required by law to complete each year. His findings are based on financial analysis and computer models of long-term asset growth. Dr. Silk holds a Ph.D. in applied economics from Stanford and is a Chartered Financial Analyst.
"Our study shows that if you're planning to create a charitable foundation, you're literally throwing away money if you wait until you die before you do it," says Dr. Silk. "Unfortunately, a lot of wealthy donors make the mistake of waiting until they die before they make big donations to their favorite charity."
Barry Bondroff, a CPA and managing partner of the Baltimore accounting firm Grabush, Newman, & Co., stresses the importance of the study's findings. "Until I reviewed Dr. Silk's analysis of the economics of lifetime giving, I never fully realized how much value can be created with a carefully planned program of private foundation funding. Depending on the circumstances, creators of foundations can use good tax planning to double or more the amount their foundations have, and still leave more for their children."
You don't have to be a Rockefeller or Ford to have a private foundation. Anyone can have one "there is no minimum requirement, but typically the smallest foundations are in the $200,000 range, according to Dr. Silk. He says the tax advantages are there no matter how small the foundation, but adds that "for wealthier individuals who can give more, private foundations are particularly desirable because we're talking about much bigger amounts of money, which translates into bigger tax advantages."
Perhaps the biggest winners to emerge from this study are the donor's heirs and the charities themselves. "Private foundations and the charities they support play a vital role in the community, and this study shows how donors can give more to the charity of their choice, yet still have more for their families. I'm very proud of that," says Dr. Silk.
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