14 Mar Fund types tailored to your charitable goals
Just as each person has a unique estate plan and financial plan to meet their particular situation and goals, most needs a unique charitable giving plan. For example, for some, giving shares of highly-appreciated stock consistently every year to their fund at the foundation makes the most sense for their charitable goals and their mix of assets. For others, leaving a bequest to the Foundation to support specific areas of interest is the best fit for their financial situation and community priorities.
The McPherson County Community Foundation offers charitable giving vehicles to meet a wide range of donors’ needs. In many cases, a single donor can benefit from setting up multiple funds of different types.
Here’s a quick primer on a few of the most popular fund types.
Donor-advised Fund
This type of fund allows the donor and his or her heirs to recommend grants for a different charitable purpose each year providing great flexibility to the donor while avoiding the costs and demands of a private foundation. The donor recommends the recipients of earnings from a donor advised fund. Qualified recipients are organizations with a 501(c)3 designation located throughout the United States or foreign country.
Unrestricted ‘Dream ‘Fund
MCCF has its finger on the pulse of the community’s most pressing issues. Our unrestricted fund gives us the opportunity to support community needs that can’t be identified until the future. Grants are made from endowment earnings to a wide variety of nonprofit organizations to enhance health care, education, arts and culture, environment, civic and human services, or other charitable initiatives selected by donors.
Field-of-interest Fund
Clients who want to target their giving to specific areas of community need (such as education, health, environment, or the arts) can set up a field-of-interest fund to establish parameters for grant making under the ongoing guidance and expertise of the community foundation’s staff.
Designated Fund
These are funds that support broad charitable causes, such as youth, the arts, health or other interests. A donor who has no preference for a particular charitable organization may establish a named fund in a general area of interest. He or she may suggest grant recipients or may ask the Foundation to make grants to the most appropriate programs within that area based on submitted applications.
Agency Fund
An agency fund is similar to a designated fund, except in the case of an agency fund, the source of the initial contribution is the beneficiary nonprofit organization itself, not a donor or donors as is the case with a designated fund. If you serve on a boards of directors of charities, you’d likely be interested in learning more about agency funds. Indeed, It’s helpful to keep in mind that organizations frequently establish agency funds at the community foundation to set aside endowment reserves or rainy day funds. Our team is adept at navigating the specific accounting standards that are unique to this type of arrangement.
Scholarship Fund
Your can set up funds to support students’ educational pursuits based on the parameters and application requirements you outline with help from the experts at MCCF.
Here’s a pro tip: If you are age 70 ½ and older and consider recommending a Qualified Charitable Distribution from a your IRA to a fund at the Foundation. All of the fund types noted above are eligible recipients, with the exception of only the donor-advised fund.
We look forward to working together to discover the type of fund (or funds!) at the community foundation that could be a good fit for your unique charitable giving needs.
