FAQ for Professional Advisors

Why should my client establish a named fund at the Washington County Community Foundation?

The Washington County Community Foundation can help your clients accomplish their personal philanthropic and estate-planning objectives in a cost-effective fashion.

Is the Washington County Community Foundation for clients interested in giving now, or through an estate plan? 

Actually, both. There are currently over 150 different funds operating within the Washington County Community Foundation. Most are endowed to provide perpetual support for causes or organizations favored by the original donors. It is also possible to create funds that distribute part, or all, of the original gift over a period of time. 

At other times, 100% of a gift immediately passes-through the Washington County Community Foundation to a favored charity.

How do we create a fund? 

Washington County Community Foundation uses a “Letter of Agreement” format to establish a fund.  This simple document outlines the purposes of the fund so that we are clear on the donors intentions. Funds can be created within a day with no costs. Washington County Community Foundation annually distributes sample documents to a wide-array of professional advisors. 

If you’d like some sample documents for your office, please contact the Foundation by calling (724) 222-6330.

How is a community foundation different from a private foundation? 

A community foundation is a collection of named funds all operating under the administrative umbrella of a single, publicly-supported, entity. Community foundations typically operate broad-based grant making programs. They also distribute specific grants as defined by original donor agreements. 

Donations to a community foundation generally qualify for higher tax deduction. As many different funds are pooled, administrative costs are typically less. A single audit and a single 990 form cover all funds operating within a community foundation. Community foundations also pay no tax on their earnings. There are no minimum payout requirements and funds can accumulate for some future charitable purposes. 

While professional advisors vary on the specific amount, many will agree that private foundations are not cost-effective for donations of $1 million or less. 

The end result of this pooling of funds is the saving of administrative costs; making more money available for worthy charities.

How much money is needed to create a named fund within the Washington County Community Foundation?

Generally speaking, named funds are established with minimum gifts of $25,000. A donor may also create a fund over a period of five years.

What if my client just wants to remember charity through a will or other estate plan? 

That’s perfect! The Washington County Community Foundation can provide you with sample language for inclusion in a will or estate plan.

Is the Washington County Community Foundation just for donors interested in helping local organizations?

Our unrestricted grant-making endowments are limited to organizations serving Washington County. Income from these funds is distributed to a wide variety of local organizations through an open, widely publicized, and competitive grant-making process.

Donors may also create funds to benefit their favored causes throughout the country.

Can my client’s fund benefit individuals?

No. Grants may only be distributed to charitable organizations.

What about scholarships?

Washington County Community Foundation has nearly 30 different scholarship funds. These are very popular with donors. Foundation staff can help with language to insure the scholarship is operating legally. There is no need for advance IRS qualification of the scholarship fund.

What is a Donor Advised Fund?

With a Donor Advised Fund, the donor or designee may annually recommend the charitable cause to benefit.

What about fees? 

There is no fee to create a new fund. Once the fund is created, there is an annual administrative fee charged to each fund.  The fee is a percentage of the fair market value of the fund as of December 31, averaged over a 3-year period. Currently, the administrative fee for permanent funds range from 1% to 2%.

How does the Washington County Community Foundation manage its endowment?

Generally speaking, all endowed funds within Washington County Community Foundation are pooled and operate under a single investment management policy. Our primary investment objective is to preserve, and enhance, the charitable “purchasing power” of endowed funds over time.   

The Washington County Community Foundation finance committee closely monitors investment performance. Individual managers are all held accountable to specific benchmarks. When necessary, changes are made. We also measure ourselves against our peers.

What else do I need to know? 

We are here to help you and your client accomplish charitable goals. We understand decisions are made on the client’s timetable, so we are always happy to meet with you.  Please view us as your philanthropic resource.