Creating an endowment at the Jewish Alliance is a win-win

Would you like to be remembered by future generations? Do you want to leave a legacy? Perhaps you would rather give your dollars to philanthropy than to Uncle Sam? Good news: The Jewish Alliance of Greater Rhode Island can help you realize your goals by helping you establish an endowment fund.

What is an endowment? By definition, an endowment includes money or other financial assets that are given to an organization to be invested. From that amount, donors receive investment income, which is then used for purposes that are determined by the donor, the organization, or both.

Each endowment is funded by tax-deductible donations. The foundation where all the funds are kept is overseen by a board of trustees and managed by a team of professional managers. Currently, the Jewish Federation Foundation (JFF), a part of the Jewish Alliance, oversees about $52 million in assets.

So what types of funds are there at the Jewish Alliance? The two biggest are the unrestricted and restricted funds. Restricted funds allow donors to designate their money for a particular organization or interest. For example, a donor can designate the income from their fund to go to the Jewish Alliance’s Annual Campaign. Currently, the JFF manages 102 restricted funds.

Unrestricted funds are permanent funds for unrestricted use.  For example, a donor can set up an unrestricted fund, and the JFF can allocate that money to help with large, one-time costs, or to go to the Annual Campaign. Currently, the JFF manages 147 unrestricted funds.

Within these two types of funds, the JFF manages a total of 625 endowment funds, broken up into five categories.

There are 128 Donor Advised Funds, which essentially act as a charitable checking account. Donors recommend grants to be paid for from their fund to the nonprofit organization of their choice, and may add to these funds at any time. The Alliance also has 230 Supporting Foundation Funds, which manage endowments solely for Rhode Island’s day schools.

The JFF manages 181 funds for Providence Hebrew Day School’s endowment and 49 funds for the Jewish Community Day School’s endowment.

The JFF also has 18 managed funds, which are funds held for other organizations in the community. Such organizations include the Sandra Bornstein Holocaust Education Center, the R.I. Jewish Historical Association, Congregation Mishkon Tfiloh, Temple Sinai, Congregation Agudas Achim, the Providence Hebrew Free Loan Association, Touro Synagogue, the Jewish Federation of Cape Cod and Congregation Beth Sholom.

So what’s in it for you? Why would you want to set up an endowment fund with the Jewish Alliance? Establishing an endowment fund can offer you a significant tax deduction. For example, you can donate property or other assets and receive a deduction for it, while also earning annual income for life – this is called a charitable remainder trust. You can also donate a life insurance policy, and take a deduction for either the value of the policy and the future premiums you pay, or you can name the endowment fund as an irrevocable beneficiary of a policy.

Additionally, when your assets appreciate, you can give appreciated securities or property to the endowment fund, thereby reducing your capital gains. You can take a deduction for the full value on your income tax.

Setting up an endowment fund with the Jewish Alliance of Greater Rhode Island is easy, and a win-win: You get big tax deductions while helping to sustain our Jewish community locally and abroad. The Jewish Alliance can work with your legal, tax and financial advisers to determine which fund is best suited to your needs.

If you would like to set up an endowment fund, or get more information, contact Trine Lustig, vice president of Philanthropy, at 401-421-4111, ext. 223, or tlustig@jewishallianceri.org.

HILLARY SCHULMAN is a development associate with the Jewish Alliance of Greater Rhode Island.