Endowed or Non-Endowed Funds

 

The first decision a donor needs to make is whether they want to create an endowed fund or a non-endowed fund.

Endowed Funds

The majority of our funds are endowed funds. Endowed funds are permanent funds established to carry out the donor’s philanthropic intentions in perpetuity.  Distributions are made from the earnings, and the principle remains intact to ensure a permanent funding sources for charitable interests.  In essence, endowments are gifts that keep growing and giving.

Assets are invested for growth, and the amount available for grants each year is based on a “spending rule” that currently distributes a maximum of 4% of the Fund’s market value annually, based on an average fund balance over 20 quarters.  Endowed funds may provide a permanent funding source for designated charities, fund scholarships for generations to come and create a legacy for the donor.

Non-endowed Funds

Non-endowed funds are flexible funds that provide your full access to the original gift and all future earnings.  You my recommend grants from the fund in any amount, at any time, to nonprofit organizations.  This type of fund is generally used for annual giving (donor advised funds) or nonprofit reserves (agency funds), rather than creating permanent resources for the community.

Non-endowed donor advised funds offer an easy way to learn about the Community Foundation before making a commitment to an endowed fund.  They provide a vehicle for streamlining your annual giving, allowing you to donate to the fund on a schedule that meets your financial needs and simplifying your tax records.  They also provide a vehicle for donating gifts such as appreciated stock to multiple charitable organizations.

Types of Funds

 

CFNSV offers a variety of fund types that help support the charitable goals of our donors.  Review each type of fund below to see what fund type best meets your needs.  You can also review a sample agreement located under the Forms & Documents tab, or contact us to discuss your charitable goals.

Agency Funds - Created by nonprofits for their benefit

Endowed Agency Funds are created by nonprofit organizations to provide long-term funding for operations and programs. It’s a simple and efficient way to build an endowment – and help create sustainability – for your nonprofit organization. Through diligent planning, annual distributions from Agency Endowed Funds can eventually offset some or all of a nonprofit organization’s operations expense.  Endowed agency funds demonstrate a commitment to long-range financial planning.

Non-endowed agency funds are ideal for operating reserves or building capital reserves.  They allow full access to the balance of the original gift and all future earnings with a vote of your board.

We handle investment management and the administrative responsibility related to your fund so that your organization’s staff and volunteer hours are concentrated on fulfilling your mission.  Plus the Community Foundation’s economies of scale provide your organization the benefits of a diverse investment portfolio and low investment fees that typically come only with very large funds.

Designated Funds - Supporting specified nonprofits

Designated Funds name one or more organizations to benefit from the endowment fund permanently. The Community Foundation ensures that the designated recipients receive support as long as they remain in existence and continue to fulfill the intended charitable purpose.

Establishing a Designated Fund allows you to support the good work of a specific non-profit organization – a senior center, museum, or virtually any nonprofit charitable organization. Because it’s given through your Community Foundation, your gift provides the organization not only funding, but also the power of endowment, investment stewardship and help with administrative details.

Donors can add to the fund at any time. If the organization you select ceases to exist or changes in mission, the fund can be redirected so that it continues to address your original charitable intent.

Donor Advised Funds - Providing flexibility in charitable giving

A donor advised fund is a vehicle that allows individuals, families and businesses to simplify and streamline their charitable giving. By establishing a tax-deductible donor advised fund with the CFNSV, you can centralize all your charitable giving through one cost-effective and expertly managed fund. Charitable giving is made easy, convenient, flexible and rewarding.

Donor Advised Funds allow you to participate actively in grant making by recommending distributions you would like the Foundation to make on your behalf. Working with the Community Foundation, this can be done without the administrative costs and complexities of private foundations.

Endowed donor advised funds provide a permanent funding source for charities selected annually by the donor.  Donors can create a succession plan to include successor advisors or instruct CFNSV to create a designated, scholarship, field of interest or unrestricted named fund upon their death.  They provide flexibility for the donor during their lifetime and a permanent legacy for their community.

Non-endowed donor advised funds provide a vehicle to support a donor’s annual giving.  Donors can give to the fund at a time that supports their financial needs and then use the fund to provide grants to nonprofits in the community.  A single gift with a single tax receipt can impact many charitable organizations.  This is particularly beneficial for donors wishing to donate appreciated stock.  As long as the donor maintains a balance of $5000, they have access to the original gift and all earnings and can recommend grants in any amount at any time.

Field of Interest Funds - Grants for a specified field of interest

Field of Interest Funds allow pooling of assets in order to address an area or issue of importance to the community (for example: children, the elderly, the arts, human services, or the environment.) Once established, Field of Interest Funds grow through gifts from others who support these same causes.

By establishing a Field of Interest Fund, you can target your gift to address needs in an important area of community life. Arts. AIDS. Aging. At-risk youth. Historic preservation. Conservation. Our board awards grants to community organizations and programs that are making a difference in the area you select. Your gift stays flexible enough to meet community needs in your interest area – even as they change over time.

While you direct and create a Field of Interest Fund, the maintenance is left up to us. Our staff continually monitors changing community needs so that you can be sure grants made in the name of your fund make the most impact in your field of interest and create your personal legacy of giving.

You can add any amount to the Field of Interest Fund you establish at any time – and so can others who share your interests in the community. Your gift becomes a permanent community funding resource.

Scholarship Funds - Scholarships for traditional or non-traditional education

Scholarship Funds recognize students’ achievements and help them further their education. Donors may select eligibility requirements and can designate funds for any level of education, from preschool to postgraduate work.

In creating a Scholarship, you invest in your community’s future and show students you care. Your community foundation provides the expertise to help you meet your personal goals and awards scholarships to deserving students. Your gift can help students achieve their lifetime dreams.

You can create a scholarship as a memorial to someone special, selecting eligibility criteria that exemplify that person’s goals and values – or those of your family or business. Depending on your preferences, the scholarship you establish can support any area of academic need, including tuition, room and board, and books. Our program staff tracks performance to ensure students continue to meet the terms for Scholarship support. Scholarships cannot be given directly to a student though. It must be sent directly to their school.

If the Scholarship you establish is renewable, you can review updated information on the progress of recipients over the years. You may even elect to meet these students – something many donors find very rewarding.

 

Unrestricted Funds - Grant recipients selected by CFNSV

Unrestricted Funds give the Community Foundation maximum flexibility in responding creatively and effectively to the community’s most compelling needs and opportunities. These funds are among the Foundation’s most important assets, capable of addressing community needs as they change over time.

When you establish an Unrestricted Fund, your gift can address a broad range of local needs – including future needs that cannot be anticipated at the time your gift is made. We evaluate all aspects of community well-being; arts and culture, economic development, education, environment, health and human services, neighborhood revitalization and more. The flexibility of your unrestricted gift enables your Community Foundation’s program experts to respond to the community’s most pressing needs, today and tomorrow.

Because you set no restrictions on the use of your gift, it enables our staff and board to do what they do best – assess community needs and respond by awarding grants to the nonprofit organizations that undertake our community’s most critical work. Unrestricted Funds enable your community foundation to support long-term solutions; respond quickly to emergencies; and meet changing social, cultural, educational, or environmental needs in our local community.

Grants are made in the name of the fund you establish, creating your personal legacy of giving. You may give your gift immediately or through your will or other estate planning strategy. Your gift becomes a permanent community funding resources.