7. The Power of Endowment Assumes 4.5% annual payout and 8.5% rate of return. This is for illustration purposes only. The Community Foundation allows a 4% annual payout. 6+ TIMES YEAR 15 $9,000 in cumulative grants and services $16,000 balance Initial gift has been invested: 1 TIME 2 TIMES YEAR 50 $66,000 in cumulative grants and services $57,000 balance YEAR 1 Establish a Named Fund $10,000 gift YEAR 25 $19,000 in cumulative grants and services $23,000 balance
(Note to presenter: The pictures on this slide are placeholders and can be replaced with local pictures of your community.) Good Day. My name is ______ and I am a member of the Floyd County Community Foundation. Thank you for giving me the opportunity to share with you some information about the Floyd County Community Foundation and how we can: Help you help your community! [click]
Despite the fact that community foundations have been active in the U.S. since the early 1900s, and are part of a rapidly growing field that numbers nearly 700, we realize that not enough people have a clear understanding of just what we are... and what we help people do. So let’s start with some basic definitions... [click]
The Community Foundation of Northeast Iowa is: A public charitable foundation that: Holds many named funds Is supported by individuals, families and businesses Channels gifts from donors to non-profit organizations in the community
Despite the fact that community foundations have been active in the U.S. since the early 1900s, and are part of a rapidly growing field that numbers nearly 700, we realize that not enough people have a clear understanding of just what we are... and what we help people do. So let’s start with some basic definitions... [click]
So, there are basically three special features of a Community Foundation that make us unique. I’d like to touch briefly on each… but it is important to note that it is the combination of these features that distinguishes community foundations and provides opportunities for donors and your community.
Through a community foundation, we build permanent endowments to ensure grants are always available to support the community. The endowment funds are permanent because we invest and protect the principal . Each year a percentage of the earnings are distributed through our grantmaking process based on the Foundation’s spending policy. The remainder of the growth of the fund is reinvested to ensure the fund will continue making the largest impact possible for the years to come. Creating a personal legacy is another important piece of partnering with a community foundation. We recognize that without our donors we would not exist. That is why we work hard to capture the life stories of our donors so that their name and good works can live on forever in the community. And community foundations have the power of variance. This allows us to redirect funds, if necessary, as community needs change. For example, if an agency had a fund with a community foundation but for some reason was no longer in existence, the Community Foundation has the ability to redirect the funds to a like cause. This is just another way that the Community Foundation is able to be a permanent philanthropic presence in the community it serves.
So, why give to an endowment? Consider how one gift of $10,000 can grow. In the first 15 years, it has generated $9,500 in grants to support local causes and programs, and retaining all of its original value. By year 25, fund has paid out $19,000 in grants while growing to be worth $23,000. In just 50 years, the original $10,000 gift has generated $66,000 in grants, and has a value of $57,000. Because we pool all of our endowment funds together, we are able to make the greatest impact in the county while continuing to build assets for future needs. ( Note to presenter : The Gift and grant values assume an 8.5% growth in the market and grants of 4.5% annually. This slide is for illustration purposes only. The Community Foundation policy allows a more conservative 4% payout annually. These numbers are attainable and have been the average until the recent economic crisis.) [Click]
Community foundations help individuals, families and businesses achieve their charitable and financial goals by offering tools and resources that make giving easy, flexible and effective. We can educate people on giving options. We offer a variety of funds to suit individual needs and preferences. Some approaches focus on giving in the near future, while others enable donors to make giving a part of their estate planning strategy. We can customize giving approaches to match personal interests and tax planning needs; our donors benefit from the highest available tax advantages because we are affiliated with a public charitable foundation that meets national standards. We allow donors to be involved in establishing a fund and offer involvement in recommending uses of their gift . We help people create personal legacies through named funds and help ensure that future generations learn the value of giving back. We also work hard to capture the life stories of our donors so that for years to come their name and good works can live on. Through highly personalized services, community foundations are able to create solutions that fit virtually every giver and every situation. [Click]
Your community foundation is a local organization with a governing committee made up of local people. This group of people has an in-depth knowledge of the issues , opportunities and resources that shape our county and communities. This enables them to play a key role in solving problems in the community, while helping donors learn more about local needs in order to make their giving as effective as possible. As we explained before, the Community Foundation monitors all the needs in the community in a variety of grant-making areas including: Arts and culture, Community affairs and development, Environment, Health, Human services, Historic preservation and Youth and Education. Through our grant process, we are able to survey the needs and work closely with local non-profit agencies in the community. Based on this information we gather, we can make grants and direct resources to the most appropriate areas. We stay alert to emerging issues in our communities/county. That’s why we say that our community foundation can make a difference where it is needed most! [Click]
Now that we have explained the special features of community foundations, I’d like to go into a little more detail about the different ways people can give through community foundations. We call them tools for giving, and they can help you achieve your charitable goals. [Click]
( Note to presenter : It might be a good idea[depending on the length of your presentation] to focus on just a few ways to give and provide a handout with all options of giving listed and note that if anyone is interested in knowing more they can visit with you after the presentation. THIS SLIDE DOES NOT NEED TO TAKE UP A LOT OF TIME.) Many of our donors give during their lifetime or create a bequest in their will. Community foundations work closely with donors and/or professional advisors to find the perfect match for donors’ charitable goals. At any time, and for any reason, you can add to an existing fund or create a new fund! There is a wide variety of giving options available to you including: Outright Gifts Gifts of cash, appreciated securities, real estate or other assets Bequests Designate a portion of an estate Retirement Plans IRA’s, etc. By naming the Community Foundation as beneficiary of a retirement plan, 100% stays in the community Insurance Insurance policies can be named to the Community Foundation in total or even a portion Charitable Gift Annuity A way to make a gift to your favorite charity, and still receive an income for yourself or others. Charitable Lead Trust Trust pays the Community Foundation a fixed amount for a number of years and then assets go to beneficiary Charitable Remainder Trust Trust pays beneficiary for life and then assets transfer to the Community Foundation Again, if you have a charitable intent, we can help you! [Click]
Donors can create a personal legacy in their community by establishing a fund in their name. We also have many donors who want to honor their family…or maybe their parents, and establish a fund in their family’s name. And businesses and other organizations can establish funds in these names too. A named endowment fund can be established with $5,000. All grants distributed from their named fund – today and in the future – are then awarded to charities in the name of their fund. It’s a great way for donors to always be remembered for how much they cared for our community. [Click]
( Note to presenter : It might be a good to provide a handout with all types of funds listed and note that if anyone is interested in knowing more they can visit with you after the presentation. THIS SLIDE DOES NOT NEED TO TAKE UP A LOT OF TIME.) Community foundations offer many different types of Funds. Here are two types of funds that allow people to support the most broad community needs. Unrestricted Fund Meeting ever-changing community needs Field of Interest Fund Addressing needs in an important area of community life (e.g. women’s fund, education, environment, health, etc.) [Click]
( Note to presenter : It might be a good to provide a handout with all types of funds listed and note that if anyone is interested in knowing more they can visit with you after the presentation. THIS SLIDE DOES NOT NEED TO TAKE UP A LOT OF TIME.) Community foundations can also establish funds allowing the donor to be very involved in making recommendations for uses for their gift. Here are two examples: Donor Advised Fund Involving donors in the use of their gift Scholarship Fund Benefits students seeking higher education [Click]
( Note to presenter : It might be a good to provide a handout with all types of funds listed and note that if anyone is interested in knowing more they can visit with you after the presentation. THIS SLIDE DOES NOT NEED TO TAKE UP A LOT OF TIME.) Finally, community foundations also offer funds to support specific non-profit agencies – established by a donor or the agency themselves: Designated Fund Directing gifts to specific agencies or purposes (e.g. Big Brothers/Big Sisters) Agency Endowment Fund Used by non-profits to build permanent financial support for their organization Funds can be created in your name, your family’s name, or the name of a loved one in any of these categories. [Click]
Donors will find great benefits to giving through the Waverly Community Fund. [Click]
More specifically, there are some tax benefits offered exclusively through community foundations in Iowa. First of all, Endow Iowa Legislation offers a 25% state tax credit for donations to endowment funds at qualified community foundations like the Community Foundation of Northeast Iowa. This credit is in addition to Federal tax deductions! [Click]
Here is an illustration of just how Endow Iowa works and what it really costs to give to an endowment fund at a qualified community foundation in Iowa. (explain slide) [Click]
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The purpose of Community Foundation Geographic Affiliates (Affiliates) is to carry out the mission of the Community Foundation within a specific geographic area served by the Community Foundation. An Affiliate may have its own statement of mission, but not one in conflict with the mission of the Community Foundation. Affiliates do not have separate legal or tax status, they do not have their own IRS 501(c)(3) status, but rather operate as programs of the Community Foundation. All Affiliate activities will be consistent with policies and procedures of the Community Foundation, including this Policy, as such policies are revised from time to time. All Affiliate activities shall be under the ultimate direction and control of the Community Foundation’s Board of Directors. [Click]
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Create procedures for the Affiliate and manage its regular operations, including: Implement procedures related to the composition and orderly succession of the Affiliate Governing Committee. (It is recommended that there be term lengths of 3 years, with a maximum of two sequential terms and a minimum one-year hiatus before allowing a third or future terms.); Provide for election of officers. Minimally, there should be a Governing Committee Chair and a Secretary. Additional positions may be determined by the Affiliate; Develop a regular schedule of meetings and minutes and provide copies of minutes to the Community Foundation; Form additional committees or task forces to undertake specific activities (e.g. a grants committee, development/education committee); Make recommendations to the Community Foundation regarding contracting with consultants to provide services to the Affiliate. Should an Affiliate wish to employ staff dedicated to its work, such employee(s) officially would be employed by the Community Foundation. Hiring, supervising and firing of the employee(s) would be arranged jointly by the Governing Committee and the CEO of the Community Foundation and the Community Foundation’s Finance and Operations Director; Provide for regular communication with Community Foundation staff concerning Affiliate activities. [Click]
Build permanent endowment funds as well as non-permanent funds to meet the charitable needs of the Affiliate community: Coordinating with the Community Foundation’s Director of Outreach or President & CEO, seek charitable assets in the form of unrestricted, field of interest, donor advised or designated funds, through active donor identification and solicitation; and Undertake appropriate public relations/visibility efforts, working in coordination with the Community Foundation’s own activities in these areas. [Click]
Establish and carry out a local grant-making program, in coordination with Community Foundation’s Program Director: Develop grant-making guidelines and procedures, including charitable objectives and priority areas to guide funding recommendations; Receive and evaluate proposals submitted to the Affiliate in keeping with its grant program; and Submit recommendations for competitive discretionary grants from Affiliate fund(s) to the Community Foundation’s Board of Directors. [Click]
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Finance and Administration: Completion of annual federal and state tax returns (as part of Community Foundation’s returns); Annual audit (part of Community Foundation’s audit); Investment management of Affiliate fund(s) assets as part of the Community Foundation’s pool of funds; Distribution of funds to and from Affiliate funds and/or funds identified with the Affiliate Quarterly financial statements indicating the balance of the Affiliate fund(s) and/or funds identified with the Affiliate and all fund activity including investment returns, contributions received on behalf of those fund(s), and disbursements made from those fund(s). [Click]
Program and Grant making: Program Director’s assistance regarding best practices in grant review and due diligence, including assistance with preparation of guidelines for grant applicants; Use of Community Foundation grant application and forms (if desired); Centralized administration of the application review process Grant processing, including grant award letters, contracts, grant payments, and progress reporting. [Click]
Development and Donor Relations: Consultation regarding planned giving and fund development; Preparation and execution of a fund agreement for every fund established by and/or to be identified with the Affiliate specifying the name, scope of charitable purpose, manner of distribution and any additional advisors to the fund; Use of templates for educational information for potential planned giving donors to the Affiliate fund(s) and/or to funds to be identified with the Affiliate; requests for this service will be reviewed and approved by Outreach Director and/or Communications Director. Participation of Development staff in meetings with major prospective donors to the Affiliate fund(s) and/or to funds to be identified with the Affiliate or with prospective Affiliate Board members; Acknowledgement to donors of all gifts to the Affiliate fund(s) and/or to funds identified with the Affiliate for tax purposes Promotion of the Affiliate fund(s) and/or funds identified with the Affiliate among current and new donors to the Community Foundation; and Training and support to Affiliate participants in promotion and development techniques and strategies to identify potential donors [Click]
Public Relations and Marketing: Design template flyers to promote the Affiliate funds and/or funds identified with the Affiliate; Help with press releases about interesting grants from Affiliate funds and/or from funds identified with the Affiliate and major gifts to Affiliate funds and/or funds identified with the Affiliate (as requested by the Affiliate Governing Committee in coordination with the Communications Director Coordination with Community Foundation’s Communications Director in development of an Affiliate’s web page(s); and Listing of Affiliate fund(s) and funds identified with the Affiliate via the Community Foundation’s website and possible promotion in Community Foundation marketing materials. [Click]
General: Orientation of Affiliate Governing Committees regarding the Community Foundation and our role, history and mission, basic functions, governance, management, grant making, etc. of the Community Foundation. Participation of Community Foundation staff in the Affiliate’s annual goal setting and long-range planning; Providing pertinent information to Affiliates obtained from the Council on Foundations, Iowa Council of Foundations, and other related sources; Periodic convening of Affiliates’ representatives to share information, best practices, and ideas for growing each Affiliate; Routine administrative support; and Routine legal services. [Click]
We recognize that everyone has different passions in life and varying ideas of which organizations and missions they want to support; many people even have more than one organization they support regularly. The Community Foundation can provide an outlet for donors to give to a variety of organizations, needs and passions. We have a finger on the pulse of the entire community, allowing you to make the most impact with your gift. We really appreciate you taking the time to learn more about us today. At this time we would like to open it up to any questions you may have.
