How Do I Establish a Fund?
Establishing a fund at the Community Foundation will allow you to meet your specific charitable desires while receiving the simplicity and tax advantages of a public charity as well as the personal recognition, involvement, and flexibility of a private foundation. You gain access to the highest level of strategic thinking on ways to meet community challenges to help make your contributions as effective as possible.
It is easy to establish your own named charitable fund. Working with a member of our staff, and your financial advisor or estate attorney if you choose, you will take these simple steps to establish your fund:
1. Determine the charitable purpose or intent of your fund and your financial objectives.
- What’s your passion?
- What do you envision for your community?
- What level of tax benefit do you seek?
- Would you like to involve the next generation of your family?
2. Determine your fund’s giving strategy.
Here are some options:
- Support a broad range of local needs.
- Support a variety of organizations within a particular field, such as early childhood education, the environment or affordable housing, as examples.
- Support varying organizations at your recommendation.
- Benefit one or more specific charitable organization(s).
- Generate scholarships for students seeking higher education.
3. Select the type of charitable fund that best supports your purpose.
Our staff will outline your options and discuss advantages of each of the following fund types:
- Unrestricted Fund
- Fund for the NRV
- Field-of-Interest Fund
- Scholarship Fund
- Donor Advised Fund
- Designated Fund
- Nonprofit Agency Fund
To learn more about these types of funds, click here.
4. Determine the timing and amount of your gift.
Do you want to:
- Create a fund and see the impact of that fund during your lifetime?
- Create a fund through your will or trust?
5. Determine what assets you want to contribute.
Options include:
- Cash equivalents
- Publicly-traded securities
- Business interests
- Real estate
- Life insurance policies
- Pension fund assets
- Retirement account assets
For more information on the types of gifts, you can make, click here.
6. Consider your income needs.
- Are you interested in making a charitable gift and receiving income for the remainder of your lifetime or a set period of years? Both are possible with a charitable gift annuity or a charitable remainder trust.
- Are you interested in making a charitable gift now, but preserving some wealth for your heirs after your lifetime? You may be interested in a charitable lead trust.
7. Complete a simple governing document.
- Our staff will help you to complete a document that makes your intentions clear.
- Depending on the type of fund you establish, you may designate current fund advisors such as yourself and spouse and successor advisors such as your children. This information will be included in your governing document.
8. Select a name for your fund.
- You can use your name, the name of a family member, the name of a favorite cause,
- Or choose a name that allows you to remain anonymous.
9. Make an establishing gift.
- You can establish a fully endowed, named fund with a modest gift of $15,000 for a scholarship fund and $10,000 for all other fund types. Donors may choose to establish the fund by making gifts over time. You have three years to reach the endowment thresholds indicated above.
- You can make a gift to any existing fund at any amount.
10. Receive a tax deduction.
You will receive a tax deduction at the time the fund is established and when additional contributions are made to the fund.
11. Enjoy giving through your fund
Once your fund is established you can:
- Add to the fund at any time in any dollar amount.
- Specify how grant disbursements are to be acknowledged whether in the name of the fund or anonymously.
- If you establish a donor advised fund you may recommend distributions to charities, locally or throughout the United States.
Interested in starting a fund or learning more? Please reach out to the CFNRV team!