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Minnesotans are generous: According to the U.S. Census Bureau and the Foundation Center, Minnesota ranks 21st in population, 16th in total giving -- but 13th in giving per capita.
Individual Minnesotans give the most: The majority of charitable giving -- 72 percent, or $3.56 billion -- comes from individual Minnesotans, and the remaining 28 percent is given by foundations and corporate giving programs*.
The average charitable contribution claimed on Minnesotans' tax returns in 2009 was $3,496. That year, 836,123 of us claimed such contributions on our returns.
Education received the largest share of grant dollars -- 26 percent**. Nationally, education and health are tied at the top, each getting 23 percent of grant dollars^.
The McKnight Foundation was ranked the 11th largest family foundation in the nation in 2009.
Margaret A. Cargill Philanthropies, once completely up and running, will likely be among the top 10 grant makers in the U.S.*Minnesota Council on Foundations, Giving in Minnesota, 2011 Edition. **Minnesota Council on Foundations, Giving in Minnesota, 2011 Edition; based on grants of $2,000 or more made by a sample of 100 of the largest grantmakers in Minnesota. ^The Foundation Center, Foundation Giving Trends, 2011; based on all grants of $10,000 or more awarded by a sample of 1,384 larger foundations.
Here were Minnesota's five largest education grant makers in 2009. These grant makers gave 52 percent of the total education dollars in the sample**.
1. Target Foundation and Corporation $49,686,905
2. General Mills Community Action $43,046,692
3. L. and N. Andreas Foundation $14,612,698
4. Fred C. and Katherine B. Andersen Foundation $10,768,000
5. The Minneapolis Foundation $8,839,675
Making direct gifts to charities from your current income or assets is a familiar route for most of us. Direct gifts provide immediate financial support for religious organizations, educational institutions, and many other nonprofits working to meet important community needs in such areas as health care, the arts, the environment, civic improvement or human services. Gifts are sometimes made in memory or in honor of an individual.
To learn more about an organization before making a gift, or to determine which nonprofits are addressing areas of particular interest to you, visit a charity evaluation web site such as www.give.org or www.smartgivers.org.
Federated funds, such as the Greater Twin Cities United Way, participate in annual workplace giving campaigns that raise millions of dollars for nonprofit organizations. Workplace giving campaigns allow employees to set up an automatic deduction from their payroll check to be donated to a federated fund or funds, and sometimes individual charities, of their choosing. Ask your employer for details about giving options where you work.
Community foundations are charitable organizations that administer a number of funds primarily for local purposes, to solve community or regional problems and improve the lives of people in their geographic area. Community foundations are found in most states, major cities, and in numerous counties and small towns.
Community foundations allow you to establish charitable funds without incurring the costs of starting and administering a private foundation. Community foundations are administered by a governing body or distribution committee representative of community interests. Because community foundations are public charities supported by donors from across the community, all contributions to community foundations are allowed significant tax benefits.
If you'd like more information on making a gift to or through a community foundation, contact a community foundation directly. For a list of many Minnesota-based community foundations, see a list of community foundation members of the Minnesota Council on Foundations at www.mcf.org/members or try the national Council on Foundations' community foundation locator at bit.ly/community-fdns.
Your gift to a community foundation can create or support different types of charitable funds, including:
Unrestricted Fund: Income from your gift is used where the foundation's board deems it is most needed.
Field of Interest Fund: You support charitable organizations in a specific field of your choice, such as the arts, education or the environment.
Designated Fund: You designate one or more specific charitable organizations to benefit from your gift.
Donor-Advised Fund: You can assign family members and others to join you in advising the foundation on how the income or principal from your fund should be distributed. You can establish a broad purpose for your donor-advised fund, or specify a more targeted field of interest. The community foundation may charge an annual fee for administering your fund. Donor-advised funds can be set up by individuals, families or corporations.
"Planned giving" is a term commonly used to describe a wide variety of giving vehicles that allow you to give to charity during your lifetime and/or after your death, while meeting your current income needs and providing for your heirs. Planned giving is typically done in conjunction with estate planning and is a viable option for donors of all income levels.
From a donor's perspective, planned giving is attractive for many reasons. It may allow you to make larger gifts than you otherwise could out of your current assets. Depending on how a planned gift is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes. Planned gifts often appeal to people who want to benefit a charitable organization but aren't certain how much of their assets they'll need for themselves during their lifetimes.
Planned gifts can be used to benefit a specific nonprofit organization, to establish a fund at a community foundation or to start a private foundation.
For more information on planned gifts, contact the Minnesota Planned Giving Council (www.mnpgc.org).
Source: Minnesota Council on Foundations, Toolkit for Giving, www.mcf.org/donors.Report finds fall in state's charitable giving as recession continues
In October, the Minnesota Council on Foundations released its Giving in Minnesota, 2011 Edition research report, the most comprehensive analysis of charitable giving in the state. The report shows giving by individuals, foundations and corporate giving programs totaled $4.9 billion for the 2009 research year, a decrease of 9.3 percent from 2008.
Individual giving in Minnesota declined 11.3 percent from 2008 to 2009, to $3.6 billion. The majority of the state's charitable giving -- 72 percent in 2009 -- comes from individuals. Foundation and corporate grant making accounted for 28 percent, or $1.37 billion, in 2009, a drop of 3.6 percent from 2008.
"People were hit hard by the 2008-09 recession, so it's understandable that giving by individuals was down most significantly," said Bill King, MCF president. "Foundations and corporate givers made a strong effort to hold the line, and their grantmaking only dropped by a few percentage points."
The 2009 research year, the most recent time period for which complete data are available, includes financial information from foundations and corporate giving programs with fiscal years ending between June 1, 2009, and May 31, 2010.Foundation assets begin to rebound
Minnesota foundation assets increased 6 percent to $18.33 billion in 2009 from $17.30 billion in 2008. But, the asset decline of 10.7 percent from 2007 to 2008 -- the largest single-year decline since 1995 -- remained a factor in 2009's decrease in giving.
"The increase in foundation assets is good news, but it will take time and a more stable economy before giving levels catch up," says King. "Foundations typically base grant making on a one- to three-year average of past asset performance, so 2008's decrease may continue to have a negative impact for another year or so."
Corporate foundations and giving programs, which comprise just 9 percent of the 1,470 grant makers in the state, accounted for 46 percent of all grant dollars in 2009. Private foundations, the vast majority (85 percent) of Minnesota's grantmakers, gave 42 percent of the grant dollars paid. The smallest portion of the state's grant makers, community/public foundations, accounted for 12 percent of the total grant dollars.Education and human services receive the largest shares
As in previous years, the three areas receiving the largest shares of Minnesota's grant dollars were education, human services, and public affairs/society benefit, at 26 percent, 23 percent, and 18 percent, respectively. In 2009, education displaced human services as the subject category receiving the largest share. Education has captured the largest share of Minnesota's grant dollars in all but three years (2001, 2005 and 2008) since MCF began conducting Giving in Minnesota studies in 1976.
The subject area information is based on an analysis of grants of $2,000 or more made by a sample of 100 of Minnesota's top grant makers, These grants represent about two thirds of the state's philanthropic giving for the year.
Overall, grant making by the sample declined 4 percent from 2008 to 2009. Giving to six of eight subject areas decreased. Funding for the public affairs/society benefit category grew, while grant dollars for education remained flat.Giving to Minnesota drops below 50 percent
The 2009 research year marks the first period since MCF began conducting Giving in Minnesota studies in 1976 in which less than half (48 percent) of the dollars given by Minnesota grant makers went to organizations and programs serving Minnesota. The Twin Cities metropolitan area received 30 percent of the total grant dollars, Greater Minnesota received 10 percent, and Minnesota statewide received 8 percent. Organizations serving other states, the country and other parts of the world received 52 percent of grant dollars. In 2008, percentages were reversed, with 52 percent of dollars staying in Minnesota and 48 percent going elsewhere.
"In general, more corporate grant makers' dollars go out of state, as multi-nationals typically distribute their funding between Minnesota, where they are headquartered, and other regions of the world where they have facilities and do business," said King. "Also in 2009, several private foundations made larger than usual gifts to out-of-state organizations."
Based on available data, just over half of the sample's grants could be coded to a specific beneficiary group. Of those, the largest share of dollars -- 22.2 percent -- went to organizations that serve children and youth, which is similar to past years.
MCF conducts the Giving in Minnesota research annually to examine long-term trends in charitable giving. For the Giving in Minnesota, 2011 Edition summary and complete report, see www.mcf.org/research/giving.What is a Foundation?
A foundation is a nonprofit organization that supports charitable activities in order to serve the common good. Foundations are often created with endowments-money given by individuals, families or corporations. They generally make grants or operate programs with the income earned from investing the endowments. The Minnesota Council on Foundations often uses the term "grantmaker" when referring to our member foundations. The term is a broader label that also includes corporate giving programs, which also give grants but are not technically "foundations."
There are three basic types of grantmaking foundations:
Independent foundations are the most common type of private foundation. They are generally founded by an individual, a family or a group of individuals. They may be operated by the donor or members of the donor's family-a type often referred to as a family foundation-or by an independent board.
Corporate foundations are created and funded by companies as separate legal entities, operated by a board of directors that is usually comprised of company officials. Corporations may establish private foundations with endowments, make periodic contributions from profits, or combine both methods to provide a foundation's resources.
Some companies operate in-house corporate giving programs, which unlike corporate foundations are under the full control of the company and are not required by law to follow the same IRS regulations. Many corporations maintain both a foundation and a corporate giving program.
Community and other public foundations are publicly supported foundations operated by, and for the benefit of, a specific community or geographic region. They receive their funds from a variety of individual donors, and provide a vehicle for donors to establish endowed funds without incurring the costs of starting a foundation. Community/public foundations are administered by a governing body or distribution committee representative of community interests.
Some foundations have broad discretion regarding the charitable causes to which their grants can be directed. Others are sharply limited-often legally-by the mandate of the foundation donor. Some foundations are restricted to making grants only to specific causes; others must restrict their grantmaking to a specific geographic area.
Foundations are governed by stricter regulations than public charities, which generally raise money from the public to operate institutions or programs. Both foundations and public charities might use the term "foundation" in their titles, but very different laws apply to each. The IRS requires that independent and corporate foundations:
• Pay out at least 5 percent of the year-end fair market value of their assets.
• Pay an excise tax of 1 or 2 percent on their earnings.
• Give money only to other 501(c)(3) organizations, with a few rare exceptions.
Nearly all community/public foundations are considered public charities by the IRS. As such, they are not subject to the same regulatory provisions as independent and corporate foundations.Source: Minnesota Council on Foundations, www.mcf.org/what-is-a-foundation