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| Professional Advisors - Types of Funds | home |
For details, please click on the type of fund below: 1) The Unrestricted Fund 1. The Unrestricted Fund Unrestricted gifts offer the broadest giving option, allowing grants to benefit the changing needs of Delaware County. 2. Field of Interest Funds For those who want to establish their own named fund (typically within one of the seven larger categories), DCCF will establish a fund for as little as $3,000. However, no distributions can be made until the value of the fund, through additional donations or investment growth, reaches at least $10,000. 3. Donor-Designated Endowments and Donor-Advised Funds enable charitably inclined individuals to play an active role in grantmaking without incurring the paperwork, taxes, and administrative expenses of maintaining a private foundation. An individual or couple, a family, even a business can establish a Donor-Advised Fund. Donor-Advised Funds also give donors the opportunity to work with the Foundation's professional staff and expert Board members in making grant recommendations. DCCF’s staff and Board are knowledgeable about the needs and resources of Delaware County and can assist donor-advisors to solicit and evaluate proposals from worthy charities or even to explore new areas of grantmaking. Donor-Advised Funds may carry the name of the donor, family, company, or someone the donor wishes to honor. All grants from the Fund are made in the name of the Fund, in perpetuity, if the donor wishes, through the establishment of an endowed Fund. Donors who prefer anonymity can choose names that simply reflect their Fund’s charitable purposes. The Foundation’s attorneys have prepared a very simple Fund Agreement template that you can customize to meet your own needs. Completing this Agreement often helps donors clarify their charitable objectives. This information is provided without obligation. DCCF offers three types of Donor-Advised Funds to choose from depending on your philanthropic objectives. 1. Endowed Funds are designed to exist forever. You, or the successor advisor(s) you designate, can be actively involved in recommending grants from your Fund, but only a portion of the Fund’s balance will be available for spending each year. DCCF uses a spending policy that allows 5% of the fund’s average balance, calculated over twenty trailing quarters, to be granted out. One percent is used to cover Foundation expenses, and 4% is available for grants to the donor’s favored charities. 2. Non-Endowed “Short Term” Funds may expend their entire balance at any time. A number of asset allocation strategies ranging from 100% cash to fixed income to 60% equities are available, depending on how long you expect the Fund to operate. 3. A Hybrid Fund may be desirable if you want to establish a permanent fund, but desire to grant more than 4% each year. When you establish this type of Donor-Advised Fund, you designate what portion of your gifts to the Fund should be available for immediate grantmaking. The rest of your gifts are invested for long-term growth. Fees Grantmaking The Foundation’s staff conducts due diligence to make sure that recommended grantees are legal and legitimate, and the Foundation’s Board has ultimate discretion on all grant-making decisions. IRS regulations do require that donors not make a pledge on the assets of their Fund or receive any benefits when using their Fund to make grant recommendations. Quarterly fund statements are mailed to all fund representatives to outline their Fund’s investment performance, grants paid, gifts received, and amounts available for grantmaking. New Grantmaking Regulations Starting a Donor-Advised Fund Once the Fund agreement is signed and the assets are transferred to DCCF, your Fund becomes active. Many people recognize that the key to their success in life is due to the education they received, and they want to make it possible for others to benefit from a good education. An investment in Delaware County Community Foundation makes it possible for generous community members to fulfill their dream of establishing scholarship funds and for individuals who want an education to have the chance to receive one. DCCF welcomes scholarship funds that will help students from our area attend a specific school, college or university, regardless of its location, or pursue a particular course of study. Donors may even establish scholarship funds for any level of study, from pre-school to post-graduate. Donors may specify other selection criteria for recipients, including but not limited to academic achievement and financial need. The selection of scholarship recipients must be made on an objective, non-discriminatory basis. There must be broad dissemination of eligibility requirements and application deadlines for scholarship awards. The Foundation makes scholarship grants only to qualified, nonprofit educational institutions for the benefit of selected students. There are a number of other criteria that must guide the Foundation’s decision-making in regard to the “nomination” and selection of worthy scholarship recipients. These criteria generally reflect the industry standards utilized by dozens of community foundations as well as the IRS’s requirements. The Foundation’s Board of Directors will give careful consideration to the recommendations of all school, faculty or alumni advisory committees. Such advisory committee members should understand that their recommendations are advisory and will not be binding on the Board of Directors which, by law, must retain final responsibility for all distributions made from the Foundation. A scholarship fund can carry the name of the donor, family, company, or someone the donor wishes to honor. All scholarship grants are made in the name of the Fund, in perpetuity ????. Donors who prefer anonymity may want to choose names that reflect their Fund’s charitable or scholarship purposes. As is true of all DCCF funds, scholarship funds are considered assets of the Foundation. Donors, friends or alumni may add to any scholarship fund at any time. New Scholarship Regulations and Guidelines In October 2006 President Bush signed into law the Pension Protection Act of 2006 (HR 4). Included in HR4 are dozens of important new charitable regulations that will affect the way community foundations administer Scholarship and Donor-Advised Funds. Specifically, Congress has significantly altered the requirements for a sponsoring organization (in this case, DCCF) to administer scholarship funds. Examples of some of the most stringent requirements are:
For additional information or questions, please contact Margaret Hendricks, DCCF's Executive Director, at (610) 565-8353. Family members, friends and colleagues who wish to pay tribute to an individual upon their passing can quickly and cost-effectively create a commemorative fund to honor their loved one. Memorial funds are typically established as endowed funds, with the fund generating interest and dividends every year to benefit charities that were meaningful to the deceased individual or their family. DCCF will establish a named fund for as little as $3,000. However, no distributions can be made until the value of the fund, through additional donations or investment growth, reaches at least $10,000. Additional details regarding the timely establishment of a Memorial Fund are available by calling Margaret Hendricks, DCCF's Executive Director, at 610–565-8353.
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