CREATE YOUR LEGACY

KNIGHTS OF COLUMBUS CHARITABLE FUND FACILITATES TAX-DEDUCTIBLE CHARITABLE GIVING

The Knights of St. Francis of Assisi Council 13456 in Henderson, Nev., do a lot of good in their community. Last year, they collected and donated more than 85,000 pounds of food; raised thousands of dollars for charitable organizations; and contributed significant sums toward the new school their parish is building.

Some council members were convinced they could do even more if they could solve a tax-code conundrum: Contributions to the charitable fund of a council — a 501(c)(8) fraternal society — are not tax deductible, even if the money ends up being donated to a 501(c)(3) nonprofit.

“We kept thinking there’s got to be a way for us to be able to receive funds and provide the donor with a tax deduction,” recalled Mike McNelley, the council treasurer.

After McNelley contacted the Knights of Columbus headquarters last fall, Council 13456 became one of the first clients of Knights of Columbus Charitable Fund — a new 501(c)(3) nonprofit organization offering donor-advised funds to help Catholics give to charity more effectively, conveniently and faithfully.

Donor-advised funds are increasingly popular charitable vehicles that provide individuals, families and organizations the opportunity to potentially lower tax bills as money is donated to the fund. They provide an opportunity to maximize charitable giving, while retaining the ability to advise on how charitable contributions are distributed.

Knights of Columbus Charitable Fund combines these advantages with another: a guarantee that your money will not be invested in or donated to companies and causes that conflict with the Catholic faith.

Supreme Knight Carl Anderson said, “For Catholics seeking to support the causes closest to their hearts, Knights of Columbus Charitable Fund offers a trusted partner to assist those in need and build a legacy of generosity.”

FOUNDING A FUND

Dennis Gerber, a member of St. Ann’s Council 2853 in Fair Lawn, N.J., was working in development for the Archdiocese of New York when he first encountered donor-advised funds. Such funds have existed since the 1930s, but they have boomed in the last few years. Both the number of accounts and the amount of money invested in donor-advised funds more than doubled from 2013 to 2017, according to the National Philanthropic Trust.

“Individuals can open a fund and name it, kind of like a personal foundation,” Gerber said. “They then make irrevocable charitable contributions, receive the tax benefit, advise on the fund’s asset allocation, and then recommend grants to nonprofits over time.”

Gerber loved the concept, but he recognized an unmet need — for Catholic-focused donor-advised funds nationwide.

“I wanted to educate people about some of the amazing organizations out there doing great work in and around the Catholic faith,” he recalled.

In 2017, Gerber established the first national charitable organization focused on donor-advised funds for Catholics; in December 2018, this organization became affiliated with the Knights of Columbus to expand the product’s reach and capabilities.

“Working with donor-advised funds is a natural extension of the Order’s work,” Supreme Knight Anderson said. “This offers another opportunity to leverage our experience and further the charitable mission that Father McGivney began in 1882.”

One benefit of a donor-advised fund is the potential tax advantage of giving away a large amount, above the standard deduction, all at once.

Knights of Columbus Charitable Fund offers different accounts for a range of giving levels. Annual fees for standard accounts begin at 0.5% — less than what is charged by the largest organization offering donor-advised funds and significantly less than the largest provider of faith-based donor-advised funds. For individuals just beginning their charitable legacy, Knights of Columbus Charitable Fund offers a starter account for as little as $10 per month.

But what really sets Knights of Columbus Charitable Fund apart from other donor-advised funds is a two-fold Catholic screening. The fund operates in accordance with the guidelines of the U.S. Conference of Catholic Bishops and can make grants only to nonprofit organizations whose work does not contradict Catholic teaching.

“The vast majority of charities do great work, but sadly, there are some wolves in sheep’s clothing,” noted Gerber, now president of Knights of Columbus Charitable Fund. “One example that we uncovered was an international relief group that includes abortions and sterilizations as part of their ‘humanitarian relief ’ efforts.”

Knights of Columbus Charitable Fund protects donors from unknowingly contributing to such organizations.

FORMING PHILANTHROPIC FAMILIES

For Dr. Andrew Abela, provost of The Catholic University of America and a busy father of six, the primary benefit of Knights of Columbus Charitable Fund has been convenience. Having a donor-advised fund has simplified, not complicated, his family’s charitable giving, he said.

Abela and his wife, Kathleen, try to give away 10% of their income each year, and the fund helps them manage their tithing. At the end of past years, they would sometimes realize they hadn’t met their annual goal for giving, and would rush to donate more before the last day of December.

When asked about the charitable giving benefits of working with Knights of Columbus Charitable Fund, Abela stated: “What I like about the donor-advised fund is we automatically send a monthly sum and can recommend grants from it at any time. It’s given a bit more order to what we do.”

Abela is a member of Padre Pio Council 10754 in Great Falls, Va., as well as a board member of Knights of Columbus Charitable Fund. He and his family focus their giving on Catholic education, religious orders and homes that support expectant mothers.

“We have a couple of big charities that we like,” Abela said. “But there are others, too, and it can get complicated, sending out 20 checks in a month.”

Now, the family recommends grants at the beginning of the year, and the fund handles the disbursements.

“You spend maybe a half-hour setting it up, and then it will save you tons of time,” Abela said. “It’s totally worth it.”

Beyond these practicalities, Gerber believes donor-advised funds can change the way Catholic families think about philanthropy.

“The purpose of this is to create your legacy,” he said. “You’re building your own little family foundation.”

The simple act of reframing various donations as the work of a “family fund,” Gerber said, encourages discussions between parents and children about generosity, responsibility and values.

“Include your family, your children in your decision process. It’s not just about making the grant today to an organization; it’s about teaching your children,” Gerber said.

Even small children: Dennis and his wife, Elise, like to ask their young daughters for input on charitable gifts. They sit with them at the kitchen table, explain the donations they are planning to recommend themselves, and discuss where the girls could send “their” money.

“I want them to make their own decisions about giving and I want them to be able to say why they’re doing this,” Gerber said.

As they get older, he plans to make them secondary advisors on the family donor-advised fund. And as they turn 21, he hopes to fund donor-advised accounts naming each of them as primary advisor — charitable nest eggs so they can go forth and give likewise.

For more information about Knights of Columbus Charitable Fund, please visit www.kofccharitablefund.org.

Disclosures: Knights of Columbus Charitable Fund is an independent, nonprofit, public charity with a donor-advised fund program. The value of a donation to a donor-advised fund will fluctuate over time and may gain or lose money, which will affect overall tax benefits generated for donors.

Information provided is educational in nature and is not intended as legal, tax, financial or other professional advice. Knights of Columbus Charitable Fund does not provide legal, tax, financial and other professional advice. You should consult professional advisors concerning the legal, tax, or financial consequences of your charitable activities. Tax information provided relates to federal tax matters only, and availability of certain federal tax deductions may depend on whether you itemize deductions.