Takeaways
SITUATION: Cornelia Roosevelt was overwhelmed by the administrative burdens of their private foundation after her husband, Kenny, passed away.
SOLUTION: Collapse the private foundation into a DAF. Assets remain under management at her financial advisor’s firm.
IMPACT: The DAF offered lower costs and relieved Cornelia of administrative burdens, allowing her to focus on charitable giving and honoring Kenny’s legacy.
Situation
Intent on using their wealth for the benefit of others, a couple of decades ago Kenny and Cornelia Roosevelt set up a private family foundation to administer their charitable gifts. Kenny took great pride in managing the foundation and ensuring that it gave generously to causes he and Cornelia cared about.
When Kenny passed away, Cornelia suddenly found herself facing the administrative tasks Kenny had handled so well. Tax time especially frustrated her. She hated dealing with gift documentation and paying a CPA to complete tax filings. She wanted to honor Kenny’s legacy by continuing to give, but she was daunted by the required work.
Solution
To ease her burden, Cornelia’s CPA urged her to talk to her financial advisor about establishing a DAF. To gather information, her advisor reached out to a Ren Strategic Growth Advisor, and they decided to schedule a three-way call with Cornelia to determine whether a DAF would indeed benefit her.
Cornelia, her advisor, and Ren’s Strategic Growth Advisor discussed Cornelia’s philanthropic goals and vision, the charities she likes to support, and the role she would like to play in giving. Together, they decided that a DAF would be the best vehicle to meet Cornelia’s objectives, allowing her to continue to support causes she cares about while reducing costs and administrative burdens.
Impact
Cornelia was delighted. She was able to honor Kenny and their shared legacy of giving, but without the stress and cost of managing the private foundation. The DAF manages administrative tasks and tax filing, allowing her to recommend charities that receive grants and she can even make gifts in Kenny’s honor, all while continuing to work with her advisor on how the funds in the DAF are invested.
Disclaimer: This hypothetical example, based on a real scenario with altered identifying information, is for educational use only. The situations, tax rates, and returns mentioned are not reflective of actual clients or investments. There is no guarantee the depicted rates can or will be achieved. Results will vary. Consult legal and tax advisors for suitability. RCF reviewed all due diligence documents, including governing documents, audited financials, and tax returns.
