1. The “Endowment” vs. “Lump Sum” Problem.
How do most people make their charitable gifts? Usually, it’s in relatively small and recurring periodic installments – $50 per month, $1,000 per year, etc. In fact, most people are disinclined to leave a large amount of money to a charity in a “lump sum” – i.e., all at one time. The receipt of a large, unexpected gift has ruined many a small charity – such a gift can disrupt annual budgets and can actually induce other donors to reduce their contributions or pledges to that charity. When given a choice on how to make a large gift to charity, most people prefer to do it in a permanent or endowment fashion. In other words, they prefer to make the gift in such a fashion that the principal remains intact, and only the income is distributed to the charity on a recurring basis. Unfortunately, however, many charities do not have separate endowment organizations. Until now, the only choice for donors wanting to make a permanently-endowed gift was to set up their own stand-alone private foundation. The problem there, of course, is the cost and hassle of doing so, and many times the gifts just don’t get made at all. But now, the CCF affords donors the chance to endow their giving, without the cost or hassle of a private foundation. In fact, the mere existence of the CCF as an endowment vehicle opens up gifts for the benefit of specific charities – gifts that simply wouldn’t have been made directly to those charities, without the CCF.