What goes on at a community foundation?
By Maura TeynorFebruary 14, 2017
I am working on the annual report and thought I would share some FAQs.
What is the Richland County Foundation? Richland County Foundation was founded in 1945 and is a 501c3 public charity that primarily serves the residents of Richland County by disbursing grants to local charitable organizations for their programs and projects with the earnings from component funds established for that purpose.
What is a community foundation? A community foundation is an independent, tax-exempt public charity whose mission is to accept and administer charitable gifts and bequests, regardless of size, for the benefit of the local community. Community foundations fulfill donors’ charitable goals by awarding grants that meet a broad range of community needs, from the arts to basic human needs, to the environment.
Typically, a community foundation is comprised of many separate component funds. Unlike private foundations, community foundations funds come from many sources, including individuals and families, businesses, and other nonprofit organizations.
The first community foundation started in 1904 in Cleveland, Ohio. Today there are over 700 independent community foundations located across the country.
What is the advantage of a community foundation over a private foundation? A fund at a community foundation can be easily and quickly established with no start up costs. Gifts to community foundations generally have a greater tax benefit. There are no required annual payouts, filings, or taxes. The community foundation staff provides community knowledge and information about local public charities. Donors to the community foundation have the opportunity to be anonymous if desired.
Can I donate any amount to the Foundation?
Yes! There are many opportunities to give to the Foundation to help improve life in Richland County. With any size donation, you can give to the community fund or other established funds. Click here to see your giving options.
How do I set up a fund?
Here are the easy steps to set up a fund at the foundation.
- Determine your charitable interests and intent.
- Pick the type of fund that best meets your purpose. When you choose to establish an endowed fund your original gift remains intact and is invested for growth. A portion of the earnings, as defined by the spending policy, can be granted to public charities.
- Choose a name for your fund. You may use your name or the name of a family member, a name representing your favorite cause, as a memorial, or a name that allows you to be anonymous.
- Decide on a timeline for giving. Funds can be established immediately or as a deferred gift or bequest through your will.
- Review the many types of contributions available to make an initial gift. You can contribute of cash, marketable securities, or other property. Charitable IRA’s are an especially tax effective type of gift.
A separate named fund can be established with a gift of $10,000 and a scholarship fund can be established with a gift of $20,000. A fund can accept additional donations at any time.
What type of assets can I use? Cash, marketable securities, or real estate, readily marketable tangible personable property, transfer donor advised funds from large financial planning organizations, IRA and retirement plan assets, as well as planned gifts such as life insurance, charitable trusts, and charitable gift annuities.
Gifts of real estate require a qualified appraisal, a preliminary title report and an environmental assessment.
Gifts of tangible personal property such as artwork, jewelry, and collectibles will be evaluated individually by the Foundation for suitability before being accepted.
Gifts of appreciated long-term capital assets are generally deductible according to their fair market value with the additional benefit of the appreciation (capital gain) not reportable as income.
How can I provide support for a favorite charity? The donor should designate the charity(s) at the time of the gift, for regular annual grants, or suggest grants from a donor advised fund.
The donor may also identify an area of charitable interest, such as children, college scholarships, indigent elderly, and the Foundation Board of Trustees will seek out the appropriate recipients.
How does a Donor Advised Fund Work? The donor takes a tax deduction at the time of the gift ($10,000 or more to establish the fund) and has the privilege of suggesting grants to any public charity in the U.S.A. There are no required annual distributions. Grants must be $250 or more and will be processed in a matter of days. The grantee charity receives the name of the fund with the grant check, but the donor can be anonymous if desired. Regular fund statements are sent to the donor. No annual taxes are paid and no documents are required to be filed by the donor.
What are the tax benefits? Contributions to Richland County Foundation receive the maximum tax benefit available by law.
How are the funds invested? Funds of the Foundation are invested in a well diversified professionally managed portfolio. Each fund is allocated a portion of the pooled portfolio. The large size of the portfolio serves to minimize costs and provides access to investments not normally made available. The portfolio is governed by an investment policy and the Finance Committee. Outside professional investment advisors are utilized for management of the portfolio with close oversight by the Finance Committee.