voice over: [00:00:00] Welcome to Metcalf Money Moment, the podcast, unlock financial clarity and confidence with expert insights to achieve your goals hosted by Jeb Graham, Ethan Hutcheson, and Eric Wymore. Each episode offers decades of combined expertise in wealth management, retirement planning, and more. Join us for practical strategies to inspire your financial journey.

Now your hosts.

Jeb: Welcome to Metcalf Money Moment, the podcast. My name is Jeb Graham, managing partner at Metcalf Partners Wealth Management with co hosts and partners, Ethan Hutcheson and Eric Wymore. And today we have a special guest. It is Annie Berndrette from the Greater Kansas City Community Foundation. Uh, so Greater Kansas City Community Foundation is here in Kansas City.

Uh, and I wanted to, first of all, just introduce you, Annie, and maybe you can tell us a little bit about. Uh, what a community foundation is and, and more specifically about the Greater Kansas City [00:01:00] Community Foundation.

Annie: Yeah, thanks, Jeff. Um, well, I'm happy to be here to talk about charitable giving with you for your clients.

And ultimately Greater Kansas City Community Foundation and community foundations at large are designed to help. Support a specific group of people. So here in Kansas city, our mission is to help connect our donors with causes that they care about and help to grow their money so that they have more money to give.

Um, a quick note, we are actually the third largest community foundation in the country, and there are about 900. So, as far as assets, contributions, and grants out the door, um, we're the third largest. So, that really points to the fact that Kansas City is a center of philanthropy, which is really, I think, exciting.

Jeb: Well, that's super, super impressive, given Kansas City's size versus some other cities out there, that we would be third, third in the country. So

Annie: I agree. I agree. Yeah, absolutely. And really, one of the ways that we're able to do this support of our donors is by [00:02:00] providing charitable accounts. Um, for their giving to help support the causes that they care about.

Awesome.

Jeb: Well, very good. So you, so you mentioned charitable funds, uh, tell us more about the kinds of charitable funds that the community foundation administers and why someone would use a fund for their giving. You know, I know we have a lot of clients that like to give to charity and I think a lot of them, I feel like the, the go to is they just pick a couple of charities and they send money to the charities.

Um, um, On their own, and I don't think a lot of people know about the different things that you can do to to either. I think you're going to talk about kind of front loading contributions to a chair to a foundation account. I also think that the clients just in general, uh. Aren't that educated on charitable giving?

So I think, uh, tell us a little bit about the different types of funds that you guys have.

Annie: Yes. So just like saving for a goal, like retirement, um, clients can open funds with us that help to grow the assets towards the, the goal of giving. And [00:03:00] so the primary type of account that we provide our donor advised fund accounts.

And so those can be paid out to any charity of the clients choosing. And so, uh, they, Invest the assets, they give the assets to the community foundation. We invest those, they grow on their behalf and then whenever they want to make grants out to their selected nonprofits, we administer those grants as well.

And so by. Saving for future gifting, you can grow the assets and have more to give. And so that's really, you know, the infrastructure that we've created in order to help support people's philanthropy. People can do that in a variety of different ways. So you had talked about front loading, you know, some individuals who are charitably inclined while they're saving for retirement, they're also saving for their giving and retirement.

You know, they may know that they're going to be giving to their church a certain percent of their income. And so in their highest income working years. They're able to take those tax deductions for the contributions into their [00:04:00] donor advised funds, grow those assets, and then have that earmarked for their giving and retirement appreciated stock is a common type of asset to give into these accounts as well, because that helps to leverage the clients.

Um, tax savings, they don't have to pay capital gain on the appreciated stock. That stock can go into a donor advice fund and then of course via deduction for the fair market value of those stocks. So

Jeb: theoretically, I know Ethan, Eric and I were talking about this just the other day. Um, you, you could have, say you bought XYZ stock for 20, 000.

And now it's worth 100, 000. So basically you've got 80, 000 of capital gain on that. So if you were just going to sell that, you'd, you'd have 80, 000 capital gain. But what you can do is you can donate that to a donor advised fund. It doesn't even have to go to charity that year. Correct. So basically you're, and you're completely avoiding that capital gain and you're getting a 100, 000 deduction basically for [00:05:00] gifting that stock there.

Annie: Yes. The only caveat I would say that I'm not a tax advisor, depending on your tax situation, you know, all of those kinds of things, but absolutely.

Jeb: So, so is there any time that somebody has to give it to a charity buyer? Could that literally sit there for hundreds of years or is there, is there 10 years, 20 years?

Annie: It could. It could, it could sit there for hundreds of years, you know, we are a community foundation that is very dedicated to getting the money to work in our communities. And so we really do encourage people to identify charities that they want to support. We have philanthropic advisors that can help guide that as well.

If they want to set charitable goals, look at what they're wanting to achieve and have them. Philanthropic advisors within our organization, introduce them to, um, organizations that support those values. We have that, you know, so we have the full infrastructure to help the clients give.

Jeb: And they could, so that could become a generational thing for a family if they wanted it to, where you have, cause you can change over time who's directing.[00:06:00]

The charitable fund as well, correct?

Annie: Yeah, absolutely. Yes. So we have successor advisors. Um, and so we do see, you know, family giving, you know, memorial funds, things like that, um, that grandparents started their kids continue to administer and now they're bringing in, you know, the 3rd or 4th generation with their grandkids, great grandkids.

It's beautiful to see.

Eric: Hey, Annie, there sounds like there's a lot of tax strategies that are involved with, with giving and with the foundation. Are there any unique strategies that you see your clients or our clients implement?

Annie: That's a great question, Eric. Anytime that there is a taxable event on the client's horizon.

So whether that's a business sale, inheritance, even a sale of real estate, these are all times in which a client should be Thinking about, um, using a donor advised fund or similar, uh, charitable giving account to be able to avoid some of the taxes on that and be able to fund their giving [00:07:00] for the future.

Um, we do specialize at unique assets. And so even business interest, private equity, you know, there's a lot of different types of assets out there that aren't your typical stocks, bonds, mutual funds. Um, and so at the community foundation, we specialize in those unique assets.

Eric: Nice. And you mentioned, um, appreciated stock that can be donated.

Uh, you mentioned unique business interests. What are some other, um, asset classes that can be contributed to a donor advice fund? Like I know cryptocurrency and Bitcoins, uh, taken off right now. Um, it can clients just cut a simple check and push cash through what, what is the, uh, abilities of, of, of those funds?

Annie: So, yes, Ethan, we are able to accept cryptocurrency. We're able to accept, of course, checks. Um, cash, appreciated stock bonds, mutual funds, ETFs, we have, um, even, uh, derivative, alternative investment. Um, so really across the board, 1 of [00:08:00] our. We pride ourselves and being flexible at the community foundation and so we really take, um, each donor situation on a case by case basis.

So, for any type of unique asset. Um, that a donor is looking at giving, we really try to work with them in order to be able to accept

Ethan: that. You know, Annie, I've been to several events with the Greater Kansas City Community Foundation, been involved in other charities that use their funds. Um, and one thing that keeps popping up a lot is the word bunching.

And I wonder if you could maybe spend a minute or two kind of explaining what bunching means.

Annie: Um, yeah, thanks for asking. That's a great question. So, of course, there are the large philanthropists who have a lot of money to give away and, and are, are having those assets at work. But for the everyday investor, bunching is a very common strategy that we see utilized in donor advised funds.

So that means that a client is taking a standard deduction in some years and then in other years, maybe every other, every third. [00:09:00] Year, they are itemizing their tax return, and in those years, they're going to be appreciate. Typically, we're seeing appreciated stock donated or cash or any other type of asset that they can itemize and write off on their tax deduction.

And so those assets are then invested and sometimes they're granting those out for the next year. So in other words, if somebody gives 10, 000 a year, they're putting 30, 000 a year every three years in and the other years they're itemizing their tax return.

Eric: And correct me if I'm wrong, but the year that they donate that 30, 000, even though they're going to split that into the next three years, they get the 30, 000 deduction.

Is that correct? You've

Annie: got it. Yep, exactly. Um, and they get the 30, 000 deduction and maybe that was a 10, 000 investment that has 20, 000 appreciated stock. You know, the capital gains, like we were talking about before. So we've, we've talked a lot about donor advice funds, which is the primary type of account that we offer, but we [00:10:00] also do offer designated funds and scholarship funds.

And so designated funds are a fund that is designated to one charity or, um, one particular institution. So that could be a church. Or an area of interest for your donor and a scholarship fund is, of course, to support students at a very critical time in their life, really being able to lay the groundwork for their future.

It's very rewarding for donors, and it's wonderful for students. And as a quick note, we actually are in our application process. So we both accept the assets for scholarship funds. We also administer the application for. The scholarships, and we handle all of the communication with students. So right now, if any of your listeners have college students, grandkids, nieces, nephews, neighbors, anybody that they think could benefit, they can go to grow your giving dot org slash scholarships.

And some scholarship deadlines are in [00:11:00] February. So I do encourage anybody listening to to get on there, take a look. They can create a user profile and it will populate any scholarship that they are eligible for based on what they enter. So. That's a really wonderful way that the community foundation is able to lay the groundwork for a brighter future for students.

Jeb: That's an awesome benefit. So, so real quick, how, how many different scholarships do you know?

Annie: We have hundreds and we actually have ones that are nationwide. Um, we are a nationwide community foundation. We do focus here in Kansas city, uh, but we have hundreds and, um, depending on the criteria, you know, they're not all Collegiate scholarships, many of them are, but, um, there's a wide range of scholarships.

So they're not all necessarily, um, yeah, scholastic base. There's just a wide range.

Jeb: So if you, if we were a donor, if we, if one of our clients was a donor and wanted to start a scholarship fund, um. You know, is there a minimum that a scholarship needs to be like, [00:12:00] can you do a 500 scholarship? Can you do, does it have to be a 5, 000 scholarship?

Annie: The minimum account size for the overall scholarship fund needs to be 25, 000, but the scholarships out the door don't have that minimum. And so the actual account size that the investment needs to be is that minimum of 25, 000. A quick note here on how one can fund Fund that, um, qualified charitable distributions from IRAs are eligible in both designated funds and scholarship funds, whereas you cannot put that in a donor advised fund.

And so if you have a client who has an IRA and they're not meeting those required minimum distributions, they can do a qualified charitable distribution, a QCD, and put that into a scholarship fund or a designated fund.

Jeb: When it comes to our clients, if they wanted to do business with the greater Kansas city community foundation, and they wanted to set up an account, can you talk about how they can either go direct and when they would go direct or when, when, and [00:13:00] how they could set, set this up through their financial advisor?

Annie: Absolutely. So we have different avenues of investing. And so if the account is under a hundred thousand dollars, it can be invested in our low cost investment pools. And that's similar to a 401k. We have. Aggressive to conservative investment pools. So just like you, you do on your selection within a retirement plan like that, you can do a custom mix.

If it's over 100, 000, then you can use your financial advisor to manage those assets. And so that. They are selecting the investments within your, your designated fund scholarship fund or donor advised fund. Um, and you're working with your financial advisor to get that invested.

Jeb: So if it's, if it's under a hundred thousand dollars, they're going direct to greater Kansas city community foundation.

And if it's over, they can still go direct to Kansas city community foundation, or they can use their financial advisor to manage the funds as well. Correct?

Annie: Exactly. And in either one of these situations, we have a donor portal [00:14:00] Which each donor has access to in order to administer their grants. And so you can set that up to be a monthly grant.

If you know that you give to your church each month or give to certain organizations on a monthly, quarterly or annual basis, or you can do one time grants on there as well. And you can give your financial advisor access to that portal. Um, or have that, you know, take care of that all on your own.

Jeb: Well, Annie, thanks so much for coming on today.

Uh, so just a reminder website for the greater Kansas city community foundation is grow your giving. org. So that's whether you want to go apply for a scholarship, whether you want to set up a donor advised fund or a direct fund, uh, I think you can go to grow your giving and at least check out greater Kansas city community foundation.

And, uh, yeah. Ethan, Eric, thank you. And this has been a great, uh, great few minutes that we got to got to spend together. And this is Metcalf money moment, the podcast, and we'll see you soon.

voice over: Thanks for tuning in to Metcalf Money Moment, the podcast. We hope today's episode [00:15:00] provided valuable insights to help you unlock financial clarity, confidence, and peace of mind. For more expert advice and resources, visit metcalfpartners. com. Until next time, make every money moment count.

Jim Graham, Ethan Hutchison, and Eric Wymore are registered representatives with and securities offered through LPL Financial member FINRA SIPC. Investment advice offered through WCG Wealth Advisors, a registered investment advisor, WCG Wealth Advisors and Metcalfe Partners Wealth Management is a, are separate entity entities from LPL Financial.

The opinions voiced in this podcast are for general information only, and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

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