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The section of the Internal Revenue Code that designates organizations as charitable and tax-exempt. Organizations qualifying under this section include religious, educational, charitable, amateur athletic, scientific and literary groups, and organizations involved in the prevention of cruelty to children or animals.
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A fund held by a community foundation where the donor, or designees, may recommend eligible charitable recipients for grants from the fund. The community foundation’s governing body must be free to accept or reject the recommendations. This is a flexible fund for donors wishing to remain involved in grantmaking.
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Our term for a legal or financial professional who advises clients on important decisions.
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| The amount of capital or principal money, stocks, bonds, real estate or other resources controlled by a person, association, corporation or foundation. |
A gift that you make in your will to an individual or a charitable organization. You can designate a dollar amount, a percentage of your estate or the remainder (residue) to be distributed to an individual or a charitable organization.
A grant that is made on the condition that other monies must be secured, either on a matching basis or via some other formula, usually within a specified period of time, with the objective of stimulating giving from additional sources.
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| An organization that operates exclusively for the benefit of the community by supporting charitable causes. These are generally exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, and are eligible to receive tax-deductible charitable gifts. |
| You can give cash or other property to a charity in exchange for a charitable gift annuity. It is a contract between you and the charity (the charity has to be licensed to offer a charitable gift annuity). The charity is obligated to make periodic payments to you as provided for in the gift annuity agreement. You will receive a charitable deduction in the year that you establish the charitable gift annuity. Contact Yvonne Maher at The Pittsburgh Foundation at 412.394.2644 for additional information relating to the tax consequences of a charitable gift annuity. |
| A charitable trust that you can establish in which the charity is the “lead” beneficiary. |
You can establish a charitable trust in which you and/or others retain the right to receive income for life or a period of years, with the remainder to be distributed to charity. This trust is most valuable when funded with appreciated property because the sale of appreciated assets held in the trust is not subject to capital gains tax. You will receive a current charitable income tax deduction for the year in which the trust is established. With an annuity trust, you will receive a fixed payment. With a unitrust, you will receive payment based on the fair market value of the trust as calculated on an annual basis.
Community foundations are tax-exempt public charities serving individuals who share a common goal: to improve the quality of life for all citizens in their region. Individuals, families, businesses and organizations establish permanent endowment funds, which the Foundation invests and administers. Community foundations focus on specific geographic areas.
A type of private foundation that receives its funding from the for-profit company whose name it bears, but is legally an independent entity.
The international membership association that serves the public good by promoting knowledge and growth and enhancing responsible and effective philanthropy. |
A charitable gift annuity for which the payments begin more than one year after you have established the gift.
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Funds typically created to ensure that support will be provided to one or more specific charitable organizations named by the donor. Designated funds often are endowed in perpetuity with the income used to support the organizations on an ongoing basis.
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An individual or organization that makes a grant or contribution to a grantee. Also known as grantor.
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Funds which enable donors to make suggestions regarding the organizations to which grants can be made. This type of fund can support any not-for-profit charity in the United States. The donor may determine what the purpose of the fund will be after their death, or appoint unlimited successor advisors who will decide its distribution annually. As with all Foundation grants, the charities recommended must be bona fide nonprofit organizations, and grants are subject to approval by The Pittsburgh Foundation’s Board of Directors.
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A fund held by a community foundation where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific public charities or areas of interest.
In grantmaking, this speaks to the practices one applies to reviewing grant requests prior to their approval. It generally includes establishing the charitable status of the grantee, the charitable purpose of the grant, and the financial and organizational capacity of the organization to undertake the proposed activities.
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Cash or property donated to the Foundation with the intention that it be invested to generate income for philanthropic purposes. The principle is kept intact, and only a portion of the earnings is available for other purposes, such as grantmaking.
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| The annual tax of 1 or 2 percent of net investment income that must be paid to the IRS by private foundations. |
Funds which allow donors to support a broad area of concern. Donors may want a fund to benefit children, the arts or the elderly, for example. Specific charities are not named, but all grants from the fund are directed toward programs that address the donor's field of interest within the greater Pittsburgh region.
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An amount of money given to an organization or person in order to perform charitable or tax-exempt services.
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The assessment of the progress of the activities funded by the Foundation, with the objective of determining if the terms and conditions of the grant are being met, and if the goal of the grant is likely to be achieved.
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The recipient of a grant. Also known as grant recipient, donee or beneficiary.
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A statement of a Foundation’s goals, priorities, criteria and procedures for applying for a grant.
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Specific projects where the Foundation has united key community leaders, local and national funders and/or regional public service organizations to address a specific issue, such as public education or substitute teacher shortage.
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A donation of goods or services rather than cash or appreciated property.
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The federal agency responsible for the regulation of taxation of individuals, businesses and organizations in the United States.
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| Gifts to The Pittsburgh Foundation are irrevocable, meaning that the gift and all related future earnings are no longer your assets. Your gift becomes the property of The Pittsburgh Foundation, and you cannot impose any restrictions or conditions that prevent the Foundation from furthering its charitable mission. This is done to ensure your full tax deduction at the time your gift is made. |
A grantor’s letter or brief statement indicating intention to make a specific gift.
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A method of grantmaking where a small amount of money is given with the express purpose of attracting funding from other sources, or of providing the organization with the necessary tools to raise other funds.
The minimum requirements for the governance, structure and activities of community foundations. The Community Foundation Leadership Team of the Council on Foundations approved the standards in September 2000.
A fund where monies are received and redistributed with little or no dollars remaining with the foundation. An example would be a capital campaign fund. Also known as a pass-through fund.
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A contribution given to cover an organization’s day-to-day, ongoing expenses, such as salaries, utilities, office supplies, etc.
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PGDC is a free online service for advisors and donors that provides you with Email News Alerts, including concise summaries and links to detailed commentary regarding the latest IRS pronouncements, court decisions and legislative developments affecting charitable taxation. PGDC also provides software for you to run calculations for planned gifts. Call Yvonne Maher, Director of Development, Gift Planning, at 412.394.2644 to register.
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A promise to make future contributions to an organization.
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A non-governmental, nonprofit organization with funds (usually from a single source, such as an individual, family or corporation) and program managed by its own trustees or directors. Established for charitable giving purposes. Private foundations are tax-exempt under Section 509(a) of the Internal Revenue Code.
A nonprofit organization that is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, and that receives its financial support from a broad segment of the general public.
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Also known as a letter of inquiry, this is a brief letter outlining an organization’s activities and a request for funding. This letter allows the Foundation to determine if there is sufficient interest to warrant submitting a full proposal.
Nonprofit membership associations of foundations and related organizations that share a common goal: to strengthen philanthropy in a distinct geographic region.
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Assets restricted by a donor’s trust agreement.
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A large fund at the Foundation with its own staff. Supporting organizations can be established with a gift of around $2 million.
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Organizations that are not required to pay state and/or federal income taxes. Organizations other than churches seeking recognition of their status as exempt under Section 501(c)(3) of the Internal Revenue Code must apply to the Internal Revenue Service. Charities may also be exempt from state income, sales and local property tax.
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A legal device used to set aside assets of one individual for the benefit of one or more people or organizations.
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| Funds that allow the foundation to determine where grants will do the most good. Unrestricted funds offer maximum flexibility to react to changing needs in the community. | |
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