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March 18, 2011 at 05:36 AM
Eileen Heisman interacts with a broad cross section of people involved in charitable giving in her role as president and chief executive of National Philanthropic Trust. She also teaches philanthropy and fundraising at the University of Pennsylvania’s School of Social Policy and Practice. But day to day, “my work is very practical and hands-on, and our donors bring us a lot of wisdom,” she said in a telephone conversation with AdvisorOne.
Heisman discussed some best practices of the kind of philanthropy she and her colleagues see, picked up from donors and people they respect about how they approach philanthropy.
Legacy Management
Philanthropy is a common way people with sufficient means pass on their values to their children. They can create giving vehicles, and use those to pass on assets to encourage the next generation to give as well. Donor-advised funds (DAFs) and private foundations are the most common giving vehicles, and these can be passed down to future generations. “Passing on charitable giving vehicles can force the next generations to figure out their relationship to their communities in ways that regular inheritances can’t,” Heisman said. A giving vehicle is also tax efficient for purposes of estate and tax planning, she said.
Foreign Philanthropy
Heisman (left) finds that Americans have become intensely interested in foreign philanthropy, in no small part because of advances in global communications. “CNN is a great litmus test for how much smaller the world is.” She said NPT has witnessed a huge increase in foreign grant making over the past year. “Donors are mobile; even if they’re not there [at the scene of a disaster, for example], they can see it quickly and want to respond.”
Unlike most DAF organizations, NPT makes foreign grants directly, Heisman said. “If donors come to us with an interest in supporting a foreign entity or a foreign cause, instead of going through another entity, we will do the due diligence directly and support the organization.”
This involves a very hands-on approach. NPT has to be able to demonstrate expenditure responsibility: that the foreign entity is spending the money on a purpose similar to, equivalent to a charitable activity in the U.S. because the donor has received a charitable deduction for the donation. A year later, it has to seek proof from the foreign entity that is has used the money for the exact purpose it initially posed. NPT must also clear the organization with the Treasury Department’s Office of Foreign Asset Control.
NPT, like many DAF organizations, also makes foreign grants through domestic U.S. charitable entities called “friends of” organizations. Here donors give to a domestic organization, such as “friends of Oxford University,” which passes it on to the foreign charity.
How to Give
