Advantages to Establishing a Fund
We can help you establish a permanently endowed fund, or contribute to an existing one.
You needn’t be “rich” to reach your charitable goals. Named funds in the Community Foundation can be established for as little as $5,000 with a standard Fund Agreement and no set-up fee. Or, with the appropriate language, a fund can be established through a bequest or other planned giving vehicle. We will work with you and/or your professional advisor(s) at no charge.
A donor may give to any number of non-profits or charitable endeavors through a single fund, and be sure that their wishes will be carried out for all time. They may establish a fund through a testamentary gift or in their lifetime, becoming, in essence, their own favorite charity. Donors to the Community Foundation receive the maximum in service, oversight, recognition, stewardship and tax advantages. Friends, relatives, and co-workers may make contributions to a fund at any time, in any amount.
Funds in the Community Foundation are the ultimate in flexibility. Whatever you want to accomplish charitably, tell us and we will find a way to meet your needs or refer you to someone who can. The Community Foundation is a donor service.
Funds can be established immediately upon request.
Because the Community Foundation is a public charity, no consultation fees are ever charged to either you or your professional advisor, and, there is no fee to establish the fund. After the fund is funded (which in the case of a planned gift may be years) an annual fee is charged against the fund. Depending on the type of fund selected, the fee ranges from a minimum of 1.5 to 2.5% annually.
Your gift(s) keeps giving — making more and larger grants over time. Because the principal of a permanent fund is not expended (only the income), the fund you establish, or designate to receive your contribution, will exist in perpetuity — nurturing the charitable causes you’ve supported throughout life.
Your gift may be designated for one or more specific purposes. You have choices. Your gift may be totally unrestricted — leaving granting decisions to the Foundation Board to support areas of greatest community need, or you may designate gifts: 1) to any existing fund of the Foundation, 2) to a fund in your name with your own set of charitable parameters. Some individuals prefer their focus to be broad, others specifically name the non-profits they wish to benefit, such as their church or alma mater.
The intent of your gift is protected. Should restrictions placed on your gift in your lifetime become unnecessary, or incapable of fulfillment after your death, the Foundation’s Board of Trustees will protect the spirit of your gift by funding only those charitable endeavors that most nearly meet your original intent.
Funds can be established in your name, or in the name of someone you wish to honor or memorialize, in perpetuity. Each year, grants will be made in the name of your fund for the purpose(s) you specify. The charitable recipient and the community-at-large will forever be reminded of who you are and the causes you support. While named funds are a legacy to the future, gifted from the past, they are also an inspiration for others to follow your charitable example.
All consultations with the Community Foundation are kept confidential. Once a fund is established, you may continue to have anonymity upon request.
Undesignated gifts keep pace with changing times. As the needs of the community change from generation to generation, the income received from undesignated or field-of-interest funds may be used to meet future challenges unheard of today.
Grant allocations are followed and evaluated. All Foundation grant recipients are held accountable for fulfilling the terms of a fund, if any. Reports of how the grant was used and a follow-up evaluation are required. Site visits may be scheduled and any dollars not used for the stated purpose must be returned to the fund for redistribution
Your gift can take many forms from cash to stock, to sophisticated planned-giving vehicles. Additional benefits through planned-giving may include: making a gift with retention of income, making a larger gift than if making one outright, providing increased income for self and/or beneficiaries, serving as trustee (retain control) of certain planned gifts.
Contributions to the Community Foundation receive favorable income, gift, capital gains, and estate tax treatment In general, the Community Foundation offers more tax advantages than private foundations or direct gifts to other non-profits. This explains why so many non-profits have themselves established their endowments within the Community Foundation.
Gifts to permanently endowed funds may be claimed for the Michigan Income Tax Credit. Michigan is one of the few states that allows a state tax credit for gifts to permanently endowed funds in a Community Foundation. This credit is not diminished by additional gifts made to the handful of other organizations eligible for the credit, e.g., Michigan colleges and universities. This credit is in addition to the other tax benefits cited above.
The Board of Trustees is charged with the fiduciary responsibility for protecting funds while ensuring growth. Following the best practices in the field, funds are pooled for investment, thereby achieving a diverse mix with reduced risk. Results are evaluated quarterly.
Annual reporting through an independent audit, the filing of tax returns, public disclosure of all grant activities, licensing by the State of Michigan, and careful selection of the Board of Trustees assures continued use and management of funds in the public interest.