February, 2007: "The Foundation and Planned Giving - Your Will and Living Trust"

by Mike Bourland
American Football Coaches Foundation

Courtesy: AFCA
Release: 02/01/2007

In the First Quarter 2005 issue of the Extra Point, we discussed the use of a properly crafted Will and Living Trust as one of the methods of Planned Giving which can assist The American Football Coaches Foundation ("The Foundation") to meet its financial requirements. As previously stated Planned Giving is the structured and pre-planned donation process for gifts to The Foundation. It is charitable giving through multiple tax and estate planning methods. In this issue, we will again review giving to The Foundation through your Will and Living Trust, the basic Planned Giving tool. But before we discuss this Planned Giving technique, let's review some of the previously described key aspects of The Foundation, as well as the American Football Coaches Association ("AFCA"), their goals and how they accomplish their goals.

The goal of the 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. As we write in this column regularly, AFCA provides substantial benefits to its member coaches, at an extremely low cost, including the annual convention that all have the opportunity to attend and from which all benefit. In order to provide these benefits, the AFCA must have available a large amount of capital.

In regard to the goals of The Foundation they too are to provide education and education funding for American football coaches to help them to better serve the public through their role modeling and character development function and to enhance the coaches' technical skills and coaching capabilities.

The AFCA is a tax exempt trade organization. Contributions to the AFCA do not qualify for an income tax charitable deduction to the donor.

The Foundation is a federal tax favored, publicly supported, tax-exempt charity. Contributions to The Foundation qualify for an income tax and an estate tax charitable deduction to the donor. Fundraising activities of The Foundation must be structured to maintain The Foundation's advantageous publicly supported, tax exempt charity status.

To meet the requirements of a publicly supported, tax exempt charity, The Foundation must receive at least one-third (1/3) of its support from a broad range of donors, which includes AFCA member coaches. This is why your annual contributions and membership payments are anticipated and necessary to the success of The Foundation. For every dollar from an AFCA member coach, The Foundation can receive two additional dollars from a larger donor or donor foundation without endangering The Foundation's favorable publicly supported, tax exempt charity status. This characteristic of The Foundation is emphasized in each of these columns so that all AFCA member coaches can see how important each AFCA member coach's personal gifts are to The Foundation's strategic game plan to solicit and receive contributions from wealthy individuals and their family foundations. With gifts from member coaches and wealthy individuals and their family foundations, The Foundation will have funds that it can put to work immediately in support of The Foundation's goals.

The simplest and most basic way for member coaches and those within the coaches' sphere of influence to make gifts to The Foundation is in their Will and Living Trust. A coach or someone within his sphere of influence can make a significant gift to The Foundation by naming The Foundation as a beneficiary of the person's Will or Living Trust.

Through the Will, the donor names The Foundation as a beneficiary in his or her Will resulting in the transfer of property to The Foundation upon the donor's death.

Through the Living Trust, the donor transfers property in trust during the donor's life, solely for the benefit of the donor during the donor's life, and at the donor's death, the property passes to The Foundation.

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 Will or through the Living Trust. However, no income tax charitable deduction for the value of the property passing to The Foundation, whether under the donor's Will or through the donor's Living Trust, is allowed to the donor or the estate of the donor.

As a further reminder, there is still time to acquire a Bench, Plaque, Capstone, Tile or Brick in the Plaza of Influence. The Plaza of Influence presents a tremendous method for AFCA member coaches, as well as the general public, to prominently honor a special football coach and to make a contribution to The Foundation. The Plaza of Influence is a stone-lined plaza located at the AFCA facility in Waco, Texas. For a contribution to The Foundation ranging from $2,000, for a Bench, to $200, for a Brick, you or anyone within your sphere of influence can have an inscription for, as well as a brief salute regarding, a special football coach imprinted on that which you acquire. The inscription will honor this special football coach and will be a permanent part of the Plaza of Influence, which is a significant aspect of the AFCA facility. Payment for each item will be treated as a contribution to The Foundation and will entitle the donor to a income tax charitable deduction.

Please continue to plan and conduct fundraising events in your community, such as banquets and golf tournaments, for The Foundation's benefit. Proceeds from admissions, sales of merchandise, performance of services, or furnishing of facilities at an event are classified as "gross receipts" funds of The Foundation. Gross receipts funds should target a broad base of the community, as no single person can provide more than 1% of The Foundation's total support through gross receipts and have it count toward maintaining The Foundation's favorable publicly supported, tax exempt charity status. Also, care should be taken so that no fundraising activity becomes an ongoing business, to avoid The Foundation having unrelated business taxable income (UBTI) from the activity, resulting in taxable income and income tax to The Foundation and possible loss of The Foundation's favorable publicly supported tax, exempt status.

Will you consider making a gift to The Foundation through Your Will, Living Trust or some other Planned Giving Technique? Will you encourage others to do this? Will you continue to plan and conduct fund raising events in your community for The Foundation's benefit? Have you acquired (and encouraged others to acquire) a permanent salute in the Plaza of Influence for the special football coach in your (or others) life? Remember that The Foundation absolutely must have the participation of every member coach in order for The Foundation to meet its goals.

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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