Types of Funds
An endowment is a way to financially provide for the people, places, and organizations of this community that are dear to you… forever. When you establish an endowment through a charitable contribution to the Community Foundation, we don’t spend your gift; we save it and invest it wisely to grow and produce grants.
There are five basic types of endowments:
Sustaining and supporting local organizations…
Designated endowments designate or name in the agreement the organization or charitable purpose that will receive the grants from the endowment. Donors can name more than one organization and the purpose of the grants can be broadly or narrowly defined. For example, grants can be distributed to your church annually to broadly support operations, or, alternatively, to narrowly support programs such as summer Bible school.
A personal approach to giving…
Donor-advised endowments permit for broad distribution of grants. Donors create a fund with a contribution; the Foundation awards grants to organizations and programs as recommended by the donor or advisor. Donor-advised endowments allow ongoing input from their donors or designated advisors.
Connecting values to opportunities…
Field of interest endowments designate an issue or area of need to receive grants. The donors identify their personal area of interest and the Foundation awards grants to organizations and programs in Wabash County that are aimed at serving that interest or concern.
Investing in deserving students…
Scholarship endowments help a deserving student pursue higher education. Organizations, families, and individuals can establish a scholarship endowment in the Community Foundation and define the eligibility and selection criteria, such as a field of study, academic or athletic achievement, community service experience, or career intentions. Scholarship endowments are often used to honor or memorialize a loved one by awarding a grant to students who mirror the beloved personal traits or achievements.
Meeting the needs of an ever-changing community…
Unrestricted endowments are endowments whose earnings are not designated or restricted to an organization or specific purpose, but rather are free to support a program of perpetual grant-giving designed to respond to the ever changing needs of our community. Distributions from these endowments, called the Good Deeds Endowments, are available to the community by application and are awarded at the discretion of the Community Foundation. Lilly Endowment, through its GIFT (Giving Indiana Funds for Tomorrow) Initiative, has been the principal donor of unrestricted endowments.
There are three types of non-permanent funds:
Non-permanent donor-advised funds are established by individuals or organizations that retain the privilege of recommending grants from time to time. Here, the principal as well as earning are utilized in grants, and additional gifts replenish or continue the fund. The tax advantage to the donor is that they get an immediate tax deduction when the gift is made to the Foundation, but distribution to the beneficiaries can occur at a later date.
Pass-through funds are available as a convenience to donors. The Foundation agrees to receive securities, sell them, and distribute the net proceeds to beneficiaries designated at the time of the gift.
Special project funds are established by the board to support a specific charitable activity or community project that is consistent with the priorities of the community and the exempt purposes of the Foundation.