Creating Impact: A Cleveland Foundation Resource for Professional Advisors We hope this issue of Creating Impact finds you well and enjoying the start of a healthy, prosperous and productive new year.
In our last e-newsletter, we shared positive news about the state of charitable giving in our community. In this issue, we highlight recent data that suggests donors plan to remain generous throughout 2021, including through the use of donor-advised funds (DAFs).
New to Creating Impact is our Professional Advisor Spotlight. Today, we feature Justin Horton of Stratos Wealth Partners. Read more below about how Horton worked with the Cleveland Foundation on a charitable strategy for a client.
For more information about any topic in this e-newsletter, or to learn more about how we can help you and your clients, please contact a member of our Gift Planning Team today. |
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Professional Advisor Spotlight |
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What was your client’s unique situation?
My client was very familiar with various charitable giving vehicles, such as donor-advised funds (DAFs) and charitable remainder uni-trusts, and had a DAF at another charitable foundation. Unfortunately, they weren’t receiving the level of service that they expected for their particular giving strategy. Because of my familiarity with the Cleveland Foundation, I suggested we explore the option of moving the funds. After meeting with the foundation team and analyzing the cost savings for the transition, the client decided to move their assets. Almost as important as the service and cost aspect of the relationship, my client wanted to work with an organization that understood the giving landscape in Northeast Ohio because nearly all of my client's contributions have been to local organizations. They have been with the foundation for more than a year and have been extremely pleased with their new relationship.
Which charitable giving strategy helped meet your client's needs?
A donor-advised fund
What were the benefits of partnering with the Cleveland Foundation, and what was the outcome?
The client has enjoyed feeling more connected with the philanthropic community and appreciates having a dedicated contact to speak with at the foundation. Foundation personnel have served as a sounding board for gifts and provided due diligence on organizations my client was interested in but perhaps wasn't very familiar with.
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Signs of hope: Charitable giving recap & outlook
At the Cleveland Foundation, we are grateful to our donors who generously supported community-wide efforts in 2020, ranging from the Greater Cleveland COVID-19 Rapid Response Fund to the newly created Cleveland Black Futures Fund. Distributions from donor-advised funds (DAFs) held at the Cleveland Foundation served as popular vehicles through which donors supported these efforts along with their favorite charities, with an uptick seen in both dollars distributed and number of grants. In fact, the Cleveland Foundation’s grantmaking of $130 million in 2020, which includes distributions from DAFs, represents a more than 14% increase in grantmaking compared to our grantmaking total of $114 million in 2019.
Our local data was also borne out nationally. The National Philanthropic Trust provided a first look at 2020 giving with its “Donor-Advised Fund COVID Grantmaking Survey” of thirteen DAF sponsors, including national charities and community foundations. This survey found that in the first half of 2020, DAF donors continued to support their favorite causes while making additional gifts to urgent needs created by the pandemic. Grants to all charitable sectors, except the arts, increased during the first half of 2020 by 29.8% compared to the same period in 2019. The number of grants also increased dramatically in the first half of 2020, a 37.4% increase over 2019. The human services charitable sector experienced the highest growth in both dollars and number of grants received.
While 2020 was an extraordinarily volatile year, and recognizing that unforeseen circumstances and events could further shift the charitable landscape, the Lilly Family School of Philanthropy recently found that current economic indicators suggest the United States will experience “broad philanthropic growth” over the next couple of years. Its projections include an increase of 4.1% in total giving in 2021 and 5.7% in 2022. Individuals and households are expected to increase their giving by 6% in 2021 and by 3.9% in 2022.
Though we are living through challenging times, this early data offers signs of hope that people will remain committed to increasing their support for their favorite charities and other organizations that are responding to critical, current needs.
To learn more about helping your clients meet their charitable goals, please contact a member of our Gift Planning Team. |
Donor-advised funds remain a popular, flexible giving tool
The National Philanthropic Trust also just released its 2020 Donor-Advised Fund Report summarizing publicly reported data available through the end of 2019 from more than 900 charitable organizations that sponsor DAFs, including national charities, community foundations and other sponsoring charities. Some highlights:
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Grants from DAFs to qualified charities have grown twice as fast as contributions to DAFs, and DAF grants have increased more than 90% over the last four years, with more than $25 billion granted in 2019.
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The grant payout rate from DAFs was 22.4% in 2019 (up from 21.2% in 2018), nearly four times higher than the payout rate for private foundations.
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Over the past ten years (through 2019), the number of DAF accounts grew almost 300%.
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Some reasons for the dramatic growth in the number of DAFs include the emergence of workplace giving, ease of management and flexibility.
Regarding DAFs at the Cleveland Foundation:
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Last year, donors directed distributions of nearly $31 million from DAFs and supporting organizations of the Cleveland Foundation.
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The Cleveland Foundation frequently works with donors to convert private foundations to DAFs, often as families update and streamline their charitable plans. Compare DAFs and private foundations on our website.
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Distributions from DAFs held at the Cleveland Foundation can be made to any 501(c)(3) nonprofit organization in the United States.
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Your clients may be interested in a DAF at the Cleveland Foundation if they want to:
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Simplify their charitable plan by “winding down” a private foundation or creating a DAF in lieu of a private foundation
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Contribute complex assets (including business interests) to maximize tax savings
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Support local charities while also recommending grants to qualified charitable organizations located in other states, perhaps where their children and grandchildren reside
To learn more about helping your client set up a DAF at the Cleveland Foundation, please contact a member of our Gift Planning Team. |
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You're invited! Join us for our virtual Professional Advisor appreciation event
Please join us at our virtual Professional Advisor appreciation event to hear from Ronn Richard, Cleveland Foundation president and CEO, and engage in an interactive breakout session to learn more about the foundation’s initiatives in our community.
March 3 from 12:30-1:30 p.m. |
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Virtual "lunch" & learn: Philanthropic strategies built for your clients
Join us for an interactive conversation about charitable giving trends, options and opportunities and what it means to have a strategic partnership with the Cleveland Foundation. This session is open to financial planners, attorneys, accountants, insurance agents and other professionals interested in learning how collaborating with the foundation can add value to their practice and for their clients.
March 25 from noon-1 p.m. |
Cleveland Documenters helps hold local government accountable
The decisions being made by city and county officials are more important than ever, but the vast majority of meetings where these decisions are made receive no media coverage and produce minimal records. Cleveland Documenters is a one-year pilot program to recruit, train and pay Greater Clevelanders to document official meetings of the Cuyahoga County and City of Cleveland governments in an effort to promote accountability and transparency and to expand the toolbox for residents to take action in their communities. |
Promoting racial equity through financial operations and structures
The Cleveland Foundation upholds a longstanding commitment to racial equity engrained in our grantmaking and community engagement initiatives and heightened by the recent national reckoning on systemic racism. As an urgent and timely extension of this work, including the 2020 launch of the Cleveland Black Futures Fund, our board and staff are taking a close look at internal structures that can be used as instruments to further promote racial equity. We’re proud to report on three fall 2020 developments, including the launch of a Racial Equity Investment Pool, establishment of a Police Brutality Bond exclusion and adoption of an official Anti-Hate Group policy regarding grants from donor-advised funds. |
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Lillian Kuri promoted to Cleveland Foundation executive vice president and chief operating officerA 14-year veteran of the foundation, Kuri will oversee the day-to-day headquarters operations and the development of a new strategic plan, which will include placekeeping and placemaking strategies designed in partnership with the community as part of the foundation’s upcoming move to the intersection of the MidTown and Hough neighborhoods. |
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Greater Cleveland Partnership (GCP) names Baiju R. Shah as its next president and CEOShah comes to GCP from his current position as the Steven A. Minter Senior Fellow for Innovation at the Cleveland Foundation, where he develops and works on strategic initiatives and partnerships designed to advance Cleveland’s innovation economy. |
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Contact our Gift Planning Team |
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