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About Funds and GiftsFor Professional AdvisorsTypes of Funds
What kind of gifts can the Community Foundation accept?What is a “named fund”?
All funds established at the Community Foundation are either endowed or unendowed funds. An endowed fund creates a permanent fund designed to issue grants per the donor’s original intent in perpetuity. The minimum contribution to establish such a fund is $25,000, and once that minimum is met, the fund is eligible to issue grants after one full calendar year. Donors may take up to four years to reach the $25,000 minimum. During this preliminary period the funds are placed in a money market account to preserve their corpus. Once the fund reaches the minimum, however, the assets are pooled with those in other endowed funds and shares proportionately in gains/losses. The amount available for grants is determined by the Foundation’s spending policy (currently 4% of the assets in the fund based on a rolling average of the previous 12 fiscal quarters). The Foundation assesses an annual administrative contribution of the greater of $500 or 1.75% of market value on endowed funds. This contribution helps to defray costs of administering the funds and the grants that are made from them. Unendowed funds are non-permanent funds which donors establish for a variety of reasons, depending on the type of fund. The minimum to establish an unendowed fund is $10,000 and donors may take up to two years to reach this level. Once the dollar minimum is met, the fund is eligible for grants after one full calendar quarter. (Grants may be made sooner, but a process fee of 10% of each grant will be charged.) The minimum fund balance required to maintain this type of fund is $2,500. No fee as such is charged for unendowed funds. However, the assets are placed in a money market account and the interest earned is retained by the Community Foundation to offset administrative costs of processing the funds and issuing grants. To view and download a table contrasting the differences between endowed and unendowed funds, click here. With the exception of Scholarship funds and the CommuniFund™, both of which are endowed-only funds, all other types of funds at the Community Foundation (Donor Advised, Field of Interest, Designated, Agency funds) may be established as either endowed or unendowed funds.
The respective characteristics of endowed or unendowed funds described above are applicable to the funds listed below. Donor Advised FundsDonor Advised funds allow individuals, families, businesses or other entities to establish a fund where they may periodically direct that grants be issued to the nonprofits of their choice. (Please note that such directives are legally considered to be ‘recommendations’ of the donors; by law, the Community Foundation’s Board of Directors is required to approve all grants issued by the Foundation.) Donor Advised funds may be either endowed or unendowed and offer several distinct benefits.
If the donor establishes an unendowed Donor Advised fund, they have two years to reach the minimum asset level of $10,000. Once that minimum is met, the fund is eligible to make grants after one full calendar quarter. The minimum individual grant amount is $250; there is no maximum. Grants may be made once each quarter. (Please note: The IRS does not permit grants from Donor Advised funds to satisfy personal pledges of the donor(s) or any other party.) The minimum required to maintain an unendowed Donor Advised fund is $2,500. Once the fund balance decreases to this amount, donors are notified and they must decide the future of the fund by either replenishing the fund back to at least $10,000, transferring the balance to the CommuniFund™ (effectively closing the fund), or spending the fund down completely. No fee as such is charged for unendowed Donor Advised funds. However, the assets are placed in a money market account and the interest earned is retained by the Community Foundation to offset administrative costs of processing the funds and issuing grants. All or part of an unendowed Donor Advised fund may be converted to an endowed Donor Advised fund at any time; applicable minimum requirements for an endowed fund must be met. * If the donors establish an endowed Donor Advised fund, they have four years to reach the minimum asset level of $25,000. Once that minimum is met, the fund is eligible to make grants after one full calendar year. The minimum individual grant amount is $250; there is no maximum. Grants may be made once each quarter. (Please note: The IRS does not permit grants from Donor Advised funds to satisfy personal pledges of the donor(s) or any other party.) The minimum required to maintain an endowed fund is $25,000. No grants may be awarded from an endowed Donor Advised Fund whose fund balance goes below this amount. The Foundation assesses an annual administrative contribution of the greater of $500 or 1.75% of market value on endowed funds. This contribution helps to defray costs of administering the funds and the grants that are made from them. Most typically, Donor Advised funds bear the name of the donors (the John and Mary Smith Donor Advised Fund); other donors have chosen to memorialize loved ones; still other options are possible. For more information about Donor Advised funds at the Community Foundation, contact Diane Brown at (607) 772-6773.
Field of Interest FundsField of Interest funds, either endowed or unendowed, allow a donor or group of donors to establish a fund that addresses issues of specific interest to them. One example at the Community Foundation is The Women’s Fund, which was established by an initial group of donors to empower and assist women and girls in our region through grantmaking, as well as to encourage collective and engaged philanthropy among women. The Women’s Fund, through its Leadership Committee comprising donors to the Fund, continues to work to engage new donors in its philanthropic efforts and to grow its endowment. Another example at the Foundation would be the Broome Library Foundation Fund, which will eventually award grants to area libraries for specific types of projects. Both of these funds are designed to engage others in growing their endowments and in the grantmaking process, but that isn’t a necessity. A Field of Interest fund could also be established by a single donor or family which fully funds it on its own, sets the grantmaking parameters in place (i.e., chooses the areas of interest the fund should address in its grantmaking), and then allows the Foundation’s Special Grants Committee to make grant decisions. (If the donor wishes to choose on an ongoing basis the agencies to receive grants from the fund they establish, then this type of fund is not for them; they should consider establishing a Donor Advised fund.) There are several different grantmaking models under which Field of Interest funds may operate, and the model chosen will depend on the intent of the donors, the policies and procedures of the Foundation, and the legal regulations governing the operation of such funds. A signed fund agreement stating the fund’s purpose, whether it is endowed or unendowed, and indicating a common understanding of how it will operate should be in place prior to the gift being made. Executive Director Diane Brown will be happy to speak with you about the type of fund that best suits the needs of your client. Call her at (607) 772-6773.
Designated FundsAs their name implies, Designated funds, whether endowed or unendowed, are established by donors to achieve a designated purpose among a designated population. For example, such funds might be set up to make annual or periodic grants to a list of charities pre-determined by the original donors. They could also be established to issue grants to nonprofits in a specific geographic area – a county or a municipality. Or they could be set up to do both; it all depends on what your client wishes to achieve through the fund. Unlike a Donor Advised fund, however, the complete parameters for grantmaking for the fund must be established through the fund agreement at the time the fund is established, and after that point, donor involvement is limited. For many donors this is exactly what they want: They like the idea that they can set in motion a meaningful, personal charitable legacy and be confident that it will operate without their having to devote precious time and attention to it, even after their deaths. Donors may make contributions to increase the size of their Designated fund (or any fund at the Foundation) at any time. Most generally, grant decisions will be made by the Special Grants committee of the Foundation’s board, within the purpose and grant parameters determined by your client (the donor) and approved by the board. But other scenarios may be considered as well. Designated funds may be set up by others besides individuals or families. They can be an excellent option for a private foundation that is considering dissolution – perhaps because its board members or trustees are aging and there is no one to take their place – but that wants to ensure that the foundation’s charitable legacy continues even without their future involvement. (Another option for a private foundation is to become a “supporting organization” of the Community Foundation. This option allows for continued involvement in grantmaking on the part of the donor foundation’s board, while relieving it of its administrative and investment responsibilities. Supporting organizations are more complicated to set up. Please contact Executive Director Diane Brown at (607) 772-6773 for more information.) Designated funds are also a good option for businesses that have been engaged in a community for a long time but that are now ceasing operations or moving their base of operations to another region. Such businesses often like to establish perpetual charitable funds with a “farewell” or ultimate gift to benefit the community that was so good to them for so many years. For more information about Designated Funds, contact the Community Foundation at (607) 772-6773.
Agency FundsAgency funds are a type of Designated fund, but instead of making grants to a pre-determined list of multiple nonprofit organizations, their purpose is to support one particular nonprofit. Agency funds, both endowed and unendowed, may be established by individual donors or families, by another organization, or by the nonprofit itself. They are often established to house a nonprofit organization’s endowment, thereby saving the organization the considerable expense of having to pay an investment firm to manage it for them. An agency endowment housed at a community foundation can also be attractive to potential donors to such a fund, who may be reluctant to give a large gift directly to the nonprofit for fear that if for some reason the organization ceases operations, the gift will be lost. However, should the nonprofit cease operations after placing their endowment at the Community Foundation, the Foundation’s Board of Directors would either direct that the endowment be used to benefit another organization with a similar mission or it would be placed in the CommuniFund™, the Foundation’s general unrestricted endowment fund, to address immediate community needs. It should be emphasized that – as with all funds housed at the Community Foundation, per IRS regulations – the assets in an Agency fund become the property of the Community Foundation once they are contributed to the Fund. For this reason, it’s important that the donors (including the organization’s board, if the nonprofit itself is establishing the fund) give considerable thought to working out the terms of the fund agreement between themselves and the Foundation. The terms under which grants will be issued to the agency from the fund (for example, whether grants will be for operating, capital or special projects; frequency of grant distribution; whether principal may be invaded and if so, under what circumstances; etc.) should all be spelled out in the fund agreement and mutually agreed upon at the time the fund is established. Agency funds at community foundations have proven to be great options for many nonprofits and other donors around the country. For more information, please contact Diane Brown at (607) 772-6773.
Scholarship FundsScholarship funds are established by donors – individuals, families, businesses, schools, other foundations – as a way to support promising students by assisting them with the costs of their education. Oftentimes donors wish to support a student who is interested in a field of study that is of special significance to the donor. Other donors see such funds as a meaningful way to honor or memorialize friends, teachers, co-workers or family members – and they will name the Scholarship fund after the person being honored or remembered. Other scenarios may be possible, and we invite you to contact us to see if what your client has in mind is a good fit for a Community Foundation Scholarship fund. Depending on their charitable goals, it can be advantageous to your client to establish a Scholarship fund at the Community Foundation rather than directly with a particular educational institution. Why? Flexibility: A single fund, for example, could be set up so that it makes scholarship awards to students from different high schools who are planning to go on to college. Permanence: Scholarship funds at the Community Foundation are designed to endure. And additional donors to such funds (often the original donors will ‘seed’ a fund with a large gift, in expectation that others will help with additional gifts) may feel more confident in making gifts knowing that the Foundation is working to protect the fund’s longevity. Recognition: Your client’s fund will be listed in the Foundation’s annual report and here on our website. All scholarship grant checks bear the name of the appropriate scholarship fund. And, the Scholarship Award Letter which is sent to the school and given to the student at the school’s awards ceremony also bears the name of the fund. We understand that a Scholarship fund is an important part of your client’s legacy and we strive to ensure that their gift is recognized by others. Investment expertise: The Community Foundation works with highly qualified investment advisors regarding its fund assets, a level of expertise that may not be available to all educational institutions. Things To Know About Scholarship Funds at the Community Foundation:
The CommuniFund™The CommuniFund™ is the Community Foundation’s unrestricted general fund. It supports a vital component of the Foundation’s mission: responding to pressing needs in our communities in a broad-based, flexible, yet timely way. It consists of generous and thoughtful gifts of all sizes, from one dollar to hundreds of thousands of dollars. The CommuniFund™ is subject to the Foundation’s spending policy (4% of assets in the fund based on a rolling average of assets in the previous twelve fiscal quarters). In addition, a small percentage of the fund – 1.75% - is used to help support the Foundation’s operations. Grants from the CommuniFund™ are awarded in a twice-yearly competitive grants process in which nonprofits from throughout our six-county service area submit proposals for projects per grant criteria established annually by the Foundation’s Board of Directors. All proposals are reviewed by panels of volunteer reviewers drawn from the community (each panel is chaired by a Board member), then those proposals that are not eliminated at the panel level are reviewed by the Grants Committee of the Board. Lastly, the full Board of Directors reviews the proposals sent forward by the Grants Committee and makes the final decisions regarding grant funding. Since the Foundation’s inception in 1997 more than 240 grants have been awarded from the CommuniFund™, totaling more than $1.6 million. In considering a gift to the CommuniFund™ your client can be assured that his or her contribution will achieve positive local impact, benefiting the residents of our region. The gift will keep on giving, as well; as an endowed fund, the CommuniFund™ will endure into the future. And of course, a gift to the CommuniFund™ (as to all funds at the Foundation) is tax deductible to the fullest extent permitted by law. If your client knows that she wishes to “do something to give back to the community,” but simply isn’t sure what form her gift should take or has no list of specific organizations she would like to benefit, a gift to the CommuniFund™ could be the ideal solution. A gift to the CommuniFund™ requires no gift agreement and may be as simple as putting a check in the mail to the Foundation. Non-cash gifts, however, may be more complicated and the Foundation recommends that donors and/or their professional advisors contact us at (607) 772-6773 prior to initiating the gift.
What kind of gifts can the Community Foundation accept?The Community Foundation is pleased to accept the following types of gifts:
Additional criteria apply to acceptance of each type of gift other than cash gifts. See the Community Foundation’s Gift Acceptance Guidelines for specifics regarding criteria for acceptance of non-cash gifts. Cash is accepted in any form. Checks should be made payable to The Community Foundation for South Central New York (if designated for a particular fund at the Foundation, please note the name of the fund in the memo section of the check). Cash gifts may be mailed or delivered to the Foundation’s administrative offices at 70 Front St., Binghamton, NY 13905. Gifts placed through credit cards (VISA or MC) can also be accepted via mail or telephone (607-772-6773). Please note that at the present time, the Foundation does not issue Charitable Gift Annuities, although it is grateful to be named as a charitable beneficiary on CGAs issued by other institutions.
What is a “named fund”?A named fund is simply a fund that has been established by a donor or donors and given a name of the donors’ choosing. Some donors use the naming opportunity to perpetuate their own charitable legacy to the community. For example, Donor Advised Funds often bear the name of their donors (the John and Mary Smith Fund; the Smith Company Fund). Others choose to name their fund in honor (or in memory) of a friend or loved one. Other naming possibilities for funds are names that reflect the town or region served by the fund, or the field of interest that the fund will reflect (e.g., the Smith Family Fund for the Environment). The possibilities are virtually limitless. Certain of your clients may wish to make a gift or establish a fund, but not have their name or the name of their fund listed in Foundation publications or on our website. This is not a problem; the Foundation will simply list them in all publications as “Anonymous” or “Anonymous Fund.” Your clients should be aware, however, that in submitting its yearly Form 990 to the IRS, the Foundation is required to individually identify all funds.
To view a Toolkit comprising informational materials about the Community Foundation, its funds and services, that you can print out either for yourself or to share with your client, click here.
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