Q: I'd like to donate some of our profits. How can I do this so the company gains, the community gains and the charity gains a gift in perpetuity?
- Jean R., business owner, Chicago.
A: First of all, thanks for giving back. Too often, companies that make their profits locally don't focus on giving back to the local communities that help make the profits in the first place.
One creative solution to constructive charitable donations was established by the National Heritage Foundation. J.T. "Dock" Houk, founder and chief executive officer of the foundation, has been doing this since the late '60s and has established 10,000 foundations managing about $250 million with $2.5 billion in estate commitments.
Dock and I established a foundation, called the Entrex Congressional District Foundation, that focuses your individual or company charitable donations into a foundation bearing your name - a legacy for you and the community. You gain the tax savings while the foundation invests in local companies pursuant to your fiduciary direction and their formulaic dividend yield. It is this dividend that helps the foundation gain "the gift that keeps on giving."
There are a million ways to put your money to use, but this is a sure way to leave a legacy.
Under the umbrella of the National Heritage Foundation, Entrex will create foundation offerings that meet the specific giving ideals of donors while investing in Entrex Ensured Companies (companies that have been through Entrex's validation and quarterly reporting process). The foundation's investment profits can be distributed as new investments or distributed to other charitable entities as directed by donors.
The way it works is simple: You donate to the foundation, your funds are held in a capital account and the foundation invests - subject to dividend yields of the investment - in entities within your community (or across your congressional district) pursuant to your wishes, profits and dividends. From these entities the investment is then distributed, again per your requests, across the charities you choose.
Why not use the profits from one success to support American businesses while creating a legacy that keeps on giving? This is a solution where everyone wins.
Stephen Watkins is the chief executive officer of Entrex, a marketplace where the financial community can find, research, track, manage and trade interests in entrepreneurial companies. He can be contacted at firstname.lastname@example.org.