Working With MCF

Bequest Creates Donor Advised Fund

An estate planning attorney contacted MCF about a client who wanted to create a fund to allow her two children to recommend grants after her death. The children have different interests, and the client wanted to be sure they each could give to the causes that mattered most to them.

MCF staff met with the client to discuss her objectives and concerns and recommended creating a donor advised fund with a bequest in her will. The donor’s two children will recommend annual distributions from the fund.

One daughter has lived in Portland for many years and will likely direct distributions to projects and organizations she is involved with in that area. The other daughter lives in the Madison area, and will continue to give to her mother’s favorite causes in the arts, environment and early childhood education.

Supporting a Range of Organizations Working in One Field

These clients knew exactly what type of work they wanted to support with their giving, but didn’t want to commit their gift to just one organization. They understood that over time the areas of greatest need were likely to shift and wanted to be sure their support was directed where it would have the greatest impact.

Their attorney knew that MCF’s deep knowledge of the area’s nonprofit organizations and its permanent nature meant we probably would have a solution. We met with the clients and advisor and recommended that they use their bequest to create a field of interest fund — a permanent endowment fund that makes distributions to organizations working in the area they designated.

Today, their fund makes grants to support neighborhood and community centers in Madison. Grants are recommended by MCF staff and approved by the MCF Board of Governors, and have been used to support capital campaigns, technology equipment, food pantries and youth programs at the community centers.

IRA Designation Creates Donor Advised Fund

While working on a client’s estate plan, their attorney realized the client had several different goals for their planned giving, wanting to both make immediate gifts and to create a lasting legacy through a variety of endowed funds. The advisor turned to MCF, knowing that we would be able to help the client achieve all their goals relatively simply.

To meet both the immediate and long-term goals this donor outlined, we created a legacy giving agreement that did the following using the proceeds of the client’s individual retirement account through a bequest:

• Immediately distribute a variety of small, one-time gifts to 20 different charities in Wisconsin and across the nation,
• Make a larger distribution to the UW Foundation to create a new scholarship in the donor’s name, and
• Establish a scholarship fund to be managed by MCF, with an annual award provided to a Middleton High School student.

The remaining funds created a permanently endowed donor advised fund that the donor’s three adult children could recommend grants from.

Using Life Insurance Proceeds to Create Donor Designated Funds

A client told their advisor that they wanted to provide permanent support for three different organizations as part of their estate plan. The advisor recommending using the client’s life insurance proceeds to fund this giving, and suggested the client contact MCF to facilitate the gifts.

We helped the client put together a statement of intent to create permanent named endowment funds designated for the three organizations – a local church, a national children’s health organization and an orphanage in Colorado where the donor was raised.

The donor named MCF as the beneficiary of the insurance policy, knowing the proceeds would be used to leave a lasting family legacy of support to these organizations.

Supporting Many Organizations With a Designated Passthrough Fund

An older man supported 30 different organizations each year and was finding it harder to manage his giving. He also wanted to continue to support these organizations after his death. He knew his son would not have the time to manage the giving on his behalf, so his accountant recommended that he talk to someone at MCF.

We worked with the donor to create a designated passthrough fund to support his 30 chosen organizations during his lifetime. When the donor died, a charitable bequest added to the fund. Each year, 20% of the fund’s current balance is distributed to the 30 different organizations in proportions established by the donor. When the fund balance falls below a set amount, MCF will distribute the fund’s entire balance.

MCF provides the donor’s son a report on distributions made each year. If any of the named organizations cease to exist, MCF, in consultation with the donor’s son, will direct the share of the annual distribution to another organization with a similar mission.