Community Foundation of Greater Lakeland

CFGL To Hold CPE Seminar

2008-04-15T19:29:56Z

The Community Foundation of Greater Lakeland will be holding a multiple topic, 8 hour A&A Seminar for CPE credit for area accountants. The event will be held Thursday, June 12 at the United Way of Central Florida's Board Room, located at 5605 US Highway 98 S, Highland City, FL 33846. Registration will begin at 7:30 a.m. and the event will end at 3:30 pm.

Cost is $150 for registrants before May 30, and $175 after May 30.

More information will be coming soon. For questions, call the CFGL office at 863/683-3101.

To register, click here.

This event is sponsored by:
Crowe Chizek and Company LLC
Clark, Campbell and Mawhinney P.A.

CFGL to Hold 2007 Grant Orientation

2007-06-11T14:34:03Z

Becky Murphy http://cfgl.org/

CFGL Celebrates Anniversary with a Bang!

2007-05-23T20:40:37Z

Becky Murphy http://cfgl.org/

Record Growth

2007-05-23T20:40:37Z

COMMUNITY FOUNDATION GRANTS $12.5 MILLION TO MORE THAN 300 NON-PROFITS ORGANIZATIONS LAST YEAR!

LAKELAND (May 1, 2007) �?? Last year the Community Foundation of Greater Lakeland (CFGL) granted over $12.5 million (up from $8 million in 2005) to more than 300 non-profit organizations in the Lakeland community, making the foundation the area�??s largest philanthropic giver. Since the inception of the CFGL in 1997, over $55 million has been granted to the community. Currently the foundation manages over $50 million in assets through approximately 130 funds.

�??We are all very lucky to live in a city where philanthropy is such a big part of the community,�?? said Kimberly Brock, President and CEO of the Community Foundation of Greater Lakeland. �??Not only do we have a lot of generous people in the Lakeland area, but we have plenty of individuals who dedicate their lives to various programs and organizations that make the Lakeland community so special and unique. Everyone here does their part, and everyone can be proud of the community we live in.�??

One of the reasons the CFGL has been so successful in granting dollars into the community is its unique ability to provide donors and/or community philanthropists the opportunity to fund specific programs or personal areas of interest. The CFGL distributes a �??grab bag�?? brochure once a year, in September, which outlines more than 100 new or current programs that need funding in order to be able to continue the following year. Each of these programs makes a significant impact on the community, and would never have been available if not for this vehicle provided by the CFGL.

In addition to the dollars granted out by the CFGL, record growth was also experienced in the CFGL�??s investments. The total assets held by the foundation increased by $8.8 million in 2006, and the CFGL boasted investment gains of approximately $3.3 million while exceeding the return objective of 8.5% by nearly $900,000 (2006 investment return was 10.31%).

The CFGL�??s donors support a variety of causes, from churches and schools to homeless shelters, from cancer research to sending underprivileged children to camp. The CFGL�??s donors are serious about their philanthropy and bettering the community, and the CFGL is serious about making philanthropy as simple and effective as possible. Donors become involved in the Community Foundation of Greater Lakeland because they want to make their charitable giving as easy as possible, while maintaining a personal touch, and the CFGL has the means to support even the most complicated giving. The CFGL handles all of the administrative work, allowing donors to reap the rewards of charitable giving without all of the hassles that come with it.

This year marks the tenth anniversary of the Community Foundation of Greater Lakeland and we look forward to many more years of tremendous growth, resulting in a stronger community for all. The CFGL was established in 1997 by a group of Lakeland residents, led by Jack Grady. The mission of the Community Foundation is to improve the quality of life by providing a vehicle that promotes philanthropy.

Second Annual Legacy Event to Honor George Harris

2007-01-23T17:06:57Z

The Community Foundation of Greater Lakeland will be holding our Second Annual Legacy Event honoring George W. Harris, Jr. on Wednesday, February 21 at the Polk Theatre. The event will begin with a reception at 6 p.m., followed by a program honoring the life and legacy of Mr. Harris at 7 p.m. Please join us as we celebrate the life of one of the CFGL's founding board members! The event is free to the public.

Contribution to History

2006-07-17T20:33:32Z

Investor's mega-pledge signals new era for philanthropy

By Ian Wilhelm

When the billionaire investor Warren Buffett announced his plans to donate 85 percent of his vast fortune to charity, the nonprofit world reacted with near euphoria. But almost before the ink could dry on the deal, the applause faded and questions arose.

In an unprecedented move, Mr. Buffett, chairman of Berkshire Hathaway, an Omaha, Neb., insurance and investment company, earmarked $37-billion for five charitable funds, the philanthropies established by him and his late wife, their three children, and his friends Bill and Melinda Gates.

Mr. Buffett's commitment is the largest in philanthropic history, greatly exceeding the sums given by Andrew Carnegie or John D. Rockefeller, and could trigger a windfall for charities as other wealthy individuals are inspired by his example to donate their money.

The bulk of Mr. Buffett's pledge, approximately $31-billion, will go to the Bill & Melinda Gates Foundation, in Seattle. Already the world's largest foundation with more than $29-billion in assets, Gates will essentially swell to a $60-billion philanthropic behemoth, worth almost as much as the eight other richest grant makers in the United States combined. Indeed, if the Gates Foundation were a country, its assets would make it the 55th-largest economy in the world, larger than the gross domestic product of oil-rich Kuwait.

An Unprecedented Gift
The Buffett gift presents the Gates Foundation with an incredible opportunity to fight the social ills it focuses on, which include global health and failing U.S. schools, but also ushers in what some observers described as a new age of mega-philanthropy with wealth and influence heretofore unseen.

"To manage a $60-billion foundation has never been tried," said Joel J. Orosz, distinguished professor of philanthropic studies at the Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University, in Grand Rapids, Mich. "That's where the devil in the details is going to be. We've never had a foundation of this size and now, of course, influence."

Specifically, Mr. Orosz and other nonprofit leaders are concerned about how public the foundation will be about its grant-making process, the capability of the charities it traditionally supports to absorb billions of dollars, and the potential for increased government scrutiny of foundations brought on by the emergence of such a prominent organization.

But the primary worry is one of leadership. With only three trustees �?? the Gateses and Mr. Buffett, who agreed to join the fund after he made his gift �?? how well can the largest foundation in history make decisions that affect millions of lives worldwide?

"If there is a downside to Mr. Buffet's gift, it's that this is such a vast sum to entrust to the decisions of three people �?? any three people," said Elizabeth T. Boris, director of the Urban Institute's Center on Nonprofits and Philanthropy, in Washington. "The questions of accountability that arise for all foundations purporting to know and serve the public good are bound to intensify for a foundation of this size, no matter how well-intending and effective."

Lack of Ego
To be sure, Mr. Buffett's move prompted more praise than boos. Nonprofit leaders said that by giving to existing foundations �?? Gates, the Susan Thompson Buffett Foundation, the Howard G. Buffett Foundation, the Susan A. Buffett Foundation, and the NoVo Foundation, which is overseen by Mr. Buffett's son Peter �?? showed that Mr. Buffett is motivated more by society's needs than his ego.

Of course, some nonprofit groups, such as arts and culture organizations, said they applaud Mr. Buffett's philanthropy, but are disappointed about being left out of the biggest donation in history.

Said Robert L. Lynch, president of the Americans for the Arts, in Washington: "Would I have loved the whole gift to go to the arts? One part of me says that would be fabulous, the arts themselves need a lot more help than what they are getting."

Yet the Buffett gift may still prove helpful to groups not supported by Gates and the other foundations because it is likely to spur other giving.

"I think it's inevitable it will be noticed by lots of people," said David Rockefeller, a philanthropist and retired chairman of Chase Manhattan Bank, in New York. "There are lots of people who have made a lot of money, and I think it will give them a second thought before they spend it on something less worthwhile."

Indeed, the actor Jackie Chan announced last month that he will bequeath half his wealth to help Asian youth, a move prompted in part by Mr. Buffett.

The Buffett contribution may also be a valuable fund-raising tool, said Teresa Alvarado, executive director of the Hispanic Foundation of Silicon Valley, in San Jose, Calif. She said she will point to Mr. Buffett's giving to persuade people to support her group. "This gift is so generous and so remarkable I think I will use it as an example," she said.
However, the nature of Mr. Buffett's gift �?? giving to foundations established by other people �?? is unlikely to catch on, said Daniel Kurtz, a former charity regulator in New York. "It would be great if people said, 'Listen, I don't need my own foundation, why don't we pool our resources into a slightly larger one,'" he said. "But it's unlikely to happen."

Diane Feeney, president of the French American Charitable Trust, in San Francisco, said Mr. Buffett may not change how people give, but it may change when they give. It could prompt more wealthy people to give while they are alive, she said. Ms. Feeney is the daughter of Charles Feeney, the reclusive billionaire who has given much of his fortune to charity.

"People should really think about having an impact in the short term rather than never having an end to their philanthropic goals and staying around forever and ever and ever. This is a really good model for other people out there," she said.

Mr. Buffett had previously said he would give away his fortune once he died. He explained in an interview with Fortune magazine, however, that his view began to change when his wife, Susan, died two years ago. He said he had assumed she would outlive him and decide how to give away their money.

Annual Gifts
Gates and the other funds will not receive all of Mr. Buffett's gift at once. For example, Mr. Buffett has earmarked 10 million shares of Berkshire Hathaway stock for the Gates Foundation. He will give away 5 percent of those shares to the foundation in 2006, and 5 percent of the remaining balance each year until his death. He said he expects the value of the stock to grow, so the ultimate dollar size of the donation may increase in the future.
The gift requires that Gates spend the full amount of the gift each year, in addition to the roughly 5 percent of assets the foundation otherwise would give annually. The move essentially doubles the foundation's annual grant making to about $3-billion.

Gates has until 2009 to begin meeting that requirement, and the philanthropy said it probably will double its current staff size of 275 people in the years ahead in part as a result of the new money.

Big Changes
Mr. Buffett's announcement comes as the foundation was already undergoing major changes.
Last month, Mr. Gates announced that by 2008 he will stop his day-to-day responsibilities at the Microsoft Corporation, the software company he co-founded, and assume a full-time role with the foundation (The Chronicle, June 29). He has said the move was unrelated to Mr. Buffett's commitment of extra money to the foundation.
In addition in April the fund said it would be expanding the number of causes it supports to include agricultural projects and financial services for the poor.

Despite the new infusion of money, the foundation will continue "to go deeper into our current strategies, accelerating the work we are already supporting," said Patty Stonesifer, the foundation's chief executive, in an e-mail message sent to Gates grant recipients after Mr. Buffett announced his donation.

Obviously, Gates beneficiaries see the Buffett gift potentially as a great boon to their work. On the day the contribution was disclosed, the foundation received 2,000 grant proposals compared with the 300 it usually gets in a day.

"The reaction that we had is similar to a lot of nonprofits that haven't got a lot of funding from Gates yet. We said, 'Wow, hopefully this will mean that there'll be more funding to support the kind of work we're doing,'" said Janine Schooley, vice president of technical services and program development at Project Concern International, in San Diego.

The charity received $10,000 from Gates for an AIDS walk in India, but also has been rejected for other projects.
She said Project Concern will "repackage" its grant applications to Gates to emphasize what makes it innovative in the hopes that doing so will make the group more attractive. "We need a Gates strategy," she said.

Accountability Challenges
But while fund raisers may be salivating at Mr. Buffett's highly publicized donation, some people wonder if the foundation can double its annual spending and still provide the oversight that is required.

"That's been a challenge for the Gates Foundation and this doubles that challenge. That's a real significant issue for the organization," said Richard D. Klausner, the fund's former director of global-health programs.

Historically Gates has provided big grants to well-established nonprofit groups that often redistribute the money to smaller charities.

Chester E. Finn Jr., president of the Thomas B. Fordham Foundation, in Washington, which has received a grant from the Gates Foundation to support charter schools in Ohio, questions whether school-improvement efforts are prepared for the new influx of money.

"Given the way Gates operates in education, the wisdom and capacity of these intermediaries to absorb and intelligently deploy twice as much money is a fair question," Mr. Finn said.

The hunger for Gates grants may also reduce how much honest feedback the philanthropy receives, said David Bergholz, former president of the George Gund Foundation, in Cleveland, and a critic of the Gates efforts to improve public education.

"When you muck about with hundreds of millions of dollars, let alone billions, people will chase after you whether you know what you're talking about or not," he said. Charities are unlikely to tell Gates, "Hey, guys, you're headed down a road to ruin," he said.

In her e-mail message to grant recipients, Ms. Stonesifer of the Gates fund made a special plea as if anticipating that type of criticism. "As we grow, truth-tellers will become ever more important to us. So please: Let us know when things are going well, and even more importantly, when they aren't," she wrote.

Monica Harrington, a senior policy officer at the foundation, told The Chronicle that the organization will also "formalize its advisory process" to allow for more outside experts in education, health, and other areas to influence what Gates does.

But at the highest level of the foundation's governance, with its three trustees, observers wonder how well these voices and others will be heard and their ideas acted upon.

"It has operated with an exceedingly small board. It has got to make that bigger. The stakeholders need to have a say," said Mr. Orosz of Grand Valley State University.

In light of its work on HIV/AIDS in Africa, for example, Ms. Feeney of the French American Charitable Trust said the foundation should include Africans as board members. The fund needs people "from the continent that is suffering the most from AIDS, people who are living these issues and can talk to [the Gateses and Mr. Buffett] and open up some of the thinking," she said.

While the governance structure of the foundation has raised questions, Mr. Kurtz, the former charity regulator, said it breaks no laws.

"Frankly, it was their money," he said about the Gateses and Mr. Buffett. "Who is going to know better what they want to do with it?"

But while government regulators do not see legal problems at Gates, its sheer size and the flurry of news reports about it may trigger increased scrutiny of the foundation world by public officials.

"It's made members appreciate that this is big money we're talking about," said a senior aide to Sen. Charles E. Grassley, the Iowa Republican who is investigating the policies and practices of grant makers. "There are very, very significant tax benefits going on and it isn't just an abstract exercise to say that we need to make sure these entities are performing in a manner that's in keeping with the great tax benefits they received."

Government's Role
Another concern is that members of Congress and other world leaders may see the wealth at the Gates Foundation as a reason to cut government spending for education and health, believing that private donors have enough resources to cure societal problems.

Nicolas de Torrente, executive director of the U.S. arm of Doctors Without Borders, in New York, said he is happy the Buffett-Gates partnership will channel more money and attention to global public health.

But he said he worries that the growing involvement of philanthropy in this area will lessen the incentive for governments to step up to the plate. "The danger is really letting governments off the hook in the agenda-setting and the funding," he said.

To some extent, this may already be happening.

The London School of Economics and Political Science found last year that governments were spending a small percentage on partnerships with nonprofit groups to develop new drugs and vaccines for malaria and other diseases, Mr. de Torrente said. The school's study discovered that only 16 percent of the money for such efforts came from governments, compared with 59 percent from the Gates Foundation.

The Gateses and the foundation have stressed they do not want their money to replace government dollars. Ms. Stonesifer said the foundation will continue to work with nations and companies to make sure more resources, not less, are available for the world's problems.

"As large as our annual grant making will become, it will always be dwarfed by the money governments and markets can bring to the table. They will continue to be the key to solving these problems, and we will partner with them rather than replace them," she wrote in her e-mail message.

Yet can the foundation toe this line with all its newfound wealth?

William H. Foege, a former director of the federal Centers for Disease Control and Prevention who helped establish the Gates fund's health programs, said the organization's leaders understand the myriad concerns being expressed. But he added, at $60-billion, the philanthropy truly has become an unprecedented entity on the world stage, and therefore faces unprecedented challenges.

"Power really does corrupt," he said. "The challenge will be to not let the power corrupt the foundation. Bill and Melinda need to be as humble giving away the money as Mr. Buffett was in donating it."
Suzanne Perry contributed to this article.
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Copyright © 2006 The Chronicle of Philanthropy

Yes, You Can Start your Own Charitable Legacy!

2006-07-17T20:33:32Z

Bill Gates and Warren Buffet could probably find more money in their couch cushions than many of us make in a year. But their enormous charitable contributions have inspired us all. Wouldn�??t it be nice to leave a legacy of your own?

But starting a foundation of your own takes time and money, and many of us can�??t make that kind of commitment. Fortunately, there is another option to starting your own charitable fund �?? the Community Foundation of Greater Lakeland.

Warren Buffett�??s amazing pledge of $31 billion to the Bill and Melinda Gates Foundation earns him a place among our country�??s most generous philanthropists like Carnegie and Rockefeller. The Community Foundation of Greater Lakeland makes it much easier for you, and you don�??t have to be a multimillionaire or a billionaire to experience the joys of giving back to your community.

The Community Foundation of Greater Lakeland is a non-profit organization equipped to facilitate charitable giving for local philanthropists. We are blessed to live in a community where our residents understand the importance of giving back, and we facilitate funds for donors ranging from a few thousand dollars all the way up to several millions of dollars.

Many people reach a point in their lives, much like Mr. Buffet, when they feel inclined to give back. They do so for a number of reasons, all very personal to them. What motivates you? Perhaps you feel strongly about a particular cause, or there is an organization that has touched your life in some way. Maybe you want to create a legacy and set an example that inspires those around you.

For as many motivations as there are to give, there are ways to give. The key to having a rewarding giving experience is finding the best fit �?? for your charitable needs, your financial goals and personal preferences.

Warren Buffet recently said, �??What can be more logical, in whatever you want done, than to find someone better equipped than you are to do it?�?? Buffet is using the Gates Foundation to in essence do what community foundations across America are doing for donors everyday �?? getting help from an organization that has expertise in the nuances of donating money effectively and efficiently. The Gates Foundation�??s focus is the world, ours is simply the Lakeland community. Just as the Gates Foundation is helping Mr. Buffet put �??money where it really matters,�?? we can help local businesses and community members do the same.

Our experienced staff continually seeks out emerging needs and opportunities and target dollars for the greatest impact. At the same time, we partner with families, individuals, and corporations to provide secure, efficient and highly personal ways to accomplish charitable goals.

Since our inception in 1997, the CFGL has granted over $39 million to the Lakeland community. In 2005 alone, over $7 million was granted out.

We make charitable giving easy for our donors by offering a variety of fund options. If you�??re ready to create a lasting legacy, contact the Community Foundation of Greater Lakeland today, 607-9800, or visit our website for more information, www.cfgl.org.

The Community Foundation of Greater Lakeland. For good. For ever.

Estate Tax Bill Could Hurt Charities

2006-06-29T20:33:32Z

By FLOYD NORRIS
If the estate tax bill approved last week by the House becomes law, it will benefit wealthy families and cost the government a lot of tax revenue. But there are likely to be other winners and losers as well. Charities may find it harder to get donations and some heirs may have to wait years or even decades longer to collect inheritances, while surviving wives or husbands receive larger inheritances.

States that impose estate taxes will face new pressures to repeal them, because the federal government will no longer reduce its estate tax bill for those who owe state estate tax.

The bill faces an uncertain fate in the Senate, where a move to cut off debate on a bill to repeal estate taxes fell just three votes short. House leaders, who had wanted a complete repeal, pushed through the bill that was approved in the hope that it would pick up additional Senate votes.

Under current law, a person who dies in 2006 can leave up to $2 million to heirs without incurring estate tax. In addition, unlimited amounts can be left to a surviving spouse and to charities without incurring tax.

Advisers to wealthy people often tell them to leave the maximum exemption amount to heirs, with the remainder going to the surviving spouse. When that spouse dies, another $2 million can be left to heirs tax-free. If the first spouse to die leaves everything to the surviving spouse, then only a total of $2 million can be passed on to heirs tax-free.

Under the House bill, the exemption rises to $5 million, and is indexed to inflation in later years. But the important change for heirs is that the spousal provision becomes portable. If the first spouse to die leaves everything to the survivor, that person will have a $10 million exemption upon his or her death.

The practical effect of that could be to delay bequests to children, said Evelyn Capassakis, a tax expert at PricewaterhouseCoopers. Rather than get some money when one parent dies, and the rest when the other dies, they might have to wait until both are dead.

Charities now get billions of dollars in bequests from estates each year. How much of that money flows from generosity, and how much from a desire to reduce taxes, is impossible to know. But in 2004, 47 percent of estates of more than $10 million that were required to pay taxes had at least some charitable contributions, in contrast to just 22 percent of such estates that escaped taxation.

With higher exemptions, it seems likely that the level of donations from estates could fall sharply. For those with no estate tax liability, tax advisers would be likely to recommend that any giving be done before death, when there would be a deduction that could reduce income taxes.

One aspect of the current law that would be preserved by the House bill is a step-up in basis for capital assets. Under current law, when a person leaves assets to an heir, the heir's tax basis is the worth of the asset when the person died, regardless of what was paid for it. The step-up in basis is important because it means that any actual pre-inheritance appreciation is not subject to capital gains tax. That would continue.

But under current law there is also one year, 2010, in which there will be no estate tax, before it returns the following year. (That provision was needed to make the numbers work when the tax laws were changed in 2001.) In 2010, only $1.3 million in assets can be eligible for a stepped-up basis. Other assets would pass to heirs tax-free, but would retain the original cost basis.

Thus, if an entrepreneur died in 2010 with stock in a family business worth $10.3 million that had cost only $10,000 when the company was started 30 years earlier, there would be no estate tax, but the heirs would owe capital gains tax on virtually the entire proceeds above $1.3 million if they sold the stock. Those heirs would be far better off with the House bill than with the complete repeal.

Assets that have gained in value but are not sold before death now escape the capital gains tax entirely. Since the House bill calls for an estate tax rate equal to the capital gains rate on estates from $5 million to $25 million, in effect many taxable estates would be simply paying the taxes that would have been owed had assets been sold before death. Estates over $25 million would face a tax rate of double the capital gains rate on the excess amount.

The tax rate on long-term capital gains is now 15 percent. If it were to rise, the estate tax rate would also increase.

Until 2001, the federal estate tax law allowed a credit for state estate taxes paid, up to certain limits. Most states imposed the maximum allowed, which had no effect on taxpayers because it merely redirected money from the federal government to the states.

Since 2001, however, the law has allowed only a deduction, rather than a credit, for state estate taxes. So an estate that owed $1 million in state estate taxes could reduce the amount of estate subject to federal taxation by that amount. Since the maximum federal estate tax was 46 percent, that meant that at most that would save the taxpayer $460,000 in federal estate taxes.

But under the House bill, there will be no credit or deduction for state estate taxes, meaning that there will be no savings. That will increase the incentive for the wealthy to move to states without state estate taxes, like Florida, and it will also put pressure on state governments to reduce or eliminate their taxes.

Big foundation, many questions

2006-06-28T20:33:32Z

By Andrew Cassel
Inquirer Columnist

If I had been asked to guess what the world's second-richest man would eventually do with his money, I don't think giving it to the world's richest man would have come to mind.

But that's why he's Warren Buffett, and I'm not.

As you've heard, Buffett has decided to hand the bulk of his fortune - more than $30 billion worth of Berkshire Hathaway stock - to the Bill and Melinda Gates Foundation.

The Gates Foundation, already the largest organization of its kind by far, will roughly double in size, as will the $1.5 billion or so it currently spends annually on projects to improve health and education around the world.

The news follows close on the heels of Bill Gates' announcement that he'll soon be sliding out of the cockpit at Microsoft in order to tackle problems such as HIV, malaria, and underperforming American high schools.

In two fell swoops, then, we have arguably the most successful figures in American business combining to launch the largest private philanthropic enterprise ever seen. There's a lot there to chew on.

Start by noting how true to form both of the principal figures have been. Gates, the competitive, tech-oriented problem-solver, set up his foundation in ways that mirror Microsoft itself: focused, methodical, determined to achieve measurable results.

Not from scratch

And Buffett is approaching this just as he does his other investments. Rather than build an enterprise from scratch, he is backing managers he thinks are capable and understand the business.

The Omaha sage also is being clever about incentives and accountability, donating 5 percent of his gift each year with the continuing condition that it be spent effectively. This has the double purpose of helping the foundation stay on task and muting the impact of the gift on Berkshire Hathaway stock, which might suffer if the Gates Foundation liquidated large blocks quickly.

Beyond that, however, the Gates-Buffett story underscores the phenomenal growth of philanthropic foundations as an economic as well as political and cultural force in America.

According to the Foundation Center, a New York organization that monitors nonprofit groups, about 68,000 U.S. foundations gave away more than $33 billion last year - more than twice as much as in 1995, even after inflation.

Foundation assets, which tumbled with the stock market in 2001, rebounded to a record, exceeding $510 billion last year. That will surely multiply as Gates' and Buffett's entrepreneurial peers distribute their own enormous wealth.

As those new foundations build on the models created by the Fords, Rockefellers, Pews and others, the nonprofit sector they fund can only grow as well.

Lots of clout

Nonprofit groups already pay more than 8 percent of all the salaries received by Americans. In many communities - Philadelphia being a notable example - the sector rivals or exceeds private industry in its political and economic clout.

Look at the boards of city-booster organizations such as the Chamber of Commerce. Increasingly, leaders of schools, hospitals, foundations and other nonprofit groups have replaced corporate executives. Read it as good or bad, but it's a fact.

It's also a uniquely American fact. According to Princeton lecturer Stanley Katz, only pale imitations of our nonprofit sector exist around the world. "Our tax laws have always favored the creation of individual wealth," Katz told me. "We don't tax it away," so much of it ends up in foundations or other charities.

But the larger the sector grows, the tougher and more pressing the questions it has to face.

Are nonprofit groups efficient or do they waste mountains of money on overhead? Do they meet their goals or simply build monuments to their founders? Do they serve society's unmet needs or merely crowd out the public and commercial sectors?

As Gates and Buffett join their fortunes into a new nonprofit colossus, they'll surely have to address these issues.

We can only hope the model they create will provide some answers as well.

Warren Buffett Gives Away His Fortune

2006-06-26T20:22:12Z

Warren Buffett gives away his fortune

FORTUNE EXCLUSIVE: The world's second richest man - who's now worth $44 billion - tells editor-at-large Carol Loomis he will start giving away 85% of his wealth in July - most of it to the Bill & Melinda Gates Foundation.
By Carol J. Loomis, FORTUNE editor-at-large
June 25, 2006: 1:42 PM EDT
NEW YORK (FORTUNE Magazine) - We were sitting in a Manhattan living room on a spring afternoon, and Warren Buffett had a Cherry Coke in his hand as usual. But this unremarkable scene was about to take a surprising turn.

"Brace yourself," Buffett warned with a grin. He then described a momentous change in his thinking. Within months, he said, he would begin to give away his Berkshire Hathaway fortune, then and now worth well over $40 billion.

This news was indeed stunning. Buffett, 75, has for decades said his wealth would go to philanthropy but has just as steadily indicated the handoff would be made at his death. Now he was revising the timetable.

"I know what I want to do," he said, "and it makes sense to get going." On that spring day his plan was uncertain in some of its details; today it is essentially complete. And it is typical Buffett: rational, original, breaking the mold of how extremely rich people donate money.

Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world's largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett's (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).

The Gateses credit Buffett, says Bill, with having "inspired" their thinking about giving money back to society. Their foundation's activities, internationally famous, are focused on world health -- fighting such diseases as malaria, HIV/AIDS, and tuberculosis -- and on improving U.S. libraries and high schools.

Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are "thrilled" by that and by knowing that Buffett's money will allow the foundation to "both deepen and accelerate" its work. "The generosity and trust Warren has shown," Gates adds, "is incredible." Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares - starting with 602,500 in 2006 and then decreasing by 5% per year - to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair -- Bill, now 50, or Melinda, 41 -- is active in it.

Berkshire's price on the date of each gift will determine its dollar value. Were B shares, for example, to be $3,071 in July - that was their close on June 23 - Buffett's 2006 gift to the foundation, 500,000 shares, would be worth about $1.5 billion. With so much new money to handle, the foundation will be given two years to resize its operations. But it will then be required by the terms of Buffett's gift to annually spend the dollar amount of his contributions as well as those it is already making from its existing assets. At the moment, $1.5 billion would roughly double the foundation's yearly benefactions. But the $1.5 billion has little relevance to the value of Buffett's future gifts, since their amount will depend on the price of Berkshire's stock when they are made. If the stock rises yearly, on average, by even a modest amount - say, 6% - the gain will more than offset the annual 5% decline in the number of shares given. Under those circumstances, the value of Buffett's contributions will rise.

Buffett himself thinks that will happen. Or to state that proposition more directly: He believes the price of Berkshire, and with it the dollar size of the contributions, will trend upward - perhaps over time increasing substantially. The other foundation gifts that Buffett is making will also occur annually and start in July. At Berkshire's current price, the combined 2006 total of these gifts will be $315 million. The contributions will go to foundations headed by Buffett's three children, Susan, Howard, and Peter, and to the Susan Thompson Buffett Foundation.

This last foundation was for 40 years known simply as the Buffett Foundation and was recently renamed in honor of Buffett's late wife, Susie, who died in 2004, at 72, after a stroke. Her will bestows about $2.5 billion on the foundation, to which her husband's gifts will be added. The foundation has mainly focused on reproductive health, family planning, and pro-choice causes, and on preventing the spread of nuclear weapons. Counting the gifts to all five foundations, Buffett will gradually but sharply reduce his holdings of Berkshire (Charts) stock. He now owns close to 31% of the company-worth nearly $44 billion in late June - and that proportion will ultimately be cut to around 5%. Sticking to his long-term intentions, Buffett says the residual 5%, worth about $6.8 billion today, will in time go for philanthropy also, perhaps in his lifetime and, if not, at his death.

Because the value of Buffett's gifts are tied to a future, unknowable price of Berkshire, there is no way to put a total dollar value on them. But the number of shares earmarked to be given have a huge value today: $37 billion.

That alone would be the largest philanthropic gift in history. And if Buffett is right in thinking that Berkshire's price will trend upward, the eventual amount given could far exceed that figure.

So that's the plan. What follows is a conversation in which Buffett explains how he moved away from his original thinking and decided to begin giving now. The questioner is yours truly, FORTUNE editor-at-large Carol Loomis. I am a longtime friend of Buffett's, a Berkshire Hathaway shareholder, and a director of the Susan Thompson Buffett Foundation.

________________________

A conversation with Warren Buffett

How the giveaway will work

The global force called the Gates Foundation

Letters from Buffett on gifts of Berkshire stock

Find this article at:
http://money.cnn.com/2006/06/25/magazines/fortune/charity1.fortune/index.htm

House GOP Settles for Less Than Full Repeal of Estate Tax

2006-06-21T20:33:32Z

By Jonathan Weisman
Washington Post Staff Writer
Wednesday, June 21, 2006; A04

Republican leaders announced yesterday that the House will vote this week on estate tax legislation that falls short of full repeal, conceding defeat on a philosophical issue that has been central to the GOP economic plank for more than a decade.

The bill, introduced by House Ways and Means Committee Chairman Bill Thomas (Calif.), marks a major turnaround for congressional Republicans, who for years have made "Death to the death tax" a political battle cry.

Ending the estate tax has also been a priority for President Bush, who in 2001 won passage of legislation that gradually raises the exemption and lowers the tax rate on inheritances until the tax is eliminated in 2010. But when that legislation expires in 2011, the estate tax is scheduled to return to the level it stood at before Bush was elected.

The Senate has blocked any effort to fully repeal the estate tax. Under the House's compromise, which probably will come to a vote tomorrow, estates worth as much as $5 million -- $10 million for couples -- would be exempt from taxation indefinitely.

The tax rate on estates worth more than the exemption level up to $25 million would be set at the same tax rates that apply to capital gains -- now 15 percent but scheduled to rise to 20 percent in 2011. The rate for estates worth more than $25 million would be twice the capital gains rate. The bipartisan Joint Committee on Taxation estimated the estate tax cut would cost the government $279 billion over 10 years.

To lure Democratic senators from Washington state and Arkansas, Thomas included a lucrative tax break for the timber industry, pushing the total cost of the bill to nearly $280 billion.

Senior House Republicans conceded that a long-sought permanent repeal of the estate tax is now out of reach. And with the possibility that Republicans will lose Senate seats in the midterm elections in November, GOP tax writers decided to grab the most lucrative deal possible in case Republican power begins to ebb.

"The sales message is very simple," Thomas said. "Do you want to make a statement, or do you want to make law?"

House Speaker J. Dennis Hastert (R-Ill.) conceded, "We need to do what is reality, what you can get done with the Senate."

Senators set the scramble for compromise in motion earlier this month when they fell three votes short of cutting off debate on legislation to permanently repeal the estate tax. That convinced the groups that have lobbied the issue for decades -- small-business groups, agriculture associations and extremely affluent families -- that the time had come to settle.

Senate Majority Leader Bill Frist (R-Tenn.) took the unusual step last week of asking Thomas to intervene, hoping House passage of a generous compromise would create the momentum needed to attract 60 votes in the Senate required to cut off debate. Frist has promised a vote on a compromise next week.

But passage is anything but certain. Republicans probably have the votes in the House, but Democrats will use the debate this week to highlight what they see as a flagrant GOP tilt to the rich.

House Democrats plan to offer a minimum-wage increase -- the first since 1997 -- as the alternative to the estate tax bill.

The search for a compromise has pitted affluent small-business owners against the truly rich -- families with estates valued at tens of millions of dollars.

Thomas came down in favor of the business owners. His legislation would ensure that married couples could leave their children estates worth $10 million, untaxed. But the most wealthy families could face estate taxes as high as 40 percent. And to trim the cost of the package, Thomas repealed a provision in the tax code that allows families with large inheritances to deduct the cost of state-levied death taxes from the federal estate tax.

To the powerful families that have bankrolled the estate tax repeal movement, Thomas's compromise may be too much to swallow, suggested Frank A. Blethen, publisher of the family-owned Seattle Times newspaper and a longtime advocate of repealing the estate tax.

"If this bill is what it looks like, a 40 percent tax on larger businesses, that's not much of a deal," Blethen said. "It is a huge disappointment."

Knowing how tight the vote would be, Thomas included a narrowly tailored measure, sought by Washington state's two Democratic senators, to offer strapped timber companies a two-year tax break worth $940 million.

Spokesmen for the senators, Maria Cantwell and Patty Murray, said the legislation is still being studied.

Annual Report

2006-06-15T14:52:46Z

The CFGL is pleased to announce that our 2005 Annual Report is completed and will run in the Sunday, June 18th edition of The Ledger. Thank you to The Ledger for its generosity in publishing this important piece.

Don't forget to register for our CPE!

2006-05-10T15:45:03Z

A&A Seminar
Friday, May 19, 2006
Peggy Brown Center
215 S. Lake Avenue, Lakeland
7:30 a.m. - 3:30 p.m.

�?� Forum qualifies for 8 hours of A&A credit
(2 hours qualify for Governmental A&A)
�?� Written proof of attendance will be supplied
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Registration fee: $130 (includes breakfast and lunch)

Click here to download a registration form.

Thank you to our CPE sponsors, OMS - Outsource ManagementSolutions, LLC and The Agency Investment Services!

2006-05-10T15:45:03Z

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Many Dismissing "Donor Fatigue" as Myth

2006-04-30T19:21:54Z

April 30, 2006

By STEPHANIE STROM
After Hurricane Katrina, Congress was so concerned that donations for hurricane relief efforts would cut into other charitable giving that it passed one of the biggest temporary tax breaks in history.

The legislation, which allowed a larger deduction than usual for cash donations, cost the government billions in revenue, but in some cases spurred wealthy donors �?? including Vice President Dick Cheney and his wife �?? to accelerate their giving.

But concern about so-called donor fatigue was largely unfounded, according to a new survey by the Association of Fundraising Professionals. Some 76 percent of the 506 respondents said they had raised as much or more in 2005 than they had in 2004. And among the nearly one-fourth of those organizations that said their fund-raising had fallen below their 2005 goals, most cited stiff competition for donor dollars from other charities, rather than donor fatigue caused by last year's natural disasters.

The survey is regarded as a harbinger of the more comprehensive study of annual giving also sponsored by the association, Giving USA, which comes out in June.

"The statistics are pretty clear," said Paulette V. Maehara, the association's president and chief executive. "The impact of Katrina and the tsunami on giving last year was minimal."

More and more leaders of nonprofit groups are dismissing donor fatigue as a myth. They note that the $5 billion that was donated last year to relief efforts for Katrina and the tsunami in Indonesia amounted to less than 2 percent of the total donated to charity in 2004.

"I'm not aware of any data that support the concept," Michael Clark, president of the Nonprofit Coordinating Committee of New York, said, alluding to fears that charitable donations had fallen off.

"I just don't know what the evidence for it is," said Mr. Clark, whose group represents more than 1,400 charities in the New York metropolitan area.

Diana Aviv, president and chief executive of the Independent Sector, a trade organization representing some 550 nonprofit organizations, went even further.

"I think some of the nonprofits worrying about donor fatigue are simply crying wolf," Ms. Aviv said. "Often in the charitable sector, good news is hard for us to live with. It's easier for us to feel we're fighting many demons, including a funding demon."

In a recent survey by the Conference Board, a research company in New York, 89.4 percent of the 5,000 respondents said their donations for hurricane relief were in addition to, rather than in lieu of, the other charitable gifts they planned to make.

The tax break for charitable giving allows donors who made cash gifts from Aug. 28 through Dec. 30 to deduct an amount equal to virtually 100 percent of their annual adjusted gross income, twice the normal limit.

Mr. and Mrs. Cheney, for example, showed an adjusted gross income of $8.82 million on their 2005 income tax report, but most of the money was not taxable because they set aside $6.87 million in proceeds from stock options for charity. As a result, the Cheneys' taxable income was $1.96 million. The couple paid $2.5 million in taxes through withholding and estimated tax payments and are due a refund of about $1.9 million.

Legislators said they passed the tax break out of concern that the flood of contributions pouring into relief organizations was diverting money from charities that were not involved in the hurricane and tsunami recovery efforts, and they cited what happened to charities after Sept. 11.

A number of respondents reported a decline in fund-raising in 2002, according to the Association of Fundraising Professionals' survey for that year. But 60 percent said fund-raising had remained consistent or had improved from 2001. There has been a debate ever since over whether the charities that experienced declines did so because of donor fatigue or the economic downturn that followed the terrorist attacks.

"There might have been a little fatigue right after Katrina, like what we saw after 9/11, but in short order after both those events, giving got right back on track," Ms. Maehara, the association executive, said.

Fund-raising experts said it was unlikely that the tax break accounted for the success reported in the association's survey because many charities did not know about it in time to capitalize on it.

"That was a sideshow," said Robert F. Sharpe Jr., a fund-raising consultant.

Mr. Sharpe said higher interest rates and stock gains, which affect the older people who are the biggest donors, were the biggest factors.

Delane Butler, the vice president of marketing at the United Way of the Plains in Wichita, Kan., said his organization probably benefited from coverage of the philanthropy directed at Hurricane Katrina.

"We were seeing that it was actually raising more awareness for the needs that are out there," Mr. Butler said. He added that fund-raising was up by an average of 12 percent at 296 �?? or about a third �?? of the companies where the United Way ran workplace campaigns.

The group still saw a decline in fund-raising, but Mr. Butler said the falloff had more to do with changes in ownership and management of several large companies whose employees contribute to the organization. The Boeing Corporation, for instance, spun off part of the operations of a plant that was one of the area's biggest employers.

The organization raised $14.1 million last year, a 9.8 percent drop from 2004. "I think if it had anything to do with donor fatigue, the decreases we saw would cut across all companies and not be limited to certain groups of companies," Mr. Butler said.

Similarly, the Union Gospel Mission in Seattle saw a $300,000 budget shortfall looming in September after Hurricane Katrina hit. But the organization saw a turnaround after it mailed a special appeal to its regular donors, raising about $14 million and exceeding its goal, according to Herb Pfiffner, its executive director.

"Donor fatigue, as the press is calling it, may be a factor, but it's only one of many and not a particularly big one, I think," Mr. Pfiffner said. "A bigger factor is that everyone is trying to do more in the way of fund-raising. There is a real and significant increase in appeals and competition for discretionary funds."

from the New York Times