A Founding Father Philanthropist, Compound Interest and Us

A Founding Father Philanthropist, Compound Interest and Us

“Money makes money,” said Philanthropist Benjamin Franklin. “And the money that money makes, makes money.” Here’s what that means for Mississippi charity.

Community foundations are in the “forever” business. While we offer many types of giving opportunities and serve the nonprofit community in many ways, our primary purpose is to make sure dollars will always be there to sustain the organizations and causes that keep our communities whole, making them vibrant places for people to live and work. This means we focus on endowment building for and with communities. We are “for good,” and we are “forever.”

Donors and their ideas are the backbone of charitable efforts in America, with roots as deep as the founding of our country, and with tools that revolutionized the concept of endowments. A recent article relates the story:

Boston and Philadelphia, 1790 – Benjamin Franklin, a Founding Father of the United States, got the idea to create an endowment for his native city of Boston, and his adopted home, Philadelphia. In a codicil to his Will, Franklin left 1,000 pounds (roughly $4,400 at the time) to each endowment, on the condition that each gift would serve a purpose dear to his heart: to help young printer’s apprentices get started in their jobs, to fund public works – and also earn interest for 200 years.

At the end of the first century, the Boston endowment was used as instructed and had grown to 131,000 pounds, equivalent to roughly $391,000. Over the next 100 years, proceeds of the endowment went to support public works in Boston, including using $322,490 to establish what is now the Benjamin Franklin Institute of Technology in the early 1900s. At the end of the second century in 1990, the two endowments combined were worth nearly $6,500,000. Both endowments have been used to fund public works, and to help thousands of young people achieve their dreams with scholarships and loans.”

Benjamin Franklin actually had a 300-year plan. It should come as no surprise that this most imaginative Founding Father invented American philanthropy and that his plan relied on compound interest (or, money making money). So what does that mean for us today?

The new Endow Mississippi Tax Credit Program was designed to help donors help their favorite nonprofits forever. Passed by the 2019 Legislature and signed into law in April 2019, the Endow Mississippi Tax Credit provides a 25% credit against state income tax for donors who give gifts to eligible, endowed funds at community foundations in Mississippi. The credit pool is limited to $500,000, and they will and do get used quickly. But any donation from $1,000 to $200,000 is eligible to apply. If you are interested in participating, we want to know now. Applications began being accepted June 17. Credits will renew January 1, 2020, so even if you’re just thinking about it, please contact us to discuss your ideas.

At the Community Foundation for Mississippi, we ask you to imagine. Imagine what change you’d like to see. Imagine a future where a certain need is met, or a challenge is solved. Imagine what role you might play in solving that challenge. Then think how we can work with you to leverage your talent and your treasure, to create change in Mississippi – for good, Forever.

We look forward to working with you!