Reflecting on best practices by FJC and its imaginative donors, FJC Chief Executive Officer Sam Marks wrote “Donor Advised Funds and Impact Investing: A Practitioner’s View”, which was accepted for publication by The Foundation Review in their December, 2022 issue focusing on impact investing.  The journal is the first peer-reviewed journal of philanthropy, written by and for foundation staff and boards. 

The article provides a brief overview of FJC’s origin story and the establishment of its Agency Loan Fund as a bespoke impact investing vehicle, which allows participating donors to invest in a pool of loans to nonprofit borrowers that help them bridge cash flow and achieve their missions.

Marks also highlights some of the innovative transactions FJC has executed with its donors, including a 0% interest revolving line of credit for Brighter Tomorrows, the refinancing of the Tenement Museum’s mortgage, accounts that allow foundations to participate in crowd-sourced small business loans, and the recently closed revolving fund for the Fortune Society.    

“In the end,” Marks writes, “the potential for DAF sponsors to accelerate impact investments may also come from their ability to aggregate not just dollars but inspiration.”

Read the full article here.

Allison van Hee has joined the staff of FJC as Senior Manager for Lending & Fiscal Sponsorship, a new position.  In her role, Ms. van Hee will grow FJC’s portfolio of borrowers and organizations seeking fiscal sponsorship by cultivating and maintaining strong relationships with industry partners.

A longtime nonprofit practitioner, Ms. van Hee comes to FJC from the Joint Ownership Entity NYC, a nonprofit asset management company that pooled the real estate portfolio of a dozen community development corporations, helping them achieve scale and efficiency.  She held previous positions at the NYC Department of Housing Preservation & Development (HPD) and the Urban Homesteading Assistance Board (UHAB).  She was also a co-founding partner of 3b Bed and Breakfast, a cooperatively owned boutique hotel and intentional community space in Brooklyn, NY.

FJC –A Foundation of Philanthropic Funds (FJC) is a boutique public charity that offers a diverse menu of philanthropic services to a range of stakeholders. With over $380 million under management, FJC applies its financial and operational expertise to support Donor Advised Funds (DAFs), fiscally sponsored organizations, and many other philanthropic vehicles that enable nonprofit organizations and their supporters to achieve their missions. Its Fiscal Sponsorship Program incubates nonprofit organizations and projects under its 501(c)(3) umbrella, collecting tax-deductible contributions and disbursing grants and vendor payments as needed.  The program has disbursed over $80 million to over 400 organizations since inception. 

A longtime innovator in impact investing, FJC allows donors the opportunity to invest a portion of their DAF accounts in loans to a diversified pool of nonprofit organizations.  Since its inception in 1995, FJC has deployed over $364 million in loans to charities around the globe.  Loans from FJC help nonprofits acquire properties, bridge public sector contract receivables, and launch new initiatives.  In her role, Ms. van Hee will engage with prospective borrowers through all stages of the loan origination process, from preliminary conversation through closing.

“We are thrilled to welcome Allison to FJC,” said Sam Marks, Chief Executive Officer of FJC. “As an entrepreneur and nonprofit practitioner herself, Allison will build the trusted relationships in the field that will help us grow and diversify our nonprofit partners and maximize our impact.”

Interested in connecting with Allison? Reach out at vanhee@fjc.org

FJC  is pleased to announce the appointment of Brinda Ganguly to its Board of Directors. With over 20 years of experience in the investment space, particularly in impact investing, Brinda will bring her deep expertise and commitment to social change to help guide FJC’s growth and strategic direction.

Brinda serves as Executive Vice President for the Strategic Investments Group at New York City Economic Development Corporation. She has held key positions at Elevar Equity, The Rockefeller Foundation, Living Cities, Open Society Foundation, Citigroup, and Charles River Associates. Brinda holds a BA in economics and Spanish from Bryn Mawr College and an MBA from Columbia Business School.

“We are thrilled to add Brinda, a longtime, committed impact investing professional, to FJC’s Board of Directors,” said Sam Marks, Chief Executive Officer of FJC. “As a practitioner, Brinda has helped the field accelerate and evolve, and we’re excited that she will now guide FJC’s continued evolution.”

Brinda Ganguly said: “It’s clear that a platform like FJC has enormous potential to make a difference when it can harness the right partners and resources. I look forward to working with Sam, the FJC board, and the team to see what’s possible.”

FJC –  A Foundation of Philanthropic Funds (FJC) is a boutique public charity offering donor-advised funds, nonprofit lending, and fiscal sponsorship services. FJC has a long-standing reputation as a catalyst for impact, providing flexible and efficient fiscal sponsorship services and uniquely customizable donor-advised funds to its stakeholders. Donor-advised funds (DAFs) allow individuals and organizations to make tax-deductible contributions to FJC, which are then distributed to charities the donor recommends. Fiscal sponsorship enables new and innovative charitable projects to receive donations and grants under FJC’s legal and financial umbrella, allowing them to focus on their mission and impact. The organization has been a pioneer in bringing impact investing to the DAF industry, deploying funds in its donors’ accounts as bridge loans, revolving funds, and recoverable grants.

Brinda’s appointment to the FJC Board of Directors reinforces the organization’s commitment to leveraging finance as a tool for social change and expanding its impact.

Grant Recommendations & Distributions: December 16, 2022.  This is the deadline for this year’s grant recommendations!  We know that many of your favorite charities plan big year-end campaigns.  Please help us make these critical resources count for your nonprofit partner’s fiscal year by making your recommendations before this deadline.  

Please note that grant recommendations made after December 16 (5PM Eastern Standard Time) may be approved and processed early in 2023. 

Contributions: December 31, 2022.  For your giving to FJC to qualify for a 2022 tax deduction, we must receive your contributions by December 31. Please note that December 31 falls on a Saturday this year, so in some cases we will need to modify our standard practices.

• Electronic transfer recommended.  We recommend that cash contributions are sent by credit card, ACH, or wire transfer and received by FJC by December 31. (Please note that ACH transfers can take up to 5 business days to settle, so please plan accordingly). Using electronic payments ensures the most efficient crediting of your account. Please contact FJC for instructions. 
• Contributions by check.  If you make contributions to your account by check, please note that checks that are sent via U.S. mail must be postmarked by December 31  to qualify as a 2022 tax deduction. Please note that due to the 31^st falling on a Saturday, deliveries by other means (such as FedEx, DHL or others) must be received by Friday, December 30. 

Please make note of our NEW PERMANENT office address:

FJC – A Foundation of Philanthropic Funds

225 West 39^th Street, 12^th Floor

New York, NY 10018

(212) 714-0001

• Contributions of securities and mutual fund shares. These should be made as soon as possible and received by FJC by Friday, December 30. (Please note that the 31^st is a Saturday, and markets will be closed). Please notify us in advance of the transfer so we can promptly credit your fund. 
• Contributions of other assets.  Real estate, restricted securities or privately held stock can be made, but require long lead times, so let us know ASAP.

Questions?  Contact us at fjc@fjc.org. 

As the end of the year approaches, FJC CEO Sam Marks interviewed FJC Board Member, Neal Myerberg, Principal at Myerberg Philanthropic Advisors, who consults with charitable organizations, foundations and philanthropists.  A transcript of the conversation, edited for length and clarity, is below.

Please note that FJC does not offer tax advice; any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequence of his/her gift.

It’s a time of real uncertainty in the markets, with equity markets down for the year, plus rising inflation putting downward pressure on bond prices.  At a time when many donors are seeing their portfolios decline, how should donors think about year-end giving?

There’s no question that investors may not be feeling as flush as they did in prior years.  That said, long-term investors may still have capital gains from securities they bought many years ago.  It’s worth asking the question to their tax attorneys or planning professionals.

It’s also good to remember that cash and appreciated stock aren’t the only assets that can be donated.  FJC has accepted real estate, cryptocurrency, illiquid or lightly traded stock in advance of an IPO.  These items can take a bit more lead time for be approved by FJC’s board committees, so I’d definitely encourage reaching out to Sam or Regina soon if people are looking to make these donations before the end of the year.

Are there any tried-and-true rules of thumb that philanthropically minded families should keep in mind, even in a down market?

Regardless of what the market is doing, it’s always a good time to plan.  You might review your account documents and make sure that you have Successor Recommenders identified. And maybe it’s a good time to involve those successors—family members, the next generation—in your giving.  Some donors engage in a family-wide “strategic plan” for their philanthropy. FJC encourages this and can even allow some or all of the costs of strategic consultants to be paid with funds in a donor’s DAF account.

For so many donors we work with, philanthropy is part of their legacy.  Whether they are identifying beloved organizations for final distributions, or setting up a Board-designated fund to live on in perpetuity, FJC is really committed to meeting its donors where they are and creating a customized solution for them. 

Could you offer one or two planning techniques that could be highly impactful for increasing our donors’ philanthropic capacity? Any little-known tactics that you wish more DAF account holders would consider?

FJC’s donors probably know that the Treasury Department has reinstated annual required minimum distributions for people who have inherited Individual Retirement Accounts. This is basically a reinterpretation of 2019’s Secure Act, which eliminated the “ten-year stretch”.  In plain language, this means that under this change someone inheriting an IRA who does not fall into the category of exceptions has to take all Required Minimum Distributions (RMDs)–and pay taxes on them—within 10 years, instead of over their whole lifetime. 

IRA owners that want their beneficiaries to receive benefits for life are interested in considering other alternatives.  One solution may be to direct distribution of all or a portion of the IRA to a charitable remainder trust (CRT) after the lifetime of the IRA owner.  The trust would be constructed to make fixed rate payments to one or more beneficiaries for life. Thus, the beneficiaries of the IRA owner would not be limited, as direct heirs of the IRA, to a ten-year payout. At the end of the term of the CRT when all beneficiaries have passed away, the remaining assets may be distributed to a family DAF for recommendations by the next family generation; e.g. the children or heirs of the lifetime beneficiaries of the CRT.

Anything you’d like to highlight about our ever-changing tax code?

While the estate and gift tax unified credit continues to increase year-by-year, the provisions governing annual increases will sunset at the end of 2025.  Beginning in 2026, the unified credit will drop to approximately $6.2-6.5 million ($5 million base in 2010 indexed for inflation through 2025) or such amount as shall be enacted before then to govern estate and gift taxes from and after January 1, 2026.  In addition, the maximum federal gift and/or estate tax rate may increase from 40% to 45%., Taking advantage of the current unified credit amounts ought to be considered in estate planning by the end of 2022 and over the following three years. 

As we look to the decade ahead, my husband and I have been thinking a lot about how our current and future philanthropy can continue to build on our life’s work, mine in local and global social justice, his in education and both of us in moving toward a more just and equitable city/nation/world.  We are now at the life stage when we are planning for the legacy we can leave to our adult children and grandchildren and to the causes we care about.  We are truly fortunate that we can consider philanthropy as a part of that legacy.

We’ve had a donor advised fund account at FJC for over twenty years, and during this time we have used it to make dozens of grants each year to organizations we know well and whose work we admire.  This has included, for me, regular annual gifts to  American Jewish World Service which I was privileged to lead for 18 years and where I still do some work; Surprise Lake Camp, the nation’s longest-running Jewish sleepaway camp, with which my family has had a relationship for over one hundred years; and SAJ, our synagogue for the last 52 years. 

It has also included gifts to such significant organizations, inside and outside the Jewish community, as the Equal Justice Initiative, the Nation Fund for Independent Journalist, the American Civil Liberties Union, Hazon, Avodah and others. In addition, we have given substantial amounts of money to progressive tax-exempt 501(c)(3) voter mobilization organizations like Movement Voter Fund or Focus For Democracy.

As we think about issues of succession and inheritance, we are taking the time to think bigger and more ambitiously about what our philanthropic resources can do, and we are working with the team at FJC to take some of our ideas and put them into practice, acknowledging both our individual and our joint interests

I am in the process of drafting a will that will provide bequests to my three children and eight grandchildren and to my current and future great grandchildren, and then fund a family DAF account with my three children as authorized signatories.  In an accompanying memo to the will, I am doing two things.  I am letting them know what some of my causes are in case they want to keep some of those on their list and—more importantly—I am telling them how I hope the fund will operate.

I have tried, with my husband, to prioritize social justice and anti-racist organizations like the Southern Poverty Law Center and the Equal Justice Initiative, to protect the human rights of all marginalized populations, and to address the immense challenges to voting rights, to immigrant rights and to climate change.  I hope that the Fund will consider making small closeout grants to some of the international organizations I have come to know and support through AJWS like Minga Peru, Beyond Borders, Aegis Trust, Fonkoze and UDEFEGUA.

I am urging my children to decide how long they want to keep the fund alive.  I am counting on their involving the next generation in their funding considerations, create opportunities to discuss different options for these charitable dollars, and work to come to consensus about their decisions, but I’m also realistic. My kids have been warm and loving siblings, but their priorities may evolve in different directions.  So, if they feel that the process is causing conflict and they  want to divide the DAF account into three separate funds, that’s fine with me too.

My husband Andrew Lachman is taking a different planning approach with FJC. A longtime advocate and practitioner in public education, Andrew is passionate about supporting innovations in local school districts around the country that lead to demonstrated learning improvement.  He is bringing together a half-dozen experts with whom he has worked or whose work he admires who will help guide this national strategy.  This initiative is a work in progress.  Andrew is anticipating a family inheritance soon, and depending on a few factors, it’s possible he may be able to fund this effort with enough resources for it to have meaningful impact over a long period of time, starting while he is still alive.  How long should the work continue? Who should drive its activities?  Will it have paid staff? These are questions that are still to be determined, and we are working them out with the staff at FJC, including whether there may be a role for FJC in the initiative’s future stewardship.

My husband and I have led incredibly meaningful lives of public service, which have continued even as we have left our CEO jobs.  For all of our accomplishments, we know the work of making a better world is never truly done.  So our conversations about estate planning also mean talking about philanthropy.  We believe that inheritance is about more than just money and real estate; it’s an opportunity to impart values and influence what carries on to future generations.  That is what we hope we are doing with these decisions.

FJC’s blog series, “Why I Give…And How,” gives voice to some of our most committed and imaginative donors.

The author Ruth Messinger served on the New York City Council from 1978 to 1989, representing the Upper West Side, and served as Manhattan Borough President from 1990 to 1998.  She was the President of American Jewish World Service from 1998 to 2016.

Please join us in welcoming the following new staff to FJC.

Natalie Cimino, Program Assistant, joined FJC soon after graduating Magna Cum Laude from the Dual Degree Program between Trinity College Dublin and Columbia University from which she received a BA in Religion and a BA in Middle Eastern and European Languages and Culture. As Program Assistant Natalie will assist on the day to day operations of the Fiscal Sponsorship Program, including processing disbursements, performing due diligence on prospective applicants, and updating program participant reporting.

Sophia Trombold, Grants Administrator, graduated from Wesleyan University where earned a BA in both American Government and Hispanic Literatures and Cultures. During her time at school, Sophia worked with a variety of non-profit organizations, involving herself in holistic criminal defense practices, innovative solutions to housing insecurity as well as language advocacy.  In her role as Grants Administrator, Sophia will administer the day to day operations of FJC’s grantmaking, including grant approvals, grant and organization due diligence, the disbursement process, and donor relations.

Contact information for Natalie, Sophia, and all of the FJC staff can be found on the About Us page.

We are happy to introduce the FJC community to the new faces and new roles that will bolster our team as we respond to the urgent needs of the nonprofit community.

Tim Nicol has been promoted to Senior Manager, Finance & Investments.  Tim joined FJC in 2015 and has become an integral part of our finance team, overseeing a breadth of FJC’s financial operations and stewarding relationships with multiple financial institution partners.  Please join us in congratulating Tim as he grows into a broader management role. 

Karina Xelo has been promoted to Grants Administrator.  Karina started with FJC in 2019, as Administrative Coordinator, and she was known for years as “the voice of FJC” for donors and partners calling our office.  We are thrilled that as Grants Administrator, Karina has stepped into an even more critical donor-facing role, coordinating the Board-approval of weekly grant recommendations and troubleshooting grant disbursements.

Please also welcome two new staff to FJC:

Rachel Goldman, Program Assistant for the Fiscal Sponsorship Program, joined FJC soon after graduating with a Bachelor’s Degree in Psychology with a minor in History from Clark University, where she studied health systems and the challenges of implementing effective programs in underserved communities, including mental health. Rachel is passionate about writing, and her published work has covered topics as varied as long form essays, playwriting and analyses of popular culture. 

Jasmina Uka, Administrative Coordinator, earned a BA in Political Science and minor in Legal studies with a Manga Sum Laude distinction at the City College of New York. Throughout her time in college, Jasmina has been active in various voluntary clubs and programs, serving on the Alumni Board of the S Jay Levy Fellowship, which supports students with strong academic performance records and pronounced career aspirations. Jasmina has seen firsthand the impact of non-profit organizations and looks forward to accelerating her non-profit career at FJC.

For more information about our staff and board, as well as our latest financial statements, please visit our About page.

Donors large and small can amplify their impact with more intentional, strategic approaches to their philanthropy.  This was the major takeaway from a recent webinar with Lauren Katzowitz Shenfield, founder and principal of Philanthropy Advisors, LLC.  The webinar was moderated and hosted by Sam Marks, Chief Executive Officer of FJC – A Foundation of Philanthropic Funds.

The webinar is first in a series in which FJC, a boutique foundation of Donor Advised Funds (DAFs) and other philanthropic accounts, provides access to expertise from seasoned philanthropic consultants.  As a commitment to making philanthropic dollars more effective and meaningful, FJC allows its donors to pay for limited engagements with philanthropic consultants using funds in their Donor Advised Fund (DAF) accounts.

Ms. Shenfield’s consultancy works with individuals, families, and private foundations at the intersection of personal, family, and philanthropic goals.  “The conversation always starts with values,” she explains, “because that underlies the entire practice of philanthropy.”  This is true whether she is working with donors who want to begin their philanthropic journey or with long-time donors who have amassed significant assets, the conversations always start with values.

The webinar presented some case studies of client relationships that resulted in more meaningful and effective philanthropy.  These included a family with multiple siblings who needed support aligning their priorities in the wake of a patriarch’s passing, and an individual who benefited from both focus and skill-building in developing a strategy.

Mr. Marks spoke of the way Ms. Shenfield’s practice complements the resources and expertise at FJC.  “Our staff and our board members are always happy to brainstorm and bring our expertise and relationships to our donors,” observed Mr. Marks, “but sometimes donors need a more sustained, strategic engagement, and that’s where you really can add some value.”  

In terms of advice that donors can use to start their journey immediately, Ms. Shenfield suggested that donors:

• Seek truth – about yourself, your family and others who might be involved.
• Prioritize – make your plan important in your life, and don’t let it sink to the bottom of your to-do list.
• Avoid Distraction – engage in a giving practice that draws on your skills and expertise.

Finally, building on her early career as a journalist, Ms. Shenfield recommends that donors start with the “5 W’s”: Who should be involved your giving? What do you care about? When do you want to make grants, in your lifetime or do you want them to last in perpetuity? Where do you want to have an impact?  And why?

Ms. Shenfield’s long history working with FJC includes customized philanthropic solutions for clients.  In consultation with Ms. Shenfield, FJC hosted for several years an awards program on behalf of Anonymous Was a Woman, which provides grants that enable women artists, over 40 years of age and at a significant juncture in their lives or careers, to continue to grow and pursue their work.  FJC also acted as the fiscal sponsor for Toby Perl Freilich,producer of “Inventing Our Life,” a documentary film about the kibbutz movement.

For more, view the full webinar here.  The recording includes the full Q&A session that covered topics such as: the use of DAFs compared with private foundations, impact investing, the mechanics of succession for DAFs, and more.

In anticipation of possible changes to U.S. Tax Code, FJC CEO Sam Marks interviewed FJC Board Member, Neal Myerberg, Principal at Myerberg Philanthropic Advisors, who consults with charitable organizations, foundations and philanthropists.  A transcript of the conversation, edited for length and clarity, is below.

Please note that FJC does not offer tax advice; any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequence of his/her gift.

Sam Marks: We know that changes the U.S. tax code may be coming, but we still don’t know which policy proposals will become law.  Should FJC donors be planning for a future that’s still uncertain?

Neal Myerberg: Yes.  While we still don’t know many of the details, the general shape of the coming tax reform is coming into focus.  There is a lot that FJC donors can do in 2021, particularly as it relates to charitable giving, that could position them well for 2022 and future years.

Sam Marks: So, what do we know and what don’t we know?

Neal Myerberg: As of October 2021 there are still some key differences between the Biden Administration tax proposals and what’s under discussion in the U.S. House of Representatives.  We can expect a lot of horse trading and negotiations in the coming months. The U.S. Senate will also play a role in tax legislation.   

So the exact details are still to be determined, but there are a few areas where it appears that consensus is emerging in terms of what may become law next year.

The first relates to income tax rates.  Proposed changes include raising the top individual federal income tax rate to 39.6% from its current level of 37% and extending the 12.4% portion of the Social Security tax — which is shared by employers and employees — to earnings over $400,000. Currently, wages up to $137,700 are subject to the tax.  Biden has also called for the federal capital gains rate to rise to 39.6% for taxpayers with income over $1 million. Currently, wealthy investors face long-term capital gains rates of up to 20%.  The House is proposing different rates and mechanisms, but their proposals also anticipate increased tax rates.

So there seems to be consensus from DC policymakers that income and capital gains rates are likely to go up. 

The second major change we can anticipate is to the estate tax.  The Biden Administration would eliminate the step-up in basis, which allows heirs to receive assets valued as of the date of death as basis for subsequent sales. Instead, any capital gains from the sale of inherited assets would be subject to tax using the decedent’s basis which if it were to be implemented would require wealthy households to make significant changes to their estate planning.  The Administration also proposes to reduce the amount that an individual can transfer free of estate and gift taxes from $11.7 million (in 2021) to $3.5 million for transfers at death and $1 million in lifetime gifts.  The tax rate above the exempt amount may be 40% or higher.  Again, the House plan differs considerably (and does not advocate eliminating the step-up in basis), but it also proposes reducing the exemption level from $11.7 million to $6 million, among other changes.

 The specifics are still uncertain, but it seems clear that more families will be subject to the federal estate tax, and probably at higher rates.

Sam Marks: So given that these changes are coming, what planning ideas should families be exploring with their advisors?

Neal Myerberg: I have four general planning suggestions.

One, harvest long-term capital gains before the end of 2021.  If you have appreciated assets, whether it’s publicly-traded stock or something else, you may want to take steps to realize those gains before the end of the year. Donating them to charity may also make sense for some families. Donations may be outright or to establish various life income vehicles.

Second, accelerate receipt of income before the end of 2021. If you have a bonus or deferred compensation that you can take in 2021 instead of next year, that may be advisable.

Third, apply some of all of the current unified gift and estate tax credit ($11.7 million) before the end of 2021 to particularly remove appreciating assets from your estate.  There are a variety of ways to accomplish this including the use of a charitable lead trust to pass assets generationally at low gift or estate tax costs.

Finally, and this may be relevant to donors at FJC, consider using a Charitable Remainder  Trust (CRT) for succession planning.  This is particularly relevant when planning for after-life transfers of IRA assets which are now subject to the 10-year withdrawal rule for most beneficiaries.  The remainder interest in the CRT can be designated for the family’s donor advised fund at FJC.