WHEN MARTHA AND DON FARLEY DECIDED three years ago to start a private charitable foundation, it wasn't to help them become philanthropists—that was a role they'd taken on very early in their lives together. But it did mark a new chapter that could carry forward their commitment to give of themselves and try to improve the world.
Indeed, the story of Don, now 94, and Martha, who passed away last fall at the age of 87, plays like a black-and-white movie from the Greatest Generation. After serving as an Army telegraph operator in the Pacific during World War II, Don returned to Oberlin College in Ohio in 1946. During his first stint at Oberlin, at 18, he had studied cello at the Conservatory of Music. But as a 24-year-old veteran, "I wanted a broader perspective," he recalls. He switched to history and promptly met Martha Struthers, a brilliant 18-year-old who had been valedictorian of her high school class back in St. Paul.
"My parents [pictured above] wanted us to understand that there are lots of ways to live in the world that are good." — Ginger Farley
Worlds to Travel
As their friendship deepened, they fell in love and talked of marriage. But each wanted to see the world first. Don graduated in 1948 and left to teach in a Christian School in Chengdu, Sichuan Province, China, where he witnessed the takeover of the country by the Communists. The following year, Martha left for India, spending two years helping to manage a hospital as a Methodist missionary. "We carried on a courtship correspondence by mail during the three years we were apart," says Don. One letter contained Don's marriage proposal, another Martha's acceptance.
After their marriage in 1951, Don got his degree from Yale Divinity School. In 1954, he embarked upon a career as a minister that would take the Farleys from Massachusetts to Wisconsin to Illinois. Along the way, they had three daughters—Carol, Sarah and Virginia (Ginger). [Don, his daughters and three granddaughters are pictured at top.]
The Farleys often hosted international visitors, and Ginger remembers growing up in a household brimming with the excitement and energy of guests from around the globe. "My parents' world view was about caring for others, preserving resources, working in community and embracing differences," Ginger says."They wanted us to understand that there are lots of ways to live in the world that are good."
Living Their Values
In the tumultuous 1960s, Don and Martha's beliefs compelled them to plunge into the pressing issues of the day. Living in the Chicago suburbs of Wilmette and Evanston, Illinois, Farley used his pulpit to advocate for civil rights and fair housing, and to protest the war in Vietnam. In 1969, feeling the need to work directly with teenagers, he got his masters degree from the University of Chicago and became a teacher at the age of 50, spending a number of years at a high school in the suburb of Northbrook.
Martha, meanwhile, served on the General Commission on Status and Role of Women of the United Methodist Church, along with her work for the United Way. "She had a strong sense of justice, and of obligation to the larger community," Don says.
In retirement, Don and Martha stayed busy with their philanthropic causes and a shared passion for the arts. He played with two North Shore music clubs. They were parents who taught by example, Ginger recalls. All three daughters became passionate supporters of social causes and the arts.
A Thoughtful Plan
While the Farleys lived modestly and frugally, a sizeable inheritance from Martha's family put them in a position to make an even greater difference in the causes they cared so passionately about. To help them direct their giving, they worked with a Merrill Lynch team led by financial advisor Steven Porter, as well as a tax advisor.
"The Farleys' main goal was always to find ways to put their money to work for the good of the community and for organizations that can make the world a better place," says Porter. He proceeded to recommend ways that their money could have the most impact, without sacrificing their own or their daughters' financial security.
"The Farleys' main goal was always to find ways to put their money to work for the good of the community." — Steven Porter, Merrill Lynch Financial Advisor
Tapping into the knowledge and experience of a trust specialist at Merrill Lynch, Porter suggested the Farleys create two charitable remainder trusts (CRTs). The trusts were able to sell appreciated stock without triggering immediate capital gains taxes, enabling them to reinvest the entire proceeds. They will continue to provide a stream of payments to the Farleys during their lifetimes, with the remaining assets going to designated charities when the trusts terminate.
As an additional vehicle for giving, the Farleys formed a charitable lead trust (CLT), allowing them to make contributions to charities for a set period of time, with the remaining assets distributed to designated beneficiaries—in this case the Farleys' daughters—when the trust comes to an end.
To see to it that the Farleys would have enough to cover their income needs over generations, Porter and his team suggested supplementing the trusts with two additional strategies: an annuity to provide additional cash flow during Don's and Martha's lifetimes and an irrevocable life insurance trust. The latter, funded with a survivorship life insurance policy on their joint lives, would make tax-advantaged distributions to the daughters after Don and Martha had passed away.
"They did a very good job explaining how this would affect our holdings, and how we could set aside something to benefit our children while still supporting ourselves," Farley says of Porter's team.
Even after funding the charitable trusts, the Farleys owned assets that were growing in value and could potentially be subject to capital gains taxes. That's when they decided to start their private family foundation. The Martha Struthers Farley & Donald C. Farley Jr. Family Foundation received its tax-exempt status in 2015 and recently made its first grants to charities. According to Ginger, establishing the foundation allowed the family to become more structured and formal in what was already a deep-rooted passion for helping others. "The philanthropic themes and urges were already in place," she says. "We've been doing these things. Now we can do more." Ginger adds that the foundation "brings us together around ideals."
Martha's spirit lives on in the foundation. "We have 20 or more agencies that we support," says Don, who remains actively engaged. "That includes arts, community services in Evanston, and church efforts to relieve suffering, among others." As board members, Don and each of the daughters have voices in selecting the causes they care most deeply about. Four grandchildren are beginning to take part as well. "We put together a mission statement based on the giving Mom and Dad had already been doing, and set up a system for proposing gifts," Ginger Farley says.
That mission statement also serves as a pretty good summary of how Martha and Don Farley have always lived: "To balance inequities, facilitate learning, protect the environment, promote peace and to nourish creativity and artistic excellence."
3 Questions to Ask Your Advisor
- How can I select organizations that will make the most of my donations?
- I want to give to charity now but preserve assets for my descendants as well. What are some of my options?
- What are some ways to ensure that my legacy of giving continues after I'm gone?