Community Foundation of Abilene : Give : Creating a Fund
Articles
Three simple steps to make a Gift that never stops Giving...
1. Choose a name for the fund
A fund's name stays with it forever. Whenever a grant is made from a fund, it is recognized by name. Thus, donors should give careful thought to their fund's name.
Possibilities and examples of each include:
- The name of the person(s) establishing the fund(the Ralph and Nelle Hooks Unrestricted Fund)
- A family name(the Beckham Family Fund)
- A favorite cause(the Maggy Morford Fund for St. John's Episcopal School)
- A memorial(the Arthur Jay Beitscher Memorial Fund)
- An anonymous fund(the We Care Fund)
2. Focus your fund on the impact you want to make
Donors may designate their funds in one or more of the following ways:
- Unrestricted: Preferred by donors who want their fund always to address the community's highest priorities. The Foundation urges all donors to designate at least a portion of their fund for unrestricted purposes to help ensure resources for special projects and unanticipated needs in the future.
- Field of Interest: Used by donors who want to support an area of special interest, such as education, the arts or a particular geographic area.
- Designated: The choice of donors who want their fund always to support specific charitable agencies.
- Agency Endowment: Initiated by agencies and their donors to serve as an endowment supporting the organization's work.
- Donor Advised: Popular with donors who want to play a significant role in decisions about the use of fund proceeds. Advised fund donors make grant recommendations to the Foundation Board of Trustees. Donor advised funds can be endowed or non-endowed.
- Supporting Organization: An appealing alternative to private foundations. A supporting organization has its own board, letterhead, checkbook and investment manager, but qualifies for the preferential tax treatment afforded community foundations. The purposes of a supporting organization must be compatible with the Community Foundation of Abilene, and a majority of its board (not necessarily its officers) must be appointed by the Foundation.
3. Choose the best way to make your gift and leave your legacy
- Bequests: Establish a fund through your will.
- Charitable remainder trusts: The donor and/or other named beneficiaries retain a life income and earn immediate and long-term tax benefits. Upon termination, assets go to a charitable fund named and designed by the donor. Using assets remaining in IRAs to create charitable unitrusts can offer significant tax advantages to larger estates.
- Insurance: Name the Community Foundation of Abilene as owner and beneficiary of an insurance policy to be used to establish a future charitable fund. The donor earns an immediate tax deduction and any additional premium payments are deductible, as well.
Gifts that go to work immediately:
- Cash
- Securities: For both closely held and publicly traded stocks, the charitable deduction is based on full market value. Capital gains taxes on appreciation are also avoided.
- Real Estate: If held for more than a year, it usually provides the same benefits as gifts of securities.
