What is an agency fund or endowment (permanent)?

It is a long term fund held and managed by The Community Foundation on behalf of a nonprofit organization. The organization receives annual distributions as defined in agreement. The fund is technically owned by The Community Foundation on behalf of your agency.

What is the minimum needed to establish an agency fund?

The Community Foundation will open a long term account for as little as $2500.
The suggested goal is $ 10,000 and the agency is encouraged to make a commitment to achieve that in three to five years.

Who would be managing our fund?

The Board of The Community Foundation working in conjunction with its Investment Committee. This team of prominent community leaders includes a CPA, an attorney, a financial advisor, a securities broker, and a hospital chief of operations who work closely with Dodge and Cox, a prominent national mutual fund company.

What kind of return can we expect?

Our fund performance has varied considerably since our inception. The returns over the past years are available for review. Of course, past performance is no guarantee of future results, and you can stipulate your required pay out amount in your agency agreement. The Community Foundation maintains a balanced portfolio comprised of domestic and international stock, bonds, notes, t-bills, and money market holdings.        

What does it cost?

1% annually, based on the market value of the fund, plus $100 annually. We compute and assess this fee quarterly. The fee is deducted from the fund earnings.

What are the advantages of having an agency fund or endowment with The Community Foundation?

Consolidated investment management provides a better return with lower
administrative costs through economies of scale. The Community Foundation’s Board of Trustees has fiduciary oversight and handles all administrative reporting.

Speed and convenience for donors. This can be especially important for
year-end contributions and situations when stock or real estate is in the
process of being sold and time is of the essence.

Agencies receive an exemption from filing a tax return or reporting on this
fund since the fund’s financial transactions are consolidated with those of other funds on The Community Foundation’s Form 990. We provide quarterly reporting to your agency and staff of investment fund performance.

Agencies receive access to donors who structure all their gifting through one source at The Community Foundation and who can name your agency as a partial beneficiary of their philanthropy.

The Community Foundation has access to the legal staff of The Council on Foundations and our own community legal experts for assistance when structuring complex gifts such as property, and current updates on new tax implications for charitable gifts.

Donors receive assurance that their money will be managed in perpetuity, which is helpful with new or relatively small agencies without established track records. The Community Foundation’s fiduciary role allows for
follow-through of the original intent of a gift or fund.         

Who owns the fund?

The Community Foundation Serving Southwest Colorado owns your funds on your behalf as a designated agency fund or endowment. The Community Foundation holds, manages, invests, and reinvests the assets of the fund. Your organization may request that distributions of principal be made from the fund and The Community Foundation will give good faith consideration to those requests. The Community Foundation presently holds agency funds and endowments from a wide range of nonprofit organizations which have fund assets ranging up to six figures.
 

Advantages of Agency Endowments/Funds

1. Consolidated investment management provides a better return with lower administrative costs through economies of scale. You increase your income with fewer hassles.
2. Our trusted, experienced management team inspires confidence with potential donors. You save time and money by not hiring an endowment specialist.
3. Donors receive assurance that their money will be managed in perpetuity even if your agency ceases to exist. You may gain new donors NOW.
4. Access to donors who structure all their gifting through one source at the Community Foundation and who can name your agency as a partial beneficiary of their philanthropy. You may get new prospects.
5. Access to pro bono professional advisors, attorneys and accountants who have special expertise on recommendations for structuring charitable gifts for prospective donors as well as for the agency staff and board. You don’t have to find or hire these experts.

Access to the legal staff of the Council on Foundations, of which our Community Foundation is a
member, for assistance ins structuring complex gifts such as property or other lifetime gifts which
require special consideration and current updates on new tax implications for charitable gifts.
You don’t have to hire legal assistance.

Exemption for the agency from filing a tax return or reporting on this fund since the fund’s financial
transactions are consolidated with those of other funds in the Community Foundation’s Form 990.

Fiduciary oversight of the management and reporting of the endowment provided by the Board of
Trustees of the Community Foundation working in conjunction with its Investment Committee. The
Board’s conflict of interest policy assures that investment decisions are made which are in the best
interests of the agency.

Speed and convenience for the donors. This can be especially important for year-end contributions
and situations when stock or real estate is in the process of being sold and time is of the essence.

Regular reporting to your agency and staff of fund performance. You don’t have to write reports.

Low fee: 1% per year of fund market value + one hundred dollars. We calculate and assess this fee quarterly. The fee can be deducted from the earnings.