Types of Funds
There are several types of charitable funds available to support your giving at the Community Foundation. Choose the one that matches your personal approach to giving and your charitable intent. Our staff is ready to discuss these options with you and to help you select one that matches your giving needs.
A gift to the Fund for the NRV is ideal for those donors wishing to make an impact now through the broad support of our community. The Fund for the NRV enables the Community Foundation to respond to pressing and often changing needs in the community. Gifts to the Fund for the NRV support strategic investments and regional collaborative projects within our four long-term priority focus areas: poverty alleviation, education, economic and community development, and nonprofit capacity building. By December 2017, the Board of Directors has set a goal of raising $800,000 for the Fund for the NRV to enhance our impact in the region.
Donors without a specific interest area, but who wish to make a positive impact in our community, can set up an unrestricted endowment in their name or make a contribution to the Community Foundation’s General Endowment. We direct the proceeds from unrestricted endowments to our community’s most pressing needs over time. Donors may also choose to make a gift to our General Endowment, a long-term funding source for general charitable purposes serving the New River Valley that provides us with the flexibility to respond to needs as they arise. Donors establishing an unrestricted endowment or giving to the General Endowment trust our Board of Directors to use this money wisely as our community’s needs evolve.
Field of Interest funds allow donors to target their gifts to address needs in a specific area of interest. For example, we have funds dedicated to educational opportunities for low income children, enhancing the arts, conserving natural resources, poverty alleviation, and more. Our Board of Directors approves the grants awarded to nonprofit organizations through a competitive grant application process. Field of Interest funds ensure that a donor’s gift stays flexible enough to meet changing community needs. They also allow donors to direct their gifts to a charitable area of interest without the “hands-on” involvement of a donor-advised fund.
Scholarship funds offer donors an opportunity to build the community’s future by investing in the education of tomorrow’s leaders. Our staff members work closely with donors to design a scholarship program that meets donor goals while ensuring that the donors’ contributions are fully tax deductible and that scholarship awards are not treated as taxable income to the recipients. Donors may tailor their funds to benefit students with a demonstrated financial need, those pursuing a particular major, or those with certain extracurricular activities, among other criteria. Scholarship recipients are chosen by a Scholarship Selection Committee that participates in all aspects of the scholarship program, including outreach and review of applications. Award payments are made directly to the educational institutions on behalf of the recipients.
Donor advised funds allow donors the most flexibility to achieve their charitable purposes. They are designed for donors who want to be actively involved in directing how the funds are used. Donors can recommend charitable projects or organizations they wish to support through their fund during our annual competitive grant process or outside of the competitive process at any time throughout the year. Donors can request guidance on grantee selection from our knowledgeable staff and also have the ability to select their own advisory committee to assist them in choosing grant recipients. Each request from a Donor-Advised fund, however, is subject to approval by our Board of Directors.
Giving Circles are a form of a donor advised funds that allow a group of individual donors to pool their money in order to establish and grow a single fund. The group then collectively decides on how grant funds are distributed with the support of the foundation’s expert staff and volunteers. Giving circles make it possible for anyone to meet their charitable goals regardless of wealth, demonstrating the power of pooled resources to have a substantial impact.
Donors wishing to support a specific charitable agency or cause can establish a designated fund. Donors specify in their agreement which organizations will receive the available grants each year from their endowed fund. With a restricted fund, the recipients remain the same each year. If the original charity ceases to exist, becomes obsolete or is unable to perform its charitable purpose, the Community Foundation Board of Directors is able to redirect the funds to an organization providing similar services without the cost of expensive legal action.
Nonprofit organizations interested in growing assets to meet both current and future needs can also establish a designated fund. This can provide a relatively constant source of annual income and help maintain an organization’s mission in perpetuity. It also frees the nonprofit to focus on what they do best in the community since they can rely on our Foundation for strong investment oversight services and staff support to manage all of the administrative details of their endowment.
With the exception of The Fund for the NRV, all funds created at the CFNRV have two components to allow for maximum flexibility while ensuring a long-term source of funding to meet your charitable interest. They are:
Endowment: This is your savings account for the community, providing a source of funding that will meet your charitable interest in perpetuity. The principal participates in the Foundation’s investment pool managed by local money managers. Investment earnings are allocated amongst all participating funds each quarter. Grant and scholarship distribution amounts are calculated based on the distribution percentage set by the CFNRV Board of Directors annually. A fund is considered fully endowed when it reaches $15,000 for Scholarship Funds and $10,000 for Donor Advised, Designated, and Field of Interest Funds; donors have five years to reach this threshold.
Pass-Through: This is your checking account, allowing you to make an impact on immediate community needs. The principal may be spent down to zero and replenished as needed. Pass-through funds remain in a money market account and grants and scholarships may be distributed from the pass-through in an amount requested by the donor.
Click here if you would like to learn more about how to Establish a Fund.