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Donor-Advised Funds
Field of Interest Funds
Donor Designated Funds
Giving Circles
Donor-Advised Funds
A Donor-Advised Fund is a charitable giving account created by an individual, family or business and is used to support charitable causes recommended by the donors and their successors. This option provides great flexibility for giving during your lifetime and allows you to leave the gift of philanthropy to the future.
A fund may be classified as donor advised if it has at least three characteristics:
(1) a donor or person appointed or designated by the donor has, or reasonably expects to have, advisory privileges with respect to the fund’s distributions or investments,
(2) the fund is separately identified by reference to contributions of the donor(s), and
(3) the fund is owned and controlled by a sponsoring organization, such as a community foundation.
A fund possessing these characteristics may be exempt from the donor advised fund classification if it grants to one single public charity or government unit or if the fund meets certain requirements applicable to scholarship funds.
Benefits of a Donor-Advised Fund:
- Low Cost: Starting a donor-advised fund with JCF is free, with low annual administrative fees
- Community Knowledge: Partnering with JCF gives your insight into community needs & giving opportunities.
- Privacy: Grants can be made anonymously to protect your privacy.
- Greater Tax Benefits: Donations to donor-advised funds are tax deductible & may even eliminate capital gains taxes.
- Flexibility: You can support Jefferson County or any approved nonprofit in the nation.
- No Administration: You’re relieved of all administrative work as JCF handles distributions, record keeping, & tax filings.
Field of Interest Funds
Field of Interest Funds allow donors to focus their charitable giving toward a specific area of interest, while JCFs expertise determines the most effective organizations completing the best work. This type of fund allows donors to work closely JCF and the Fund Advisory Team to identify organizations that are making the greatest impact in the area of your choice.
Jefferson Community Foundation (JCF) currently holds five funds that are that is used for a specific charitable purpose, including:
Donor Designated Funds
Donors with strong ties to a particular organization may want to establish a Designated Fund.
A type of restricted fund in which the fund beneficiaries are specified by the grantors. The donor “designates” one or more charitable organizations that the fund will support during and after his or her lifetime.
Other donors are welcomed to contribute as well. If the beneficiary organization ceases to exist, the gift can be redirected to support an organization with a similar mission.
Giving Circles
Engage fellow donors in collaborative grantmaking!
Giving Circles are groups of neighbors, friends and/or family members who pool their charitable donations and decide together where to commit them. The work of the Giving Circles is not only to write a check, but also to help people learn about philanthropy, about the needs of their community and about local nonprofits.
JCF currently holds four Giving Circles, including:
- Better Living Through Giving
- Youth Mental Health
- Vintage Gratitude
- Quilseed Pearls
The dues, size, structure and mission are each different and are decided upon by the participants themselves. Jefferson Community Foundation plays a supportive role in the start-up and support of each Circle.
Endowed vs Non-Endowed Funds
An endowment is a permanent fund. Endowment funds are pooled for maximum benefit and invested to achieve long-term capital growth. Contributions are irrevocable and become assets of The Foundation.
Key things to know:
- Principal Balance: The principal balance can never be spent, so the endowment earning power is protected against inflation. Excess income or appreciation is added to the principal to protect its value over time.
- Distributable: The distributable balance consists of net income and appreciation (realized and unrealized) of the principal. This is the portion of the fund from which grants may be made.
- Advantages: The principal amount of money gifted will never be depleted. In this way, the fund will continue to give for good, forever.
- Limitations: As the amount of money available for distribution is based on the principal amount in the fund, each year’s grants will be directly affected by the fund’s overall success in the market.
- Liquidity: The principal balance invested is never liquidated, allowing for a continuous, perpetual gift.
Non-endowment funds have no permanent principal balance and are immediately available for grant distribution. An advised non-endowment fund can become an endowment fund at any time upon request.
Key things to know:
- Advantages: You can make an immediate impact on the community.
- Time: Funds are available for distribution the moment they are received by Jefferson Community Foundation.
- Limitations: The money you provide has a finite existence. Unless additional funding is provided, the monies available for granting will run out over time.
- Liquidity: All non-endowment pools are 100% liquid. Any amount may be granted from the pool at any time.
Some donors maintain both an endowment fund and a non-endowment fund, allowing them to regularly transfer monies from the non-endowment fund to the endowment fund to help build a balance upon which gifts can be provided in perpetuity.
Restricted vs Unrestricted Funds
Unrestricted Funds
An unrestricted fund is one that is not specifically designated to uses by the donor, or for which restrictions have expired or been removed.
Restricted Funds
Assets or income that is restricted in its use, in the types of organizations that may receive grants from it, or in the procedures used to make grants from such funds.
