What can the Foundation do for you?
BENEFITS TO OPENING A FUND AT THE EL DORADO COMMUNITY FOUNDATION
Opening a fund at the El Dorado Community Foundation is easy and comes with a number of significant benefits to help you achieve your philanthropic goals. We are here to work in partnership with you and always happy to answer any questions you might have.
Fiscal Oversight
The El Dorado Community Foundation is an accredited 501(c)3 organization that undergoes an independent audit each year. We ensure the fiscal integrity of more than 300 different funds and process thousands of incoming donations and outgoing grants each year.
Philanthropy Made Easy
A fund at the Foundation provides you the convenience of strategic giving from one place, making things simple for you. We handle all gift acknowledgements for donations to your fund, verification of nonprofits, grant instructions for disbursals from your fund, and more.
Fund Growth Through Secure Investments
Funds at the El Dorado Community Foundation will grow over time from more than just donations. The Foundation uses a conservative investment strategy to steadily grow your fund assets as well.
Impact Focused Fee Structure
At the El Dorado Community Foundation, one of our primary goals is working with donors to maximize the impact they can have on their community. To facilitate this, we strive keep our administrative fees as low as possible, allowing your philanthropy to reach further than ever.
A Team of Professionals
The El Dorado Community Foundation has a dedicated team ready to support the needs of your fund, including marketing assistance, grant processing, online access, your fund’s own giving page, and more. We are your concierge philanthropy service!
ENDOWMENT FUNDS & ACORN ENDOWMENTS
There are two distinct groups of funds at the El Dorado Community Foundation, Endowment Funds and Expendable Funds. Endowment Funds can be thought of as retirement accounts and are designed to facilitate consistent, long-term giving into perpetuity after a set amount of time. Endowments can also be opened as Acorn Funds, allowing a donor to invest in their future philanthropy over time.
ENDOWMENT FUNDS
Endowment Funds require a $5,000 initial deposit to open.
Endowment Funds are invested long-term in order to preserve the balance and ensure higher investment return.
The principal balance of Endowment Funds are held in perpetuity by the El Dorado Community Foundation to ensure that your philanthropic vision is always met.
Each year, an “available to spend” amount will be available for you to make grants to nonprofit organizations of your choosing. This “available to spend” is calculated as 4% of the rolling average of the balance over the previous twelve quarters.
At the end of each year, any remaining “available to spend” will roll into the next years spendable balance.
Endowment Funds will receive their first “available to spend” on January 1st between 15 and 27 months after being established, based upon the time of year they are established (before or after September 30th of any given year).
ACORN ENDOWMENTS
An Acorn Endowment Fund can be opened by a donor that isn’t able to make the minimum initial contribution of $5,000. Instead, the donor can grow their fund over time with regular contributions (monthly, bi-monthly, annual, etc.) to eventually reach the $5,000 threshold.
Once the Acorn Endowment Fund reaches maturity, the fund will be eligible to receive investment return and will begin the process of accruing its first “available to spend”.
An Acorn Endowment Fund can be any type of fund, giving you options whatever your philanthropic goals might be.
EXPENDABLE FUNDS
What will best suit your needs?
Expendable Funds are thought of as checking accounts, allowing for more immediate giving as needs arise. Often, Expendable Funds will be opened alongside Endowments to allow the donor to begin making grants right away, while also growing an Endowment Fund that will support their passion into perpetuity.
EXPENDABLE FUNDS
Expendable Funds require a $10,000 initial deposit to start.
In certain cases, passion projects can be opened as Expendable Funds for a lower minimum.
Deposited funds are immediately available to be granted out to nonprofits of your choice.
Expendable Funds allow donors flexibility in when and how much they are able to give at the cost of little to no growth from investment return.
Expendable Funds are commonly opened in conjunction with Endowment Funds of the same name, allowing donors to start giving right away while also growing their Endowment Fund to ensure their giving can continue long into the future.
Groups looking to open a fund type that has the ability to pay expenses will always open an Expendable Fund for that purpose due to their ability to start making disbursals from their fund right away.
Similarly, donors looking to fundraise to grow their fund will almost always open an Expendable Fund for that purpose so that they are able to make grants each year for the full amount they have raised.
WE ARE HERE FOR YOU
Whether you decide to open an Endowment Fund, Expendable Fund, or both, the team at the El Dorado Community Foundation is ready to answer your questions and help you realize your philanthropic goals. We know that you care about your community, and so do we. That is why we do what we do for the communities of El Dorado County, and we look forward to carrying that mission forward with you as our partner in philanthropy.
TYPES OF FUNDS
Donor Advised Funds
Donor Advised Funds are established by individuals and families who wish to actively participate in the philanthropic process. Those who establish a Donor Advised Fund make grant recommendations to nonprofit organizations that they want to support. It is easy to give to multiple nonprofits through a donor advised fund.
DONOR ADVISED FUNDS
Donor Advised Funds can be established as either Endowments or Expendable Funds, though often donors choose to open both, giving them the freedom to start granting right away as well as the benefits that come with an invested endowment.
Donor Advised Funds give you the flexibility to support a variety of different causes through a single online portal. You will be given your very own login allowing you to see the details of your fund in real time, make grant recommendations, and more.
With all of your giving in one place, you don’t have to worry about keeping track of your charitable contributions throughout the year. Simply log into your fund for a record of all contributions you have made in a given year.
Donor Advised Funds can only grant to nonprofit organizations or charitable concerns. They cannot pay invoices, and for that reason they are not ideal for operating programs. See Committee Funds and Field of Interest Funds for funds with this flexibility.
Donor Advised Funds can be opened using a number of different types of gift, including cash or marketable securities, required minimum distributions, and more. If you have questions about types of gifts that can be accepted, don’t hesitate to reach out to us.
Opening your own Donor Advised Fund allows you to give publicly or anonymously, with each separate grant you make. Any correspondence from the grantee comes directly to the El Dorado Community Foundation which we will forward to you.
Many donors choose to open Donor Advised Funds as a family, allowing them to introduce their children to the joys of giving back to their community. Donors can designate successor advisors for their fund to ensure their giving legacy will continue after they are gone.
As a Donor Advised Fund of the El Dorado Community Foundation, you will have the opportunity to participate in an annual competitive grant process if you so choose, that will allow you to restrict your funding and receive impact reports.
TYPES OF FUNDS Committee Funds
Committee Funds are often established by groups of donors for the purpose of annual grantmaking to charitable organizations, sometimes by membership vote, to support many different causes. It is very common for both an Endowment and Expendable to be established for Committee Funds. The Foundations acts as fiscal agent to these funds allowing them to utilize the Foundation’s nonprofit status to apply for federal, state, or other foundation funding.
COMMITTEE FUNDS
Unlike Donor Advised Funds, Committee Funds are allowed to pay invoices and receive reimbursements for expenses out of their fund. This can allow Committee Funds to pay for costs related to fundraisers, programs, and more.
Committee Funds are required to have a minimum of three advisors to approve any distribution from the fund. The additional advisors cannot be family members or employees of the primary advisor.
Committee Funds are ideal for collective giving groups like women’s funds and social giving circles where membership votes on annual grantmaking efforts. As membership size grows, so to does the amount the fund can grant each year.
Committee Funds are not required to keep their grantmaking to a specific area of need like Field of Interest Funds. Instead, Committee Funds can support multiple areas of need from year to year or even within the same year. This makes them ideal for groups that want to create a competitive grant process. The Foundation will help establish and manage this competitive grant process for you.
Committee Funds will often have cabinets or boards that govern their overall operations, but at a minimum they must maintain a small advisory committee. As a Committee Fund grows in size and impact, it is common for its governance elements to expand.
Committee Fund advisors can utilize the online portal to submit grant requests, however those requests still require the approval of at least two other advisors on their fund. The Foundation will reach out to request approval.
Committee Funds are a great way to inspire philanthropy within your network and educate the next generation of philanthropists in the joys of giving back to your community. The structure of Committee Funds is such that their charitable mission will carry forward with each new generation, giving them the ability to provide a positive impact long into the future.
TYPES OF FUNDS Field of Interest Funds
Field of Interest Funds are defined by their specific area of focus. These funds are often opened to support specific things like animal welfare, foster youth, older adult education, etc. Field of Interest Funds allow the payment of expenses in addition to direct grants, giving the flexibility to operate programs. The Foundations acts as fiscal agent to these funds allowing them to utilize the Foundation’s nonprofit status to apply for federal, state, or other foundation funding.
FIELD OF INTEREST FUNDS
Due to their ability to pay invoices incurred in the operation of programs supporting the specific area of focus, Field of Interest Funds typically have an Expendable Fund component. However, Endowments are always established alongside the Expendable in order to support the cause in the long-term.
Field of Interest Funds are required to have a minimum of three advisors to approve any distribution from the fund. The additional advisors cannot be family members or employees of the primary advisor.
Fund advisors for Field of Interest funds can still utilize the online portal to submit grant requests, however those requests still require the approval of at least two other advisors on their fund. The Foundation will reach out to request approval.
Field of Interest funds can be established to support all kinds of community based needs including those listed above. Think outside the box and support a cause that truly matters to you!
When defining the focus area of your Field of Interest Fund, we can work with you to help identify overlapping services, unfulfilled niches, and potential hurdles including how those hurdles might be overcome to ensure your philanthropic goals are met.
In the extremely rare event that the designated area of focus served by a Field of Interest Fund needs to be changed, the Foundation Board of Directors must approve the change through action at the next scheduled Board of Directors meeting.
Field of Interest Funds are often opened by donors looking to engage in fundraising efforts through annual events or campaigns, growing their fund’s capacity for providing impact to its area of focus. Frequently, this impact comes in the form of programs operated by the Field of Interest Fund.
TYPES OF FUNDS Scholarship Funds
Scholarship Funds are opened by donors who wish to help students pursue higher education at colleges, universities, and trade schools. They can be set up to honor the memory of a loved one, to promote a specific interest, passion or field, or just to contribute to furthering the education of our local students. Typically, scholarships from these funds are given out annually to local graduating seniors who are chosen as recipients through a structured application process.
SCHOLARSHIP FUNDS
Scholarship Funds are specifically set up to help students with their pursuits of higher education on a full-time basis. Scholarship Funds can be as specific or general as the donor prefers and advise from Foundation staff can help with that determination. All Scholarships must be spent on qualified educational expenses as defined by the IRS.
Every Scholarship Fund must have an advisory committee that will select the scholarship recipients out of all qualifying applicants. Some donors choose to involve themselves in this process while others prefer to name outside advisory committees to select recipients.
Scholarship Funds are intended specifically to benefit the educational goals of students and as such, cannot be used for other grantmaking. If you have philanthropic interests beyond providing scholarships, it is recommended that you open another type of fund as well.
Most Scholarship Funds are endowed funds but it is very common for scholarship donors to open an expendable fund as well to allow them to begin giving out scholarships right away. Endowed Scholarship Funds allow your scholarship to benefit students into perpetuity.
The El Dorado Community Foundation will manage your scholarship for you, including the development and distribution of your scholarship application, collection of applications, determination of qualification for each applicant, and access for your advisory committee to review applications for selection.
Some Scholarship Fund holders prefer not to be involved in the review and selection process for their scholarship. In this event, the Foundation Grants Committee reviews and selects the recipients each year from all eligible applicants.
Most Scholarships are opened for very personal reasons, such as to honor the memory of a loved one. As such, the parameters you set for your Scholarship Fund will always be honored, within reason, by the El Dorado Community Foundation.
TYPES OF FUNDS
Designated Agency Funds
Designated Agency Funds are endowed funds that are established to support a specific nonprofit organization into perpetuity by designating the annual spendable balance to go in support of that specific nonprofit.
DESIGNATED AGENCY FUNDS
Designated Agency Funds are always established as endowed funds. Being an endowment allows them to benefit the designated nonprofit organization into perpetuity. Each year, your “available to spend” will go to the designated organization to support their mission for as long as they exist as a nonprofit.
If the designated nonprofit ceases to exist, you will be consulted to designate a different nonprofit to receive your annual “available to spend”. If you are no longer able to suggest a new nonprofit, the Foundation Board of Directors will designate a similar nonprofit as the recipient.
Grants from Designated Agency Funds are intended to support the mission of the designated nonprofit. All grants will be used at the deaccession of the nonprofit’s Board of Directors.
Designated Agency Funds are a great way to support your favorite nonprofit into perpetuity, as your consistent funding stream will allow them to focus on their mission and do what is needed to best support the community with less worry about operating costs.
By opening a Designated Agency Fund, you are helping to ensure the longevity of a nonprofit that serves a part of the community you hold dear. Finding funding for operations is often one of the biggest challenges facing any nonprofit, and your Designated Agency Fund can become a reliable source of that critical funding each year.
Designated Agency Funds are one of the most convenient ways to support a cause you love, as once they are started, they will continue to disburse their annual “available to spend” to the designated nonprofit with no action required by you. The fund will grow over time, increasing the annual “available to spend”, and you can accelerate that growth through your own contributions as well.
THERE ARE MANY DIFFERENT WAYS TO GIVE AT
THE EL DORADO COMMUNITY FOUNDATION
Individuals, families, and organizations are not limited in the different types of gifts that can be given to the El Dorado Community Foundation. Different types of gifts can be given to establish a fund, grow an existing fund, or even to support the Foundation itself. What to give and how to give is in your hands!
WAYS TO GIVE
Cash: Gifts of cash are the most common type of gift used for opening or growing a fund. Cash is typically sent in the form of a check or using a wire transfer.
Marketable Securities: Stocks, bonds, preferred shares, and exchange-traded funds are among the most common examples of marketable security gifts that are given by donors.
Real Estate: Gifts of real estate are another common type of gift. In most cases real estate gifts are immediately sold by the Foundation. In rare cases, a piece of property gifted to the Foundation might be kept in an LLC for a designated purpose. All gifts of real estate require the approval of the Finance Committee of the Foundation prior to acceptance.
Charitable Remainder Trusts: A donor can create a trust and retain the right to annual payments based on a percentage of the trust’s initial value (an annuity trust) or value each year (a uni-trust) for a term of years or for life. At the end of the trust term, the Foundation receives the trust assets.
Charitable Lead Trusts: This is the reverse of a charitable remainder trust, with the Foundation receiving the payment stream for a set period, and the donor’s designated beneficiaries receiving the remaining assets at the end of the trust term.
Retirement Plans: A donor can gift a retirement account to the Foundation by transferring the account into the Foundation’s name or naming the Foundation as the beneficiary of a retirement plan.
Life Insurance: A donor can name the Foundation as the beneficiary of a life insurance policy or create an irrevocable life insurance trust that names the Foundation as the beneficiary.
Natural Resources: A donor can transfer natural resources such as mineral rights, leasehold rights, or working interests to the Foundation.
Tangible Personal Property: A donor can give personal property, such as artwork or a vehicle to the Foundation. In most cases, such gifts are immediately sold.
Interested in supporting the El Dorado Community Foundation directly? Learn more about becoming a Friend of the Foundation by visiting www.eldoradocf.org or scan the code below!
