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Guiding Your Clients

Why should my client establish a fund at the Washington County Community Foundation (WCCF)?

The WCCF can help your clients accomplish their personal philanthropic and estate-planning objectives in a cost-effective fashion. We work closely with local charities and other institutions to understand the current needs of the community, and can assist clients who wish to make meaningful grants to address those needs.

Is the WCCF for clients interested in giving now, or through an estate plan?

Actually, both. Many donors wish to see the impact of their charitable giving during their lifetimes, so they create funds from which grants are immediately distributed. Other donors will choose to do all of their charitable giving through an estate plan. It is also common for donors to execute fund agreements during their lifetimes, and then include that named fund in their estate plan. Whatever works best for your client, we are here to assist.

Is the WCCF just for endowed (perpetual) funds?

No. While most component funds are endowed with grants issued from earnings of the fund, we also manage funds from which grants are issued from fund principal.

How can I help my client create a fund?

The WCCF uses a simple “Letter of Agreement” format to establish a fund. Sample documents and bequest language are available by contacting the Foundation.

How much money is needed to create an endowed (perpetual) fund within the WCCF?

Endowed component funds are established with a minimum gift of $25,000, which can be paid over a period of five years. The minimum for a pass-through fund is determined on a case-by-case basis.

Is the WCCF just for donors interested in helping local organizations?

No. As a donor service organization, we strive to help donors achieve their charitable goals, which could include supporting charities in other communities or supporting national charities.

Can my client’s fund benefit individuals?

No. Grants may only be distributed to institutions providing charitable programs as defined by the Internal Revenue Service.

May clients give to an existing fund at the WCCF?

With just a few exceptions, existing component funds accept contributions from others.

What is a Donor Advised Fund?

A donor advised fund is a grant-making fund which enables donors or their designee to annually recommend the charitable cause or charity to receive a grant.

What administrative fees are charged?

There is no fee to create a fund. For perpetual funds, there is an annual administrative fee of 2% of the fund’s market value, which is assessed quarterly. Reduced rates are available for funds of significant value. For pass-through funds, the administrative fee is determined on a case-by-case basis and normally ranges from 1% to 10% of contributions. The fee is assessed when the contribution is received.

How does the WCCF manage its endowment?

Most endowed funds of the WCCF are pooled and operate under a single investment policy with a primary objective of increasing the purchasing power of endowed funds over time. The WCCF Investment Committee closely monitors investment performance and holds investment managers accountable to specific benchmarks. We also measure ourselves against our peer community foundations.

The WCCF will also accept, on a case-by-case basis, component funds that follow an individualized investment policy and/or expect the fund’s investment to be managed by the donor’s preferred investment professional. Such individually invested funds will be considered for a minimum gift of $500,000.

How is a community foundation different from a private foundation?

The distinction between a community foundation (a public charity) and a private foundation is a matter of federal tax law.

A community foundation is a collection of component funds created by multiple donors which operate under the administrative umbrella of a single corporation organized under Section 501(c)(3) and Section 509(a)(1) and 170 (b)(1)(A)(vi) of the Internal Revenue Code. Community foundations typically solicit and receive contributions from multiple individuals and institutions in a defined geographic area. They typically operate broad-based grant-making programs, and they also distribute specific grants as defined by original donor agreements. Donations to a community foundation generally qualify for higher tax deduction than those to a private foundation. As many different funds are pooled at a community foundation, the investments are more easily diversified and administrative costs are typically less. A single audit and a single 990 filing cover all component funds operating within a community foundation, so donors need not be concerned about these management issues. Community foundations pay no tax on their earnings so greater amounts are available for grant-making. And there are no minimum payout requirements, so funds can accumulate earnings for some future charitable project.

A private foundation is a corporation organized under Section 501(c)(3) of the Internal Revenue Code which does not fall into one of the categories specifically excluded from the definition of that term. Private foundations are typically financially supported by one or a small handful of sources – an individual, a family, or a corporation. There is an excise tax on the net investment income of most domestic private foundations. In addition, there are several restrictions and requirements on private foundations, including: (1) restrictions on self-dealing between private foundations and their substantial contributors and other disqualified persons; (2) requirements that the foundation annually distribute income for charitable purposes; (3) limits on their holdings in private businesses; (4) provisions that investments must not jeopardize the carrying out of exempt purposes; and (5) provisions to assure that expenditures further exempt purposes.

What is the WCCF’s greatest need regarding community grantmaking?

Our greatest grantmaking need is for discretionary grantmaking assets which enable us to issue grants to address the community’s changing and unmet needs. Your client could help by making a gift to one of our Strategic Initiative Funds.

What is the WCCF’s greatest need regarding its own capacity?

Our greatest need for the WCCF is for unrestricted administrative (operational) gifts, which can be used to support the charitable activities of the WCCF. So many of our charitable activities, such as the educational sessions we host for local charities, our annual giving event WCCF Gives, and our ongoing needs assessment Community Snapshot, are provided free of charge. Administrative gifts to the WCCF will enable us to continue to provide these valuable services to the community and to add new services over time.

What else do I need to know?

We are here to help you help your client accomplish their charitable goals so please view us as your philanthropic resource. Meetings can be arranged to meet your client’s schedule and timeframe.