Staff Writer

A donation to the Union Community Foundation is described as a “win-win” for both the foundation and the donor.

Union City Council established the foundation in 2006 with an endowment of $1 million. The endowment, which came from a $2 million insurance settlement the city received for the fire which destroyed the old Union High School, is seed money for the foundation. The money has been placed in an interest-bearing account that is expected to grow to $1.5 million over the next five years.

Foundation funds are being managed by the Spartanburg Community Foundation. John Dargan, president and CEO of the Spartanburg County Foundation, spoke during a special briefing of the Union Community Foundation Thursday afternoon. He discussed how endowing the foundation can be a “win-win” for the donors, especially at tax time.

“If they give to the foundation's general fund - just to the community fund itself - they get a tax receipt letter for their donation and they can use that donation against their taxes for this year,” he said. “If it's a large donation that they can't use all up in one year they can carry it forward for the next two or three years, whatever's appropriate in their particular case.

“It depends on the size of the gift, of course, but for cash they get to deduct 100 percent of the cash gift up to 50 percent of their adjusted gross income,” he said. “It it's stock, it's 30 percent of their adjusted gross income.”

If, however, the donor has their own fund with the foundation and they give stock, they convert ownership of the stock to the foundation Dargan said. The foundation actually sells the stock as the owner and this eliminates the capital gains tax the donor might have otherwise had to pay.

The donor also receives a tax receipt letter for 100 percent of the value of the stock. They can use that as tax deduction for one or more years depending on the size of the gift.

The foundation takes the cash donations and/or money generated by the sale of stock and invests them. The returns on the investment are tax-free and the revenue generated will be used for grants for community improvements.

The Spartanburg Community Foundation was organized in 1943 with an endowment of $10,000. At the end of 2006, it funds totaled $91 million. For the last 17 years, the foundation has shown an average return of 11.55 percent on the 682 funds it manages.

Twenty-five of those funds totaling $3.2 million are being managed for 14 organizations in Union County including the Union Rotary Club and the First Presbyterian Church. The Union Community Foundation has asked these groups to transfer their funds to help it achieve independence from the Spartanburg Community Foundation. Plans are for the foundation to build up its assets to $5 million-$6 million over the next three to five years and then begin operating independently.

Chairman Ray Robbins said Thursday that the foundation has received letters of commitment from all but two of those groups agreeing to transfer their funds.

For more information about the Union Community Foundation and the endowment process, contact Ray Robbins at 427-6744 or board member Bob Love at 427-5423.