/ 2 F UNDRAISING IN THE U NITED S TATES : A FOCUS ON ‘A MERICAN FRIENDS FUNDS ’ AT KBFUS Jean Paul Warmoes Executive Director, King Baudouin Foundation United States (KBFUS)

/ 3 S COPE OF THIS SESSION I.K ING B AUDOUIN F OUNDATION U NITED S TATES (KBFUS) IN A N UTSHELL II.G IVING IN THE U NITED S TATES : A BRIEF INTRODUCTION III.T APPING INTO A MERICAN GENEROSITY : I S IT FOR ME ? IV.T WO OPTIONS FOR A FRICAN NONPROFITS : A. Setting up a stand-alone 501(c)(3) public charity in the U.S. B. Partnering with a ‘fiscal sponsor’ (such as KBFUS) V.A CLOSER LOOK AT ‘A MERICAN FRIENDS FUNDS ’ AT KBFUS VI.A DDITIONAL RESOURCES VII.C ONTACT INFORMATION

/ 4 I. K ING B AUDOUIN F OUNDATION U NITED S TATES (KBFUS) IN A N UTSHELL An American 501(c)(3) public charity, based in New York. Mission: To facilitate thoughtful, effective giving to Europe and Africa. - Services for U.S.-based donors - donor-advised funds, legacy funds, KBFUS ART. - Solutions for European and African nonprofits - American friends funds. - Innovative learning opportunities. Affiliated with the Brussels-based King Baudouin Foundation (KBF). Established Annual Revenue (2014): $21 million.

/ 5 II. G IVING IN THE U NITED S TATES : A BRIEF INTRODUCTION Total contributions 2014: US$ billion. Contributions by source: - 72% from individuals - 15% from foundations - 8% from bequests - 5% from corporations Contributions by recipient category (top 3): - 32% to Religion - 15% to Education - 12% to Human services (See attachment 1, ‘Giving USA Highlights’)

/ 6 III. T APPING INTO A MERICAN GENEROSITY : I S IT FOR ME ? Framing the question: - Fundraising should be part of a broader strategic plan - Efforts targeting donors in the U.S. should complement initiatives at home Fundraising & the roles of the board Chair, the board, the CEO, and the development office Making the case and identifying ‘targets’ - don't be naive Start by making friends - share your vision and passion Don't forget to listen Ask donors to ‘invest’ - but not too fast It takes time, energy and money

/ 7 IV. T WO OPTIONS FOR E UROPEAN NONPROFITS A.Setting up a stand-alone 501(c)(3) public charity in the U.S. Step 1: Forming a charity under U.S. law - incorporation at state-level Step 2: Obtaining recognition of federal tax exemption (IRS) Step 3: State registrations and tax exemptions (See attachment 2, ‘Applying for 501(c)(3) tax-exempt status’) Operational considerations for U.S. 501(c)(3) public charities: Majority of board needs to be independent + based in the U.S. Discretion and control - no ‘conduit’ Classification as a public charity - public support test Ongoing filing requirements - IRS Form state filing Estimated annual operating costs: At least US$ 25,000 a year Why would you set up your own nonprofit entity? Need to hire full time staff and/or rent office space Misguided perception that you are ‘in control’

/ 8 (continued) IV. T WO OPTIONS FOR E UROPEAN NONPROFITS B.Partnering with a ‘fiscal sponsor’ (such as KBFUS). Advantages of fiscal sponsorship vs. setting up a stand-alone nonprofit entity: No need to incorporate and apply for federal tax exemption No need for a board with formal board meetings No need for audited financials and filing of annual tax returns No challenge relating to the public support test Fiscal sponsor takes care of the back office Choosing an intermediary: Fit with your geographic and issue focus Track record, reputation and image Knowledge of U.S. regulations Fee structure Width of services and Quality of interaction with staff

/ 9 V. A CLOSER LOOK AT ‘A MERICAN FRIENDS FUNDS ’ AT KBFUS An American friends fund at KBFUS: A tax-efficient structure for European and African nonprofits seeking to raise funds in the U.S. Easy to set up + nonprofit chooses the name for its fund Contributions are fully tax-deductible for U.S. tax purposes KBFUS takes care of tax, legal, financial issues + back office One time set-up fee ($1,500) + management fee (5% - 0.5% of funds raised / year) Currently 180+ partners (including Nelson Mandela Foundation, Institut Curie, Rijksmuseum, leading universities etc.) (See attachment 3, ‘An American friends fund at KBFUS’) Setting up an American friends fund, and distributions from your fund: 1.Due-diligence and establishment of an unrestricted fund on the books of KBFUS 2.Solicitation of contributions 3.Monthly overview of all contributions received Review of a grant application 5.Approval of the grant and signing of a grant agreement 6.Transfer of the grant amount

/ 10 VI. A DDITIONAL RESOURCES - Council for Advancement and Support of Education (CASE), - Chronicle of Higher Education, - Chronicle of Philanthropy, - Foundation Center, - Foundation Center - Map of Cross-Border Giving, crossborder.foundationcenter.org/welcome.phpcrossborder.foundationcenter.org/welcome.php - Giving USA Foundation, The Annual Report on Philanthropy, - Internal Revenue Service (IRS), Exempt Organizations Division, - IRS Stay Exempt, Tax Basics for Exempt Organizations,

/ 11 VII. C ONTACT I NFORMATION - Jean Paul Warmoes, Executive Director, - Ellena Fotinatos, Deputy Director, Donor & Nonprofit Services, - Hafeeza Rashed, Senior Advisor, Communications & Outreach, King Baudouin Foundation United States (KBFUS) 10 Rockefeller Plaza, 16th Floor, New York, NY Phone +1 (212) ;