WHAT IS AN ENDOWMENT FUND?
An endowment is a permanent fund that provides income each year to support a charitable cause. Endowment funds at the Community Foundation are professionally managed to ensure the funds remain strong over time. Currently, Community Foundation funds pay out up to 5% of the average fund balance.
WHAT IS THE 2020 ENDOWMENT CHALLENGE?
The Community Foundation of Dunn County is offering challenge grants to help (5) local nonprofits build an agency endowment fund. Eligible nonprofits can apply to receive a $5,000 “challenge” or “matching” grant, to help them leverage an additional $5,000 through their own fundraising efforts, for a total of $10,000 to open an Agency Endowment Fund at the Community Foundation of Dunn County. For consideration, nonprofits must complete the Challenge Grant Application form and submit by the deadline on Monday, February 3rd, 2020.
WHAT IS THE TIMEFRAME FOR MATCH ELIGIBILITY?
Nonprofits must raise the $5,000 match within 12 months of the award date, on or before May 6, 2021. Funds must be gathered after the CFDC award date in May 2020 and be used specifically for the approved endowment purpose outlined in their grant application. Only check/cash donations made to your organization are eligible for the match. Pledged gifts will not be accepted as matching funds.
WHAT TYPE OF FUNDS ARE ELIGIBLE FOR THE MATCH?
Funds eligible for match may be new cash or transfer of existing endowment funds held elsewhere. CFDC can also help agencies with transfers of stock, closely held stock, and real estate. The nonprofit must use the sum total of all contributions to make a single contribution to the Community Foundation to establish the endowment fund match. At that time, the Community Foundation will initiate the matching funds of up to $5,000 to open the agency’s endowment fund.
WHAT ARE THE ADMINISTRATIVE FEES FOR THIS TYPE OF FUND?
The Community Foundation is a not-for-profit organization and charges an administrative fee, reviewed annually by its Board of Directors, to cover the costs of its operations. Agency funds currently enjoy the lowest fee for any fund type, which is currently calculated at 1% annually.
WHEN ARE THE MATCHING FUNDS AVAILABLE?
Once the fund is established at $10,000, anyone can contribute to an organization’s future by making a gift of any size to its endowment fund at the Community Foundation of Dunn County. No distribution will be made from the Fund until the Fund has been in existence for twelve months. The amount available for distribution shall be determined in accordance with the Foundation’s spending policy, as may be amended from time to time, but currently is an amount up to 5% of the Fund’s balance after calculating the 1% administrative fee, as of September 30 each year. The Fund’s balance is determined using its average over twelve trailing quarters (3 years).
If the $10,000 fund is established before September 30th, 2020, the spendable allotment will be calculated as of September 30, 2021 and will be available for distribution to the agency in January 2022. If the fund is established after September 30th, 2020, the spendable allotment will be calculated as of September 30, 2022 and will be distributed in January 2023.
WHAT ARE THE RESTRICTIONS ON HOW THE FUNDS CAN BE USED?
The Community Foundation has legal ownership of funds contributed to an agency endowment. As such, the community foundation’s board has fiduciary responsibility over the funds. Generally, endowment funds at the Community Foundation provide unrestricted support to advance the mission of a nonprofit organization. For this Challenge Grant program, organizations must specify how they plan to spend endowment distributions, whether on a specific program area, ongoing equipment needs, or general operating purposes.
HOW CAN OUR DONORS CONTRIBUTE TO OUR ENDOWMENT FUND?
During the matching period, donors should make contributions directly to the nonprofit organization, indicating their contribution is for the endowment match. The nonprofit organization is solely responsible for providing acknowledgement letters and tax receipts. The Community Foundation will provide an acknowledgement letter to your organization upon receipt of the $5,000 matching endowment contribution.
WHEN A PUBLIC CHARITY ESTABLISHES AN AGENCY ENDOWMENT AT A COMMUNITY FOUNDATION, WHICH ORGANIZATION OWNS THE CONTRIBUTED FUNDS?
The community foundation has legal ownership of funds contributed to an agency endowment. As such, the community foundation’s board has fiduciary responsibility over the funds.
CAN A NONPROFIT RESERVE THE RIGHT TO FORCE A DISTRIBUTION OF THE FUND (OR A PART OF THE FUND) BACK TO ITSELF?
No. All contributions to the Community Foundation are irrevocable and subject to the legal control of the Community Foundation. Allowing the nonprofit to reserve the right to force a distribution would be contrary to the foundation’s legal ownership of the fund once established.
Follow the link below to continue to the application page. Due February 3, 2020.