Types of Funds

Giving to an existing fund at a community foundation is always an option, but if you are looking to establish your own fund, listed below are the most common types of funds at community foundations.

This information is intended to give you an overview, but you should consider scheduling a time to visit with your local community foundation to learn about the fund options available to you locally.

Great giving options for individuals, families, and businesses:

Establishing a Designated Fund allows you to support the good work of a specific nonprofit organization.

A Source of Strength and Stability

While Meals for Seniors had benefited from volunteerism and community recognition for years, it depended largely on small donations and lacked a more predictable funding source. They also didn’t have the staff or infrastructure to handle large or complex gifts. One of the program’s most dedicated volunteers, who delivered meals three times a week to homebound senior citizens, visited with Meals for Seniors’ executive director and his financial advisor, and then decided to begin a Designated Fund with his local community foundation. He donated a piece of rental property that was becoming a bother in his retirement. The community foundation immediately sold the property and established the Meals for Seniors Fund. Thanks to this fund, other donors can contribute assets of a variety of types and sizes to ensure Meals for Seniors can continue serving the community long into the future.

Donor-Advised Funds are convenient, flexible tools for individuals, families, businesses, or groups that want to be personally involved in recommending grant awards made possible by their gifts. Companies looking for an easier, more effective way to give back to the community can establish a Donor-Advised Fund and a team of employees can meet regularly to review local needs and recommend grants. Donor-Advised Funds are typically less costly and easier to administer than other forms of philanthropic giving such as family or corporate foundations. The donor or other named advisors can recommend grants to 501(c)(3) nonprofits. Grants are made in the fund’s name (or anonymously, if you prefer). The donor (if established by individuals) also has the right to name successor advisors to the fund who can recommend grants in the fund’s name after the death of the original donors. It’s a simple, powerful and highly personal approach to giving.

By establishing a Field of Interest Fund, you can direct your gift to address needs in an important area of community life. Arts. Health. Education. You identify your personal interest area when making your gift; your community foundation awards grants to community organizations and programs that are making a difference in the area you select. Your gift stays flexible enough to meet community needs in your interest area – even as they change over time.

A Personal Mission Unforgotten

When one family lost their adult daughter to cancer, they received hundreds of contributions from people throughout the community. Their daughter had been a high school teacher, so many of the contributions came from fellow teachers and from parents of the students whose lives she had touched. “[Our daughter] cared so deeply about her work,” says her mother, “and we wanted to use the money to continue in that spirit of helping children through their education. “The family spoke with their local community foundation and decided to establish an education fund in their daughter’s name, a Field of Interest Fund that memorializes their daughter by supporting local educators and students. This type of fund will allow it to help and grow with the dynamic field of education, said her family. “We realize that we aren’t always aware of what our school system needs and how it works, and we wanted to be sure that, even years from now, grants made in her name make sense for our community.”

In creating a Scholarship Fund, you invest in your community’s future and show students you care. Your community foundation provides the expertise to help you meet your personal goals and awards Scholarships to deserving students.

Valuing Education

A couple of years into a comfortable retirement, two married, retired teachers realized how much they missed making a difference in the lives of students. “For both of us, education was not only a profession – it was a calling,” says John. Looking for a way to stay involved, they started a scholarship fund with their community foundation. They wanted scholarships made in their name to benefit students interested in becoming teachers. “The community foundation helped us create our legacy. It’s a wonderful feeling to let students know we still care,” says John. “The community foundation does all the administrative work involved in determining the most deserving students,” says Rose. In just the first three years, their education fund provided six scholarships to the next generation of teachers.

When you establish an Unrestricted Fund, your gift can address a broad range of local needs – including future needs that often cannot be anticipated at the time your gift is made. Your local community foundation evaluates all aspects of community well-being. The flexibility of your unrestricted gift enables your community foundation’s program experts to respond to the community’s most pressing needs, today and tomorrow.

If you are a community leader, does your community – whether city/town, county, or region – have an established fund for your community’s future? You can start by reviewing our map of local community foundations and checking the website of the foundation(s) in your area. By establishing an Affiliate Community Foundation Fund, your community can develop a vehicle to receive donations and bequests to benefit your community – forever.

If you are the leader of a nonprofit: Do you have an endowed fund with your local community foundation for your organization’s long-term sustainability?

Nonprofits can establish a Designated Fund or agency endowment at the community foundation. It’s a simple and efficient way to build an endowment, increase your ability to accept complex gifts like real estate or agricultural commodities, and help create sustainability for your organization. The community foundation’s experienced staff can also help your organization develop planned giving programs and assist with investment management and administrative details.

Setting Up for Success

Dress to Work helps low-income individuals transition out of underemployment by providing career training, mentoring, and professional attire. Like many nonprofits, it struggles to cover operating expenses. Over the years, several of its volunteers have offered to contribute gifts of appreciated stock or real estate, but Dress to Work did not have the ability or expertise to accept those types of gifts. Frustrated by having to turn away willing donors, the organization turned to their local community foundation. As a result of establishing the Dress to Work Designated Fund at its local community foundation, the organization has added the ability to accept large and complex gifts. Plus, it was able to develop a planned giving program and a permanent endowment, providing a regular stream of support and leaving the management and reporting to the community foundation.

Any of the fund types listed above can be established as non-endowed or endowed funds. By establishing an endowed fund at an Iowa community foundation today, you are planting a seed that will grow over time, providing necessary resources for future generations. See how your gift – and your impact – could grow in an endowed fund.

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