There are many fantastic ways to celebrate and honor Women’s History Month. To help add to the festivities throughout the month of March, I recommend turning up my latest Spotify playlist.
Featuring a collection of empowering, inspiring songs sung by rockstar women. Feel free to crank up the tunes when you: need a positive boost, want to dance it out, or even when you’re brainstorming about how to support gender parity through charitable donations or dedicated nonprofit programs.
Who are your favorite female artists you love to jam out to? I’d love to hear from you on Facebook or Twitter. And if this playlist inspires thoughts about forming a female-focused nonprofit, or building a more representative board, or enhancing programming centered on women’s rights or women’s history? Don’t hesitate to contact me via email or phone (515-371-6077).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2019/03/Screen-Shot-2019-03-25-at-1.02.39-AM.png6521047Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-03-03 20:57:392020-05-18 11:28:35Turn up the Tunes: Women's History Month
When you first read the headline to this blog post you might have been (rightfully) confused. A private foundation is a type of 501(c)(3), so isn’t this type of nonprofit tax-exempt from federal income tax? This is just one of the nuances of private foundations that can make forming and managing them complicated. Previously I’ve covered other aspects about the private foundation that are important for foundation leaders to understand including avoiding jeopardizing investments, prohibited grants, self-dealing, and payout requirements. Today let’s shine the learning spotlight on excise taxes.
Tax Exempt, But…
Even though private foundations are exempt from income tax, they are subject to an annual 2% excise tax on the income they earn on their net investment income. (This is often referred to as the private foundation excise tax.) The purpose of collecting this revenue is to fund IRS oversight of the nonprofit sector.
Can you Reduce the Tax?
In certain circumstances, the excise tax can be reduced to 1%. The tax is reduced in situations where a foundation’s distributions (measured as a percentage of assets) in a given tax year exceed the average payout rate of the foundation over the preceding five years, by an amount at least as much as the 1% tax savings the foundation will obtain. This is called the “maintenance of effort test” and was implemented to make certain that tax savings are being used for added charitable expenditures as opposed to being “pocketed” by the foundation.
Managing and administering the private foundation excise tax can be difficult and complicated, particularly because of the two-tier tax structure. This can also be challenging in decision-making because it somewhat discourages foundations to consider increasing gift for unanticipated grants, such as in the case of a natural disaster or other relief efforts. To comply with the private foundation excise tax requires staff to constantly monitor and adjust spending and savings in order to calculate the correct tax rate.
I highly recommend enlisting an attorney well-versed in private foundation operations in order to stay on top all requirement and avoid detrimental missteps. You may also want to consider implementing training for foundation board members. It’s also a good idea to implement sound policies and procedures and update them when necessary as the foundation evolves and circumstances change.
Questions? Want to learn more about how to make certain your private foundation is set up for success from the start? Don’t hesitate to contact me for a free consultation. You can also download my free, no-obligation nonprofit formation guide!
A last will and testament certainly sounds like a complex document. But, when boiled down, your will answers just three simple, yet important questions.
Who do you want to inherit your assets?
A will provides for the orderly distribution of your property at death according to your wishes. By property, I mean everything you own. Your property includes both tangible and intangible things. An example of a tangible item would be your stamp collection. An example of intangible items would be stocks and bonds.
Who do you want to be in charge of carrying out your wishes as expressed in the Will?
In a will, you also name the “executor” of your estate. The executor is the person who’s responsible for making sure the will is implemented as written. Needless to say, this is a very important position, and you want to name someone you can trust completely, and you know to be responsible and competent.
Who do you want to take care of your kids?
If you have minor children (i.e., kids under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults. Also, a will can set up a financial trustee (may be the same as the guardian) who can oversee and be responsible for your child’s funds until they are old enough (and mature enough) to inherit property.
Without a last will and testament, you’ve given no guidance to anyone about who should inherit your property, who should be in charge of carrying out your wishes, and who you want to be your kids’ legal guardian. Not having a will creates unneeded stress and heartache, and even total chaos, for your loved ones and friends. This distress would also come at the worst possible time—when they are mourning your passing.
Drafting a quality estate plan that incorporates your wishes and goals is the height of responsibility. And if estate planning sounds intimidating, fear not! We’ll walk through the five steps of estate planning together. The best place to start is with my Estate Plan Questionnaire.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2017/11/neven-krcmarek-258761.jpg31894783Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-02-29 16:37:092020-05-18 11:28:35Terrible, horrible, no good, very bad idea of NOT having a Will
Turn up the Tunes: Women’s History Month
UncategorizedThere are many fantastic ways to celebrate and honor Women’s History Month. To help add to the festivities throughout the month of March, I recommend turning up my latest Spotify playlist.
Featuring a collection of empowering, inspiring songs sung by rockstar women. Feel free to crank up the tunes when you: need a positive boost, want to dance it out, or even when you’re brainstorming about how to support gender parity through charitable donations or dedicated nonprofit programs.
Who are your favorite female artists you love to jam out to? I’d love to hear from you on Facebook or Twitter. And if this playlist inspires thoughts about forming a female-focused nonprofit, or building a more representative board, or enhancing programming centered on women’s rights or women’s history? Don’t hesitate to contact me via email or phone (515-371-6077).
Tax Talk: Private Foundations and Excise Taxes
Nonprofits, Taxes & FinanceWhen you first read the headline to this blog post you might have been (rightfully) confused. A private foundation is a type of 501(c)(3), so isn’t this type of nonprofit tax-exempt from federal income tax? This is just one of the nuances of private foundations that can make forming and managing them complicated. Previously I’ve covered other aspects about the private foundation that are important for foundation leaders to understand including avoiding jeopardizing investments, prohibited grants, self-dealing, and payout requirements. Today let’s shine the learning spotlight on excise taxes.
Tax Exempt, But…
Even though private foundations are exempt from income tax, they are subject to an annual 2% excise tax on the income they earn on their net investment income. (This is often referred to as the private foundation excise tax.) The purpose of collecting this revenue is to fund IRS oversight of the nonprofit sector.
Can you Reduce the Tax?
In certain circumstances, the excise tax can be reduced to 1%. The tax is reduced in situations where a foundation’s distributions (measured as a percentage of assets) in a given tax year exceed the average payout rate of the foundation over the preceding five years, by an amount at least as much as the 1% tax savings the foundation will obtain. This is called the “maintenance of effort test” and was implemented to make certain that tax savings are being used for added charitable expenditures as opposed to being “pocketed” by the foundation.
Managing & Administering
Managing and administering the private foundation excise tax can be difficult and complicated, particularly because of the two-tier tax structure. This can also be challenging in decision-making because it somewhat discourages foundations to consider increasing gift for unanticipated grants, such as in the case of a natural disaster or other relief efforts. To comply with the private foundation excise tax requires staff to constantly monitor and adjust spending and savings in order to calculate the correct tax rate.
How to Prepare Your Private Foundation
I highly recommend enlisting an attorney well-versed in private foundation operations in order to stay on top all requirement and avoid detrimental missteps. You may also want to consider implementing training for foundation board members. It’s also a good idea to implement sound policies and procedures and update them when necessary as the foundation evolves and circumstances change.
Questions? Want to learn more about how to make certain your private foundation is set up for success from the start? Don’t hesitate to contact me for a free consultation. You can also download my free, no-obligation nonprofit formation guide!
Terrible, horrible, no good, very bad idea of NOT having a Will
Wills, Wills, Trusts & EstatesA last will and testament certainly sounds like a complex document. But, when boiled down, your will answers just three simple, yet important questions.
Who do you want to inherit your assets?
A will provides for the orderly distribution of your property at death according to your wishes. By property, I mean everything you own. Your property includes both tangible and intangible things. An example of a tangible item would be your stamp collection. An example of intangible items would be stocks and bonds.
Who do you want to be in charge of carrying out your wishes as expressed in the Will?
In a will, you also name the “executor” of your estate. The executor is the person who’s responsible for making sure the will is implemented as written. Needless to say, this is a very important position, and you want to name someone you can trust completely, and you know to be responsible and competent.
Who do you want to take care of your kids?
If you have minor children (i.e., kids under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults. Also, a will can set up a financial trustee (may be the same as the guardian) who can oversee and be responsible for your child’s funds until they are old enough (and mature enough) to inherit property.
Without a Will, There’s No Way
Without a last will and testament, you’ve given no guidance to anyone about who should inherit your property, who should be in charge of carrying out your wishes, and who you want to be your kids’ legal guardian. Not having a will creates unneeded stress and heartache, and even total chaos, for your loved ones and friends. This distress would also come at the worst possible time—when they are mourning your passing.
Drafting a quality estate plan that incorporates your wishes and goals is the height of responsibility. And if estate planning sounds intimidating, fear not! We’ll walk through the five steps of estate planning together. The best place to start is with my Estate Plan Questionnaire.
I’d love to hear from you. You can email me anytime at gordon@gordonfischerlawfirm.com.