How Funds Work
The flexibility of the Austin Community Foundation can mean a lot to you. We can be of service if you want to house the homeless, support the symphony or help our community in many other ways. You can choose or combine any of the five basic types of funds in order to express their charitable intentions.
Many people wonder what to do with their charitable giving when they "just want to help my community." Rather than select specific charities, you might consider an unrestricted fund in the Austin Community Foundation.
At the Austin Community Foundation, we specialize in figuring out just what will help most. Under the guidance of our distinguished Board, the Foundation investigates, defines, and designs solutions for our community's pressing problems. We confer with community leaders, with people on the street. If no one is addressing the issue, then we find someone who will.
The income earned by unrestricted funds allows us to engage in long-term solutions to problems like hunger and homelessness; to respond quickly to civic emergencies; to build families and inspire artists; to educate, inform and uplift. As conditions change, so do our grants.
By creating an unrestricted fund, you can be assured that the gift will always be used to meet vital needs, improve the quality of life and respond quickly as times change.
FIELD OF INTEREST FUND
Then there is the citizen who may say, "When I grew up, things were simple. Kids today have so many tough choices. I'd like to help children if I could."
And you can. Donors who create a field of interest fund name the cause closest to their hearts. An elderly couple might establish a fund for troubled youth. Or they could choose a more specific focus, like drug abuse prevention, counseling for teen parents, or job training in poor neighborhoods.
Then we go to work, researching and preparing a plan to tackle the problem defined by you for that field of interest. We double-check proposed grants against your charitable intention and any other fund guidelines. After each grant is made (with a check bearing the fund name selected by you), we carefully monitor the results.
The real advantage of field of interest funds is that they keep up with the times. We will always have young people to be concerned about. But many of today's youth problems weren't around 30 years ago, and neither were the charities that address them. Most of tomorrow's issues can't even be guessed at today. Rather than locking your fund into a few specific charities that may be good today (but gone tomorrow), the Austin Community Foundation places your field of interest fund grants in the best hands at the right times, in perpetuity.
Other donors want certain charities to benefit from their fund. Some donors wish to give precise and specific instruction for the Austin Community Foundation to administer. Or they may wish to support a fledgling charity but aren't quite sure it's ready to manage an endowment fund. Sometimes a donor wonders what will happen to a direct gift if the charity goes out of business.
A designated fund in the Austin Community Foundation can solve all these worries. We take care of the investments, and regularly pay the fund's earnings to the charities named by the donor. We make sure the charities stay legitimate and stay open.
If the unexpected should occur, and a charity ceases operation, we will be able to redirect the donor's funds to a similar charity without losing time or depleting the fund by going to court. Our staff will carefully review the facts before presenting such a recommendation for action by the Board of Governors.
DONOR ADVISED FUND
Wealthy families face a myriad of charitable requests. Just managing the correspondence and check writing can overwhelm the charitable impulse. Plus, there is no place to hide from all those well-intentioned solicitors.
That is why we created donor advised funds. You can refer requests to us, give anonymously, or suggest we make grants to certain charities recommended by you. Then we take care of all the clerical chores.
Although our Board of Governors is not obligated to accept your advice and is free to make its own decisions on distributions from all advised funds, we take each donor's recommendations and advice very seriously.
AGENCY ENDOWMENT FUND
Non-profit agencies often desire to have regular income for operations. Many times, agencies are not set up to financially manage an endowment (often due to the size of the endowment) in a very effective manner. A permanent endowment for non-profit organizations which will provide perpetual support for a specific agency is created by this type of fund. A donor can establish such a fund with the Foundation or a charity can ask the Foundation to hold its endowment.
Many private foundations were originally created by donors who wished to recognize outstanding individual achievement through scholarships, grants or awards. However, since 1969, the Internal Revenue Service has imposed complicated requirements on foundation grants to individuals that have discouraged the widespread human impulse to reward merit.
As a community foundation, we are exempt from these requirements. You simply identify the type of individuals you wish to assist and the criteria to be used, and we do the rest. Our Board ensures that scholarships and grants are distributed in an equitable manner.
Donors may stay involved with the scholarship program through an advisory relationship or a committee to assist in announcing the program and selecting the recipients. We handle any necessary paperwork with academic institutions.
SPECIAL PROJECT FUND
In certain situations, an opportunity presents itself to the community to accomplish a charitable goal if there were a way to marshal and direct resources to a specific target on a "one-time" or a very short-term basis. This situation does not call for the establishment of another new charitable organization. A fund can be established within the Austin Community Foundation that allows all contributions to be collected and directed to a common point of solution or benefit.
If the Board of Governors of the Austin Community Foundation determines that the creation of this type of short-term fund is an appropriate response to benefit the community, then this type of activity can be handled by the Austin Community Foundation at no cost to the donors or beneficiary. These funds are reviewed on a case-by-case basis for determination as to feasibility. This is referred to as a special project fund for it is created only for the successful creation of a specific project to benefit the community.
The Austin Community Foundation also has the capacity to facilitate a donor's wish to fund several charities from a single gift. There are situations where it makes good economic sense to make a gift of an asset that has appreciated in value since its acquisition. This type of asset may present some difficulty in dividing for gift purposes, i.e., a single stock certificate or a single tract of land to be liquidated to provide cash gifts to charities.
Usually at no cost to the donor or grantee, the Austin Community Foundation can act as a conduit for those multiple gifts to be made of a single asset. The donor simply establishes a pass-through fund that accepts the single gift with the instructions that the asset be sold and the proceeds divided according to the donor's instructions.
Get tips to establish a fund here.
Contact us today to get started.