Wanting to be good stewards of the many gifts bestowed upon them, Arvin and Pearl Tap established a private family foundation. For many years, the couple received great pleasure in supporting specific faith-based organizations. Through their foundation, they could see direct impact on young people at Potter's House, a Christian school they passionately champion.
The Taps soon discovered, however, that administering a private foundation takes time and effort, perhaps more than they wanted to provide at this place in their lives. "The administration of the foundation became burdensome. We're trying to simplify our lives, but wanted to continue with our giving," Arvin said.
The couple's CPA, Bob Schellenberg from Schellenberg and Evers, PC, suggested several reasons for the Taps to consider transferring their private foundation assets to a Donor Advised Fund at the Grand Rapids Community Foundation. He said the Community Foundation has a solid reputation, manages investments well, helps donors find charitable needs that fit their beliefs and frees them from paperwork and form filing.
"The Community Foundation is, above all, objective and impartial about the wishes of a donor, whether conservative or liberal. It is unbiased about meeting the donor's wishes," Schellenberg said.
As the Taps and other families have discovered, other reasons to choose a Donor Advised Fund over a private family foundation include:
- Investments have potential to grow tax free, allowing donors to make additional contributions over time.
- Contributions to a Donor Advised Fund are immediately tax deductible and receive more advantageous tax treatment than gifts to private foundations.
- Recordkeeping is simplified.
- Individuals can avoid incurring capital gains tax by donating appreciated securities directly to the fund.
- There is no required five percent fund distribution.
- Grants can be anonymous.
- Donors have access to the Community Foundation's professional grant making staff.
Terminating their private foundation wasn't complicated. The Community Foundation's development staff worked with the Taps' professional advisors, Ron David and Schellenberg, to transfer assets from the private foundation to the Donor Advised Fund. The couple used shares of Fastco Industries stock to increase the value of their fund.
Through the Arvin L. and Pearl M. Tap Fund at the Grand Rapids Community Foundation, the couple will be able to make gifts to organizations they care about throughout their lifetime. The Tap Fund will provide support in perpetuity to their favorite cause: education. "We care most about our church and Christian education," said Pearl. "The long-term aspects of the fund are attractive and we hope to have our children involved it one day," Arvin added.
After a 17-year career with General Motors, Arvin founded Fastco Industries, Inc. in 1970. As he and Pearl raised their four children, she taught piano lessons, something she still does and enjoys. Arvin is not yet retired from Fastco, but is working toward transitioning the business to their son, Bruce. Pearl plays organ and piano at Fellowship Christian Reformed Church, where she and Arvin are members. The Taps plan to travel more in retirement and maintain their philanthropic and volunteer involvement with Potter's House.
"God called us to be good stewards of what we've been given. The gifts (we have) can be a blessing or a curse, and it depends on what you do with those gifts. For us it has been a blessing. We've seen the effect of education on students, and that is truly rewarding," Arvin said.