What is an agency endowment?
It is a long-term fund held and managed by the Community Foundation on behalf of a non-profit organization. The non-profit organization receives annual distributions for unrestricted use. The fund is technically owned by the Community Foundation on behalf of your agency.
What is the minimum needed to establish an endowment?
$20,000 in cash, securities, or other property. Contributions can be added to the fund at any time and in any amount. Another alternative is an Seed Fund which allows you to build up an agency endowment over a number of years.
Who would be managing our endowment?
The Board of Directors of the Community Foundation working in conjunction with the Board’s Investment Committee. This team of prominent community leaders includes an investment broker, community business leaders, tax attorneys, CPAs and corporate investment managers who work closely with our off-site managers.
What does it cost?
Agency endowments are endowed or quasi-endowed funds and are charged an administrative fee of 1.50% annually, based on the market value of the funds assessed on the average daily balance. We compute this fee on the market value of the fund on the last day of the quarter just ended and assess it quarterly. The fee is deducted from net earnings. The administrative fee is charged to all funds to cover the cost of reporting to the IRS (Form 990), annual audit reports, basic quarterly reports, recording revenue, expenses and distributions. It also covers costs associated with marketing your fund for the annual report.
What are the advantages of having an agency endowment with the Community Foundation?
- Consolidated investment management into a pooled fund provides a better return with lower administrative costs through economies of scale. The Community Foundation’s Board of Trustees has fiduciary oversight and handles all administrative reporting.
- Speed and convenience for donors. This can be especially important for year-end contributions and situations when stock or real estate is in the process of being sold and time is of the essence.
- Agencies receive exemption from filing a tax return or reporting on this fund since the fund’s financial transactions are consolidated with those of other funds on the Community Foundation’s Form 990. We provide quarterly reporting to your agency and staff of investment fund performance.
- Agencies receive access to donors who structure all their gifting through one resource at the Community Foundation and who can name your agency as a partial beneficiary of their philanthropy.
- The Community Foundation has access to the legal staff of the Council on Foundations (of which the Community Foundation is a member) and our own legal counsel for assistance in structuring complex gifts such as property, and current updates on new tax implications for charitable gifts.
- Donors receive assurance that their money will be managed in perpetuity, which is helpful with new or relatively small agencies without established track records.
- The Community Foundation can accept a variety of gifts, including bequests, gift annuities, and charitable trusts.
Who owns the fund?
The Community Foundation Serving Greeley and Weld County holds your funds on your behalf as a designated agency endowment. The Community Foundation holds, manages, invests and reinvests the assets of the fund which are co-mingled with the assets of other funds. The separate identity of each fund is maintained. Your organization may request that distributions of principal be made from the fund and The Community Foundation Board of Directors will give good faith consideration to those requests. The Community Foundation presently holds agency endowments from a wide range of non-profit organizations which have fund assets ranging up to six figures.
How do we get started?
Contact the Community Foundation at 970-304-9970 or firstname.lastname@example.org. We’ll walk you through the basic steps.