What does “endowment” mean?
“Endowment” refers to a designated pool of assets that are invested by the Community Foundation and tracked separately such that a percentage of the assets are distributed each year to support a nonprofit or charitable cause, and the rest of the assets remain invested to grow in perpetuity.
Why is an endowment fund so important to the future?
The assets set aside in an endowment fund produce an income stream that helps support an organization's mission now and in the decades ahead, allowing nonprofits and donors to deliver their mission consistently over time, especially as needs shift and the fundraising environment ebbs and flows. Plus, the growth of the endowment itself can provide increasing levels of support each year.
How can donors stay involved even after they make an endowment gift?
Our team is happy to keep donors informed about the positive change in the community that is occurring thanks to distributions from the endowment fund. We’re happy to continue to keep a donor’s children and grandchildren informed, too, beyond a donor’s lifetime. In this way, a donor’s legacy continues through the generations.
Who decides where the endowment distributions go each year?
As the donor, you recommend distributions from your endowment, which our independent board reviews and approves to ensure they meet your charitable goals. The Community Foundation is dedicated to understanding the region's needs and supporting local charities.
How can a donor make an endowment gift?
A donor may transfer cash to an endowment fund. Even better for tax purposes, a donor can transfer appreciated stock or real estate. A donor can also work with estate planning and financial advisors to structure a bequest to the endowment fund. Many advisors highly recommend a bequest through an IRA beneficiary designation because of the multiple tax benefits. Related, if a donor is over 70 ½, making a “Qualified Charitable Distribution” from an IRA directly to a designated endowment fund is a very effective charitable planning tool to reduce income tax and, if applicable, also satisfy Required Minimum Distributions.
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