October, 2003: "The Million Endowment and Your Will"

by Mike Bourland
American Football Coaches Foundation

Courtesy: AFCA
Release: 10/01/2003

The vision of the American Football Coaches Association 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 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 two installments of this column, the Foundation discussed its new $20 Million Endowment Initiative, explained how it functions for the AFCA, and demonstrated the strategic importance of your participation in the Foundation's new Initiative.

The AFCA is a tax-exempt trade organization, however, direct contributions to the AFCA do not qualify for an income or estate tax charitable deduction to the donor. The Foundation is a publicly supported, tax-exempt charity. Donations to the Foundation do qualify for an income and estate 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 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. Your participation is very important in order for the Foundation and 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 maintain its favorable tax status.

One way for you and those within your sphere of influence to make a gift to the Foundation is by a Will. Through this method of giving, the donor names the Foundation as a beneficiary in his or her Will. Naming the Foundation as a beneficiary in your Will, results in the transfer of property to the Foundation upon the donor's death. Because the Foundation is a publicly supported, tax exempt charity, the estate of the donor receives an estate tax charitable deduction for the value of the property passing to the Foundation at the donor's death under the donor's Will.

As stated before, the $20 Million Endowment Initiative is an ambitious undertaking. It is strategic to the future success of AFCA. The accomplishment of the Foundation's Initiative will require contributions from many different sources, including gifts under a donor's Will, as well as other estate planning devices. Other estate planning devices to support the Foundation's Initiative will be discussed in future installments of this column.

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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