June, 2003: "The Million Endowment Initiative: Part 2"

by Mike Bourland
American Football Coaches Foundation

Courtesy: AFCA
Release: 06/01/2003

The vision of the American Football Coaches Association (AFCA) is to provide education for American football coaches so that they can better serve the public, not only through the enhancement of their technical skills and coaching capabilities, but also through role modeling and character development for young men and young women. The AFCA provides substantial benefits to its member coaches, at an extremely low cost, including the annual convention from which all coaches benefit. In order to provide these benefits, the AFCA must have available a large amount of revenue.

The American Football Coaches Foundation (the "Foundation") was created to raise funds to help promote and support the AFCA's education vision and activities. The Foundation was created to provide financial resources for the AFCA through various fund development initiatives. In the last installment of this column, the Foundation introduced its new $20 million initiative, explained how it functions for the AFCA, and it demonstrated the strategic importance of your participation in this new initiative.

The AFCA is a tax-exempt trade organization. However, direct contributions to the AFCA do not qualify for an income tax charitable deduction to the donor. The Foundation is a publicly supported, tax-exempt charity. Donations to the Foundation do qualify for an income tax charitable deduction to the donor. In order to maintain this favorable tax status, the Foundation must meet certain guidelines in raising funds. A big portion of these guidelines relate to the source of the financial support. A publicly supported charity like the Foundation maintains its favorable tax status by receiving a significant portion of its financial support from a lot of different donors. All coaches who are members of the AFCA should be contributors to the Foundation. Permissible sources of this public support can come not only from contributions from coaches but also from people within the sphere of influence of the coaches. Donations from these sources are subject to specific rules and restrictions, which have been discussed in past articles.

The AFCA, in the past, has relied upon membership fees of its member coaches, two pre-season college football games, corporate sponsorships and other sources to provide funds to accomplish its vision. Unfortunately, the revenue from the football games is no longer available resulting in a tremendous loss of revenue to the AFCA. A significant AFCA need is to replace the revenue that has been lost from the two pre-season football games to support its programs. The Foundation must help replace this loss of financial support. Your participation is very important in order for the Foundation and the AFCA to reach their goals.

Because the Foundation is a publicly supported charity and must receive a large portion of its support from a broad segment of the general public, the Foundation cannot rely solely on contributions from a few wealthy individuals or their family foundations for the Foundation to maintain its favorable tax status. This rule was intended by the IRS to make sure that a publicly supported charity is responsive to a broad range of the public, benefits the public at large and is not controlled by a small group of wealthy individuals. Contributions build upon themselves. For every one dollar contributed by a coach or other individual, two dollars more can be raised from a wealthy contributor, or his or her family foundation, and the Foundation still maintains its favorable tax status.

To enhance the support to the AFCA, the Foundation has introduced its new endowment initiative. It is the most ambitious fund development undertaking ever considered by the AFCA or the Foundation. The new program is a $20 million endowment initiative. The goal of the new initiative is to raise for the Foundation, over the next 10 years, a permanent fund in the amount of $20 million. This endowment fund will preserve its original principle and sufficient growth in asset value to increase its funds to offset the affects of inflation. The principle and its inflation protection growth will never be spent. Only the income and asset growth in excess of the inflation offset amount will be spent annually to support the AFCA vision.

In normal economic times this could provide up to $1 million a year of support for the AFCA vision, in perpetuity. While it is hoped that this $20 million initiative will be accomplished with 20 increments of $1 million each, it is acceptable to reduce the size of an individual increment to $250,000 or $500,000. Each increment is further broken into 100 parts. Each part is broken into 10 annual contribution pieces. Each annual contribution piece is in the amount of $250, 500 or $1,000, depending on the amount of the individual increment. The thrust of the new initiative is that 100 individuals will each agree to give $250, $500 or $1,000 per year for 10 years, (i.e. total of $250,000, $500,000 or $1 million) to honor their college football head coach in appreciation for all that person has meant to their lives.

Honoring college football head coaches by their former players each committing to donate agreed upon amounts to the Foundation for 10 years, will raise a $20 million endowment fund for the Foundation during the 10-year period.

As stated before, this is an ambitious undertaking. It is strategic to the future success of the AFCA. And it is accomplishable. But we need to get stared now. We need to think about the college football head coach we want to honor. In future issues of The Extra Point we will continue to discuss this new initiative, will report on its progress and give ideas to help you present the new initiative to those with whom you have influence.

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“Coach George Smith is not only an influence on young people, but the influence is multiplied many times in the beliefs of the young people he helped mold into amazing human beings. George is an outstanding coach, but more importantly, he is an outstanding gentleman.” —Tina Jones, Principal of St. Thomas Aquinas High School