Investing

Since 1984, area residents have been turning to the Community Foundation of Grant County, Indiana to make their philanthropic giving as impactful as possible. We are a public charity serving thousands of people who share a common concern—improving the quality of life in Grant County. To do this, individuals, families, businesses, and organizations create endowed charitable funds that help our area meet the challenges of changing times. The Foundation invests and administers these funds. We then use the distributions to award grants each year to the humanitarian, educational, and cultural organizations in this remarkable county we call home.

Think of us as your philanthropic consultants. A trusted resource for professional advisors.

Community Foundation Basics

What is a Community Foundation?

The concept of a Community Foundation is as ingenious as it is simple-it is a means to build, over time, substantial endowment funds for a community through contributions large and small. Because these contributions are endowed, they are never spent. Instead, they are permanently invested to produce income. The income earned is then used to help meet the community’s charitable needs-from social work to art to culture. So, gifts to a community foundation continue to benefit your community forever. This is philanthropy in its broadest sense. The best way to show you how this really works is to demonstrate with our Giving, Growing, Grantmaking Model.

Giving, Growing, Grantmaking Model

Giving:
Donors make gifts to the Foundation

Growing:
Gifts are invested; the value grows

Grantmaking:
Endowment income benefits charitable causes and the community

Working Together

We work through you.
You stay in control of your client relationships; we’re here to help.

We partner with you.
We provide support, information, and expertise on charitable giving.

We help you build stronger relationships.
Your clients will appreciate the charitable impact and tax advantages you help them achieve.

We help you connect across generations.
When you help families establish a fund with us, you stay involved for generations.

Working With Clients

Some of the greatest opportunities to make charitable gifts arise when making major business, personal, and financial decisions.

Year-end tax planning ● Strategic giving ● Sale of business ● Closely held stock ● High estate taxes ● Retirement planning ● IRA and 401k ● Sale or disposition of highly appreciated assets ● Major life-altering event ● Gifting through Insurance ● Gift Annuities

Making a Gift to the Community Foundation has many benefits for your clients:

  • Simplicity: One contribution to the unrestricted fund of the Community Foundation will address many charitable organizations and needs in Grant County.
  • Flexibility: The Community Foundation will, of course, honor a donor’s wishes regarding a designated beneficiary or area. However, if the intended purposes of the gift should ever become obsolete, the Foundation’s authority to amend provisions of the fund means it will be directed toward related concerns.
  • Tax Benefits: The Community Foundation of Grant County qualifies as a public charity under federal tax law. Thus, contributions qualify for maximum tax deductibility for income, gift, and state tax purposes.
  • Permanence & Continuity: A Gift establishing a permanent fund with the Community Foundation will continue to benefit the community well into the future. The size of a fund can be increased at any time through additional gifts.
  • Professional Management: The funds of the Community Foundation are invested and managed by professional investment managers. The Finance and Investment Advisory Committees of the Foundation review the performance of the managers on a regular basis to ensure the Foundation’s investment objectives are met.
  • Public Accountability: As a community foundation, funds are used for the public interest. All grants are publicly disclosed by the Foundation.
  • Transparency: We comply with National Standards which assist community foundations in establishing legal, ethical, and effective operating practices that show a foundation’s transparency and financial responsibility.
Discussing Philanthropy

TEN REASONS WHY YOU SHOULD DISCUSS PHILANTHROPY WITH YOUR CLIENTS

Research conducted by The Philanthropic Initiative (TPI) with professional advisors on their motivations for, and methods of, providing advice about philanthropy revealed the following reasons for discussing philanthropy with clients.

  1. It’s good for society, it’s good for your community, it’s good for your clients, it’s good for your business, and it’s good for you.
  2. Many of your clients are searching for an effective way to give back to their community, to memorialize a loved one and/or simply to “do good”. You can help them achieve these results, and derive personal satisfaction from doing so.
  3. Discussing philanthropy with your clients should be done unobtrusively in a way that respects their privacy, values, and autonomy. You are among the best positioned to initiate and engage your client in these conversations.
  4. By expanding the menu of services offered to your clients, you build confidence and increase levels of satisfaction with you and your professional services.
  5. Your areas of expertise as a professional advisor are personally broadened.
  6. The potential for new referrals is enhanced, opening the door to many new clients.
  7. You effectively connect your chosen profession with a personal desire to do something good for your community.
  8. Through your efforts, important social needs in your community can be addressed, producing a healthier, more vibrant place to live – an enduring legacy of real benefit to future generations.
  9. You become part of a supportive network of like-minded colleagues who are willing to voluntarily share their time and expertise.
  10. With practice, confidence and experience, you will find it easy to do…
Investment Comparisons

Help your clients realize their charitable goals. While foundation’s offer numerous benefits donors, not all donors can keep up with the demands required in hosting their own personal private foundation. That’s where we come in. The chart below describes the benefits we can offer your clients.

PRIVATE FOUNDATIONS VS. COMMUNITY FOUNDATIONS

Private Foundations Community Foundations
Legal Status Independent organization 501(c)(3) tax exempt corporation or trust A Donor-Advised Fund within an existing Community Foundation 501(c )( 3) tax exempt organization
Initial Gift Establish a new entity requiring legal filings, board of directors, and administration; may take several months Entity already exists and has experience; paperwork can be completed in one day
Practical Minimum Asset Size Substantial assets, probably over $1 million $5,000 Endowment Fund

 

Distribution Rules Minimum annual charitable distribution – 5% of net investment assets No minimum distribution requirements as long as fund is active.
Investment Restrictions Cannot own more than 20% of stock in a business No limitations on control of a business
Annual IRS Reporting IRS information return (Form 990 PF) No annual reporting requirements by the donor
Investment Income Tax Pay 1% to 2% tax on net investment income No tax on investment income
Cost Can result in significant cost to client Simple, and at no cost to donor
Your Toolkit

Sample Fund Agreements–Fund agreements are legal contracts between a donor and the community foundation.

Giving Through Insurance–Did you know that you can purchase an insurance policy, name the Foundation as the beneficiary, and receive a tax-deduction for the annual payments. It’s true. Here’s how.

Sample Bequest Language–Leaving a bequest (property given by will) is one of the easiest gifts to make. With the help of an attorney, you can include language in your will or trust specifying a gift to be made to family, friends, or the Community Foundation as part of your estate plan.

Donating Stock–Donating stock is almost as simple as calling your financial advisor! This is especially important if you have a Required Minimum Distribution (RMD) that you’d like to donate directly to charity. Use this stock transfer form, or contact us for instructions about how to move the stock. It’s one of the easiest ways to give!

Donor Bill of Rights–Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To assure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the not-for-profit organizations and causes they are asked to support, we declare that all donors have these rights.

Privacy Policy–At the Community Foundation, we maintain information on volunteers, donors, and potential donors for the purpose of keeping accurate financial records and providing information about the Community Foundation. We do not share information on donors or potential donors with anyone outside our organization without the permission of the donor.

Gift Acceptance Policy–The following policies and guidelines govern acceptance of gifts made to or for the benefit of any of the Community Foundation funds or programs.

Fund 411–Do you need to find out about the benefits and fees for both Endowed Funds and Pass-Through Funds? Which one is best for you? The Fund 411 will help to answer all of your questions.

GuideStar– The world’s largest source of information on nonprofit organizations. It is a 501(c)(3) public charity that collects, organizes, and presents the information you want to know about a nonprofit in an easy-to-understand format while remaining neutral. The Community Foundation of Grant County has earned a Gold Star on GuideStar.

National Standards–Is a U.S. Community Foundations Accreditation Program that certifies U.S. community foundations that meet and exceed federal and state law requirements in practice and by policy. The accreditation process is rigorous, and undertaking it demonstrates a community foundation’s commitment to accountability and excellence to its donors, its community, policymakers, and the public.

Investment Decisions

All investments are carefully guided and motivated by:

 – Strict adherence to the Investment Policy.
– Quarterly performance reports and professional financial consultation provided by Capital Cities LLC.
– The Foundation Finance Committee which conducts periodic reviews.
– Local Investment Advisors which conduct periodic reviews.

Financial Objectives

The objectives of the Board have been established in conjunction with a comprehensive review of the current and projected financial requirements. The objectives are:

1. To allocate total earnings from the Foundation’s endowment portfolio between current spending and reinvestment for future earnings while providing a dependable growing stream of income to beneficiaries of Foundation grants. Achievement of these objectives will ensure that the Fund preserves the real purchasing power in perpetuity while providing ongoing operational support to designated charitable activities.

2. To apply a smoothing rule to mitigate the effects of short-term market volatility on spending. The following smoothing rule will be applied:

Foundation’s spending policy is to spend 4.5%, 4.25%, or 4.00% (stepped according to average balance) of a 5-year moving average of quarterly market values. In the early stages of fund accumulation, however, the Finance Committee may recommend, and the Board may adopt an interim spending policy of 4.5% of a one year moving average of quarterly market values. This spending policy establishes the resources available for grant spending only. Operating expenses are outlined in the following paragraph. Amounts which remain unspent at the end of the year may be carried over for disbursement in the following years.

The Foundation will assess a 1.5% administrative fee annually to all endowed funds. If a scholarship fund recipient is chosen by a committee of the Foundation, then an additional .5% will also be charged annually. This fee is used to offset expenses associated with managing and administering all endowed funds.

3. The Finance Committee, with Board approval, reserves the right to take exception to the set Spending Policy in order to meet current conditions.

4. To control both administrative and investment costs.

5. To maximize return within reasonable and prudent levels of risk.

6. To maintain an appropriate asset allocation based on a total return policy that is compatible with a flexible spending policy, while still having the potential to produce positive real returns.

Contact Us

Dawn Brown

Executive Director

Dawn@GiveToGrant.org
765-662-0065