FREQUENTLY ASKED QUESTIONS
What is The Dallas Foundation?
The Dallas Foundation, established as a community foundation in 1929, serves as a leader,
catalyst, and resource for philanthropy by providing donors with flexible means of making gifts
to charitable causes that enhance our community.
As a community foundation, the Foundation is a hybrid between a private foundation (whose
main activity is awarding grants) and a typical publicly supported charity (whose main activity is
providing a service). Like a private foundation, The Dallas Foundation’s main activity is
awarding grants. But like other charities, we also provide a service. We help Dallasites and
others make effective gifts to charitable causes in Dallas County and around the country. We
receive our support from many people in the community rather than a single family. We are
considered a publicly supported charity and therefore receive more favorable tax treatment.
The Foundation awarded more than $18 million in grants in 2003. Since our inception, we have
given more than $100 million in grants to more than 800 agencies.
When was The Dallas Foundation established?
The Dallas Foundation is the oldest community foundation in Texas. It was established as the
Dallas Community Trust in 1929 by G. B. Dealey, George Waverly Briggs and other members of
a Dallas group called the Critic Club. The first grant was made in 1939. Renamed The Dallas
Foundation in 1942, it hired its first full-time staff member in 1987.
How can a donor give to The Dallas Foundation?
We have six different kinds of funds: advised, scholarship, designated and agency endowment,
field of interest, unrestricted, and supporting organizations. Donors can either make gifts to
establish these funds while living, or establish one of these funds through a planned giving
vehicle (such as a charitable remainder trust) or straight bequest.
• Advised funds (also known as donor advised funds) are typically established by living
donors who wish to be actively involved in philanthropy. Some donors set up advised funds
with family members as the donor advisors. Our donor advisors have the right to recommend
gifts from the funds; some of our donor advisors make such recommendations by letter or fax
several times a month, while others do so once every few years. Because we are a public
charity and not a private foundation, federal law does not require us to distribute any set
amount in grants each year. Our public charity status also provides us several other
We provide a range of services to advised fund donors. If donors do not yet know which
causes they wish to support, we can consult with them to refine their giving priorities.
We can also research prospective grantees and provide a vehicle for anonymous giving.
• Scholarship funds can be established by an individual, a corporation, or a group of people,
such as a civic club or trade association. These funds can supply financial support for
students at any level of education, or fellowships for people who wish to further their
professional development. The Foundation can provide a range of services to scholarship
funds, including designing the scholarship criteria and application process and assembling a
scholarship advisory committee.
• Designated and agency endowment funds benefit a specific agency or agencies. If a donor
wants to set up the fund, it is called a designated fund. If the agency itself wants to place its
endowment with us, it is called an agency endowment fund. Either way, the fund provides
perpetual support for the agency’s operations. The Foundation also holds the “variance
power,” which allows it to redirect funds if, for example, the beneficiary agency goes out of
business or ceases to serve its original purpose. This power protects the original donor’s
• Field of interest funds benefit a defined area of charitable activity or a certain group of
people. For example, we have a field of interest fund that benefits the arts in Dallas County,
and another that benefits poor and needy children. Our Governors award these funds during
the spring grant cycle.
• Unrestricted funds benefit the Dallas community at large in the areas of the arts, education,
health, and social services. Our Governors award these funds during the fall grant cycle.
• Supporting organizations give donors many of the benefits of a private foundation without
the administrative burden. Although there are three types of supporting organizations, we
prefer a “Type I,” which allows the supporting organization to have its own board, selected
through consultation with, and approved by, The Dallas Foundation.
Can I establish more than one type of fund at The Dallas Foundation?
Absolutely. A donor can have more than one fund, and funds of multiple types, at The Dallas
Foundation. A single fund's character can also change over time, such as a donor advised fund
that becomes a field of interest or unrestricted fund when the original donor dies.
What is the process for establishing a fund at The Dallas Foundation?
Call Mary Jalonick or Kathryn McGill, at the Foundation. We will talk to you about your goals
to ensure that we understand your intentions and then will prepare a simple fund agreement for
your signature. When the agreement is ready to be signed, you then transfer to us the assets to
open the fund. You may write a check, transfer money or stock by wire, or physically deliver a
stock certificate to complete the transaction. In the case of physically delivered stock or stock
certificates, we will also ask you to sign a stock power to facilitate the transfer. We can also
accept gifts of other kinds of assets, such as real estate, but the process takes longer.
What kind of assets can be contributed to the Foundation?
The Foundation can accept virtually any kind of asset, subject to its gift acceptance policies.
Typical gifts are cash and low-basis, highly appreciated securities.
Can I contribute to my fund on-line?
Yes. Visit the Foundation’s web site, www.dallas foundation.org, and visit the How to
Give/Online Donations section. We can also take donations directly by credit card over the
phone if you prefer not to use the web.
How is giving to the Foundation more advantageous than setting up a private foundation?
Private foundations may be the right vehicle for some donors. But many other people find that a
community foundation is a better option.
• Convenience. Establishing a fund is quick and easy, and can be accomplished in a matter of
days if necessary. Establishing a private foundation takes months, and requires significant
expenses in legal costs and filing fees.
• Deductibility. A community foundation offers donors the most favorable tax treatment,
whereas private foundations are far less tax-favored.
• Payout. As a publicly supported charity, the Foundation is not subject to the 5% minimum
distribution rule that applies to private foundations. This feature permits donors to start
“acorn” funds and allow those funds to build over time before making grants.
• Administration. The Dallas Foundation has program and finance staff, auditors, and
lawyers available to provide services. The Foundation includes all funds in its audit and tax
return. A private foundation must secure these services and file its own return.
• Anonymity. Many donors are surprised to learn that their donations to a private foundation,
and all grants their foundation awards, are public information, increasingly available on the
Internet. The Dallas Foundation, however, is entitled to shield the donor list in its tax return
from public view because the Foundation is a public charity. And while we do list our grants
in both our tax return and annual report, we do not indicate which fund was the source of
In addition, some donors prefer to make all or some of their gifts anonymously, which we
can do very easily. We can also research a charity on the donor’s behalf, which secures
the needed information to make a responsible gift while protecting the donor from
solicitations from the charity directly.
Who manages the Foundation’s operations?
The Foundation operates under an eleven-member Board of Governors. All Governors serve
How much does it cost to use The Dallas Foundation?
The Foundation’s administrative fee and the investment management fees chargeable to each
fund depend on the type of fund and how its assets are invested. The Foundation’s
administrative fee starts at 1.25% and steps down, as low as 55 bp, as the fund grows larger. The
current investment fee is 15 bp. For a donor advised fund of $100,000 in our investment pool,
for example, the total annual administrative and investment fees would be 1.40%.
To encourage the building of permanent endowment funds for nonprofit agencies, the
Foundation’s fee for agency endowments is 75 bp regardless of the size of the fund, plus the
investment management fee. For other funds, such as scholarships and support organizations,
the Foundation’s fee is negotiated based on the level and types of services the Foundation will
Can donors to the Foundation choose investments for the funds they establish?
Donors may choose among four different investment pools, reflecting different levels of risk
tolerance and investment time horizons. Those pools are a Money Market Pool, a Fixed Income
Emphasis Pool (70% bonds/30% stocks), a Balanced Pool (60% stocks/40% bonds), and an
Equity Emphasis Pool (80% stocks/20% bonds).
The Dallas Foundation is the Dallas-area participant in the Merrill Lynch Community Charitable
Fund (MLCCF), a national donor advised fund program. The minimum to open a fund through
the program is $25,000. Six investment portfolios are available. The Dallas Foundation also has
a cooperative arrangement with the American Funds through which donors may recommend that
fund assets be invested in one or more actively managed mutual funds offered by the company.
By law, we must have oversight of the fund and its investment management, and so the
arrangement with the financial consultant must be revocable. That said, we respect the
relationship between the financial advisor and the client.
In addition to these existing relationships, donors who contribute at least $1 million may request
that the funds remain with their existing managers. These arrangements must be approved by
The Dallas Foundation’s Investment Committee.
How can The Dallas Foundation work with private foundations?
For newly created private foundations, we can consult with the foundation on a negotiated fee
basis to help it develop grant guidelines and processes, select grants management software,
develop investment and spending policies, and evaluate grant applicants, among other services.
If a private foundation is nearing a distribution deadline, it may be compelled to award grants to
satisfy that deadline, even if it has not fully evaluated the beneficiary charity or the project is not
quite ready to proceed. Instead of making such a hasty grant, the private foundation can make a
grant to The Dallas Foundation to establish an advised fund. Because we are a publicly
supported charity, the grant to The Dallas Foundation satisfies the time-sensitive distribution
requirement. The private foundation can then recommend a grant from the advised fund when
the private foundation and the ultimate beneficiary are ready.
If a person or family has a private foundation but no longer wants the responsibility of
administering it, the private foundation can terminate and transfer its assets to The Dallas
Foundation. Those assets can then become an advised fund, part of the unrestricted fund, a field
of interest fund reflecting the private foundation’s priorities, or any other type of fund desired by
the private foundation’s trustees.
Whom should I contact if I am interested in discussing a fund at The Dallas Foundation?
Please contact Mary M. Jalonick, Executive Director, or Kathryn McGill, Director of Gift
Planning at 214.741.9898. They can also be reached by e-mail at
email@example.com. and firstname.lastname@example.org respectively.