KCCF Has 501 Funds, Each With A Different Purpose
February 5, 2021 at 11:16 p.m.
KCCF Has 501 Funds, Each With A Different Purpose
By David [email protected]
“A charitable fund at the Community Foundation is a fund that a donor sets up to meet whatever charitable goal the donor has,” said Community Foundation CEO Stephanie Overbey. “We call them component funds, so they’re all separately accounted for funds here at the Community Foundation, but all have a different purpose – whatever the donor wanted at the time they set it up.”
The Foundation has existed since 1968. Its total net assets as of June 30, 2010, were $38.9 million. By June 30, 2020, its net assets grew to $58.9 million, and as of Dec. 31, 2020, net assets were $73 million.
There are two main types of funds at the Foundation, Overbey said.
The Foundation specializes in endowment funds, which are “where the original gift is invested and earns money from those investments, and a certain percentage of the fund’s balance every single year is available to award grants forever,” she said. “So the idea of an endowment is that it’s permanent, it is going to be giving a 100 years from now because you invest and you use a percentage of the balance to award grants.”
The second type of main fund is a nonpermanent fund.
“A nonpermanent fund could be here today and gone tomorrow. So the donor may say, ‘I have this gift I want to make and I don’t know when grants are going to be coming out of it, but it could go away if it needs to. We could spend it all if needed.’ The idea is for it not to be permanent,” Overbey said.
Of the Community Foundation’s 501 funds, 81% are permanent endowments and 19% are nonpermanent funds.
Underneath either of the two main categories of funds, there are seven subcategories.
In an agency or designated fund, the nonprofit that benefits from the fund is named in the fund agreement. Grants from the fund always go to the same organization(s). “It’s never going to benefit anything else, it’s always going to go there” because that’s the donor’s favorite organization(s), Overbey said. The agency or designated funds are the funds the Foundation has the most of, she said.
The field of interest fund is where “the nonprofit that receives the grants can change, but the basic area of interest never changes,” she said. An example of that is the Fostering Hope Fund, which always benefits foster children.
A community/unrestricted fund is where the donor leaves it up to the KCCF Board of Directors on how the dollars should be spent to best meet the needs of the community.
“So imagine all of the response we’re doing to COVID right now. We’re fortunate to have dollars to respond, but we didn’t have a fund specifically for COVID when that all happened, but we had unrestricted funds. And so because of that, we were able to respond to a need that donors to that fund 10, 20, 30 years ago could have never anticipated, but because we have those dollars, we can meet needs,” Overbey said.
The Foundation uses the community/unrestricted funds to respond to applications from nonprofits, which is the biggest use of those funds. “So we have certain deadlines every year where nonprofits can tell us how they need help, and we respond that way,” she said.
Most people are familiar with the scholarship funds where donors want to help students obtain a higher education.
A donor advised fund is where the donor reserves the right to later recommend a grant from the fund. “As long as that is charitable in nature, it’s to a legitimate 501(c)(3) for a charitable purpose, and there’s no reason not to award it, we would honor their recommendation,” Overbey explained.
An operating fund is when a donor makes a gift to benefit the Community Foundation’s operations. “We are the ultimate beneficiary of that gift,” she said.
Finally, a charitable trust is “where the donor transfers an asset that they own to our ownership, but they or their beneficiaries can still benefit or earn income from the gift during their lifetime. Those happen through attorneys. It’s usually part of donor’s wealth management,” Overbey said.
Every one of the 501 funds is governed by a fund agreement. That agreement will spell out how grants from the fund are distributed.
“Sometimes it’s as simple as, ‘every year on such and such a date, the ABC organization is going to get this designated funds grant,’” Overbey said. “In the case of our community and unrestricted funds, those are recommended by the grant committee and get final approval by the Board.”
All grants, no matter what fund they are, get approved by the Board of Directors. “But the committee work comes into play typically with our community and unrestricted funds,” she said, as well as the scholarship funds.
There are 19 people on the Community Foundation Board of Directors. All of the committees are odd-numbered in case of a tie. All committees and Board members serve as volunteers and are not paid.
To start an endowment fund, a person needs at least $5,000, unless it’s a scholarship fund and then $25,000 is required. “There are two reasons for that. But the reason that matters most for the donor is that a $25,000 fund is typically going to generate about $1,000 a year in grant-making if it’s endowed. And we want the scholarship to be meaningful and make a difference for the student who receives it,” Overbey said.
Grants from the Foundation can go all over the world.
“A large number of our donors, they want their grants to benefit Kosciusko County, and our community and unrestricted dollars do benefit Kosciusko County. But, if a donor, as long as they have some headquarters here in the U.S. ... could have grants that go all over the world,” Overbey said. As an example, Water For Good has an endowment at the Foundation and their work is primarily done in Africa. “So they’re a U.S.-based charity that serves Africa. So, yeah, our grant-making could go all over the world. Again, it depends on what the donor wants to accomplish.”
The Community Foundation does accept gifts of $1, $5, $10 or more to already established funds. “The KC Riley Kids Fund is a great example of a fund that receives gifts all the way from $1 to several thousand-dollar gifts because it resonates with people of all giving abilities and it’s a fund that’s already set up. So any fund can receive additional gifts to it, even if you’re not the original donor,” Overbey said.
If a donor wants to start a fund, she says they can contact the Foundation and say they want to make a difference. The person then meets with either the development director or Overbey and they talk about what they want to accomplish.
“Then based on what they tell us, we can recommend a fund type for them. And then if they want to move forward, our legal counsel will draft a fund agreement for their review, and if they want to, they can show that fund agreement to their accountant, their attorney, their spouse or whoever,” Overbey said. “Once they’re comfortable with it, they sign it and then it goes to our Board to accept the fund.”
Once the fund is accepted, “they make a gift or multiple gifts or ongoing gifts, however they plan to use that fund,” she said.
The whole process can be completed in less than a month. From July 1, 2020, to Dec. 31, 2020, the Foundation had 13 new funds established. “So two a month, on average,” Overbey said.
Suzie Light was the CEO before Overbey and served as Overbey’s mentor.
“She repeated, so often, during the 20 years that she was my boss, and the 20 years that she was the chief staff person at Board meetings and stuff, that ‘the trust that people have in the Community Foundation is our most important asset.’ Once you lose that, it’s either gone or really hard to get back. So I feel so fortunate that in all of its history, the Community Foundation has been led by volunteers and professional staff, people of integrity. So we do not take the trust that donors put into us lightly. We hold it in the highest regard,” Overbey stated.
People have many options for their giving today, from online to local to commercial investment firms. Overbey said there’s a reason why donors choose the Kosciusko County Community Foundation.
“One of the reasons is that we do specialize in endowment. And there’s something really special about knowing that when I leave this gift, if I leave it in an endowment, that it’s going to be making an impact long after I’m gone. A hundred years from now, it’s still going to be doing something good. And there’s something, I think, that just resonates with people about that,” she said.
The Community Foundation is sophisticated enough to accept many, many types of gifts.
“Some charities are very, very good at meeting their mission, whatever it is, to help certain people or animals or whatever their mission is. But they may not be sophisticated enough to be able to accept a gift of stock, or a gift of real estate, or the transfer of a private foundation to a fund here, or to accept gifts of crop or livestock. (The Community Foundation) can accept gifts like that. And so sometimes a donor will use the Community Foundation because they know we are going to receipt it properly for tax purposes, that we’re going to know how to manage that gift, and it’ll still ultimately benefit the charity or the purpose that they want it to. So that’s another reason they give,” Overbey said.
Donors may choose the Community Foundation to involve their children, grandchildren or company in giving. They also may choose to give through the Foundation because of KCCF’s expertise on community needs, Overbey said.
“Lastly, I think donors can enjoy giving, and have the fulfillment of giving, and not worry about the administrative tasks,” she said.
Most of all, people love to give.
“We live in the best community,” Overbey said. “I have lived in a lot of places. I have lived here for the longest. I have never lived anyplace that is as generous and concerned about neighbors as this community is. ... It is not a perfect community, but it is a darn good one. So many, generous, kind people here.”
“A charitable fund at the Community Foundation is a fund that a donor sets up to meet whatever charitable goal the donor has,” said Community Foundation CEO Stephanie Overbey. “We call them component funds, so they’re all separately accounted for funds here at the Community Foundation, but all have a different purpose – whatever the donor wanted at the time they set it up.”
The Foundation has existed since 1968. Its total net assets as of June 30, 2010, were $38.9 million. By June 30, 2020, its net assets grew to $58.9 million, and as of Dec. 31, 2020, net assets were $73 million.
There are two main types of funds at the Foundation, Overbey said.
The Foundation specializes in endowment funds, which are “where the original gift is invested and earns money from those investments, and a certain percentage of the fund’s balance every single year is available to award grants forever,” she said. “So the idea of an endowment is that it’s permanent, it is going to be giving a 100 years from now because you invest and you use a percentage of the balance to award grants.”
The second type of main fund is a nonpermanent fund.
“A nonpermanent fund could be here today and gone tomorrow. So the donor may say, ‘I have this gift I want to make and I don’t know when grants are going to be coming out of it, but it could go away if it needs to. We could spend it all if needed.’ The idea is for it not to be permanent,” Overbey said.
Of the Community Foundation’s 501 funds, 81% are permanent endowments and 19% are nonpermanent funds.
Underneath either of the two main categories of funds, there are seven subcategories.
In an agency or designated fund, the nonprofit that benefits from the fund is named in the fund agreement. Grants from the fund always go to the same organization(s). “It’s never going to benefit anything else, it’s always going to go there” because that’s the donor’s favorite organization(s), Overbey said. The agency or designated funds are the funds the Foundation has the most of, she said.
The field of interest fund is where “the nonprofit that receives the grants can change, but the basic area of interest never changes,” she said. An example of that is the Fostering Hope Fund, which always benefits foster children.
A community/unrestricted fund is where the donor leaves it up to the KCCF Board of Directors on how the dollars should be spent to best meet the needs of the community.
“So imagine all of the response we’re doing to COVID right now. We’re fortunate to have dollars to respond, but we didn’t have a fund specifically for COVID when that all happened, but we had unrestricted funds. And so because of that, we were able to respond to a need that donors to that fund 10, 20, 30 years ago could have never anticipated, but because we have those dollars, we can meet needs,” Overbey said.
The Foundation uses the community/unrestricted funds to respond to applications from nonprofits, which is the biggest use of those funds. “So we have certain deadlines every year where nonprofits can tell us how they need help, and we respond that way,” she said.
Most people are familiar with the scholarship funds where donors want to help students obtain a higher education.
A donor advised fund is where the donor reserves the right to later recommend a grant from the fund. “As long as that is charitable in nature, it’s to a legitimate 501(c)(3) for a charitable purpose, and there’s no reason not to award it, we would honor their recommendation,” Overbey explained.
An operating fund is when a donor makes a gift to benefit the Community Foundation’s operations. “We are the ultimate beneficiary of that gift,” she said.
Finally, a charitable trust is “where the donor transfers an asset that they own to our ownership, but they or their beneficiaries can still benefit or earn income from the gift during their lifetime. Those happen through attorneys. It’s usually part of donor’s wealth management,” Overbey said.
Every one of the 501 funds is governed by a fund agreement. That agreement will spell out how grants from the fund are distributed.
“Sometimes it’s as simple as, ‘every year on such and such a date, the ABC organization is going to get this designated funds grant,’” Overbey said. “In the case of our community and unrestricted funds, those are recommended by the grant committee and get final approval by the Board.”
All grants, no matter what fund they are, get approved by the Board of Directors. “But the committee work comes into play typically with our community and unrestricted funds,” she said, as well as the scholarship funds.
There are 19 people on the Community Foundation Board of Directors. All of the committees are odd-numbered in case of a tie. All committees and Board members serve as volunteers and are not paid.
To start an endowment fund, a person needs at least $5,000, unless it’s a scholarship fund and then $25,000 is required. “There are two reasons for that. But the reason that matters most for the donor is that a $25,000 fund is typically going to generate about $1,000 a year in grant-making if it’s endowed. And we want the scholarship to be meaningful and make a difference for the student who receives it,” Overbey said.
Grants from the Foundation can go all over the world.
“A large number of our donors, they want their grants to benefit Kosciusko County, and our community and unrestricted dollars do benefit Kosciusko County. But, if a donor, as long as they have some headquarters here in the U.S. ... could have grants that go all over the world,” Overbey said. As an example, Water For Good has an endowment at the Foundation and their work is primarily done in Africa. “So they’re a U.S.-based charity that serves Africa. So, yeah, our grant-making could go all over the world. Again, it depends on what the donor wants to accomplish.”
The Community Foundation does accept gifts of $1, $5, $10 or more to already established funds. “The KC Riley Kids Fund is a great example of a fund that receives gifts all the way from $1 to several thousand-dollar gifts because it resonates with people of all giving abilities and it’s a fund that’s already set up. So any fund can receive additional gifts to it, even if you’re not the original donor,” Overbey said.
If a donor wants to start a fund, she says they can contact the Foundation and say they want to make a difference. The person then meets with either the development director or Overbey and they talk about what they want to accomplish.
“Then based on what they tell us, we can recommend a fund type for them. And then if they want to move forward, our legal counsel will draft a fund agreement for their review, and if they want to, they can show that fund agreement to their accountant, their attorney, their spouse or whoever,” Overbey said. “Once they’re comfortable with it, they sign it and then it goes to our Board to accept the fund.”
Once the fund is accepted, “they make a gift or multiple gifts or ongoing gifts, however they plan to use that fund,” she said.
The whole process can be completed in less than a month. From July 1, 2020, to Dec. 31, 2020, the Foundation had 13 new funds established. “So two a month, on average,” Overbey said.
Suzie Light was the CEO before Overbey and served as Overbey’s mentor.
“She repeated, so often, during the 20 years that she was my boss, and the 20 years that she was the chief staff person at Board meetings and stuff, that ‘the trust that people have in the Community Foundation is our most important asset.’ Once you lose that, it’s either gone or really hard to get back. So I feel so fortunate that in all of its history, the Community Foundation has been led by volunteers and professional staff, people of integrity. So we do not take the trust that donors put into us lightly. We hold it in the highest regard,” Overbey stated.
People have many options for their giving today, from online to local to commercial investment firms. Overbey said there’s a reason why donors choose the Kosciusko County Community Foundation.
“One of the reasons is that we do specialize in endowment. And there’s something really special about knowing that when I leave this gift, if I leave it in an endowment, that it’s going to be making an impact long after I’m gone. A hundred years from now, it’s still going to be doing something good. And there’s something, I think, that just resonates with people about that,” she said.
The Community Foundation is sophisticated enough to accept many, many types of gifts.
“Some charities are very, very good at meeting their mission, whatever it is, to help certain people or animals or whatever their mission is. But they may not be sophisticated enough to be able to accept a gift of stock, or a gift of real estate, or the transfer of a private foundation to a fund here, or to accept gifts of crop or livestock. (The Community Foundation) can accept gifts like that. And so sometimes a donor will use the Community Foundation because they know we are going to receipt it properly for tax purposes, that we’re going to know how to manage that gift, and it’ll still ultimately benefit the charity or the purpose that they want it to. So that’s another reason they give,” Overbey said.
Donors may choose the Community Foundation to involve their children, grandchildren or company in giving. They also may choose to give through the Foundation because of KCCF’s expertise on community needs, Overbey said.
“Lastly, I think donors can enjoy giving, and have the fulfillment of giving, and not worry about the administrative tasks,” she said.
Most of all, people love to give.
“We live in the best community,” Overbey said. “I have lived in a lot of places. I have lived here for the longest. I have never lived anyplace that is as generous and concerned about neighbors as this community is. ... It is not a perfect community, but it is a darn good one. So many, generous, kind people here.”
Have a news tip? Email [email protected] or Call/Text 360-922-3092