What is a Community Foundation?
A Community Foundation is a nonprofit community corporation with the unique capability to serve as a vehicle for philanthropy and a powerful force for improving the quality of life in the local area. In the United States, Community Foundations serve tens of thousands of donors, administer more than $31 billion in charitable funds, and address the core concerns of nearly 750 communities and regions.
What is the Community Foundation of Washington County MD, Inc.?
The Community Foundation of Washington County MD, Inc., was created by and for the people of Washington County, Maryland. We work with individuals, families and businesses to create funds that help meet their charitable goals and give to the causes or nonprofit organizations they care about most.
Established in 1997, the Community Foundation has grown from one fund worth $9,000 to more than 350 funds valued at over $45 million. We have distributed $22 million in grants and scholarships since inception. By promoting philanthropy in every field of interest and capacity, we also manage special fundraising projects, such as endowment challenges, emergency relief campaigns and Washington County Gives.
What are the advantages of using the Foundation’s services?
The Community Foundation provides flexibility for donors to meet their charitable interests and needs, including:
- Expert investment management and safeguards
- Numerous ways to honor others and/or create family legacies
- Significant tax deductions, in most instances
- Many charitable vehicles and gift assets from which to choose
By using our services, not only can you give a gift that keeps on giving, but also enhance the quality of life in the greater Washington County area now and in the future.
What is a fund?
The Community Foundation consists of a collection of separate funds, each with its own donors and charitable purposes. In a sense, the funds act as individual foundations, except that administration, investment management, program support and trustee oversight are shared by all donors at the Community Foundation; thus, significantly reducing costs.
What is the difference between an endowed and non-endowed fund?
Endowed is a fund whereby the initial gift and subsequent gifts are never spent, and instead, the income and earnings of the fund support the charitable purpose defined by the fund’s founding donor.
Non-Endowed is a fund where all contributions, as well as income and earnings, may be used for charitable purposes.
What types of funds does the Community Foundation offer?
Agency Fund: Provides a mechanism for nonprofit organizations to establish a fund that supports their ongoing operations.
Community Endowment: Unrestricted funds that support the Community Foundation’s annual responsive granting program, responding to the community’s most pressing needs.
Designated Endowment: Specifies one or more organizations to receive annual or periodic distributions that donors select as grant beneficiaries.
Donor-Advised: Permits a donor to maintain an advisory role in the disbursement of the proceeds. Donor-Advised Funds can be endowed or non-endowed.
Field of Interest: Communicates a donor’s preference to provide support to initiatives within an area of special interest, such as the arts, education or a specific demographic.
Legacy Fund: Legacy Funds, deferred gifts to the Community Foundation, will commence with a gift from the founder’s estate.
Scholarship: Endowed funds established by donors to benefit local students based upon guidelines defined by the donor.
What assets can I use to contribute to a fund?
- Real Estate
- Life Insurance
Why not give directly to my favorite charity or nonprofit organization?
Most charities have experience serving the public, but not investment management and oversight. The Community Foundation can provide experience and competent management in the following areas:
Development Expertise: While some larger charities have a development staff, many smaller ones do not. The Community Foundation can offer assistance with sophisticated gift plans, such as charitable remainder trusts.
Support to Numerous Charities: Many donors wish to support several charities. The Community Foundation can set up a single endowment fund that supports several charities. Our flexibility ensures the fulfillment of your charitable wishes.
Lasting Impact: Most of us believe our favorite charities will continue to serve our community forever. Sadly, history has shown us that this is not always the case. The Community Foundation has the built-in flexibility to redirect funds to a similar purpose if the named beneficiary ceases to exist. This flexibility assures your legacy endures forever, and cannot be used to pay off the debts of an agency in financial trouble.
How do I establish a new fund?
You can establish an endowment fund with a minimum of $5,000, which can come from an individual, family, corporation, financial institution, probate court, bequest, private foundation or a nonprofit organization. Donors choose the distribution of the funds. Each fund becomes a permanent part of the Community Foundation.
- Define your charitable and financial objectives. Consider how you want your gift used, whether or not you want future family members involved, whether or not you want income from a trust during your lifetime and how much involvement you want in making grant choices.
- Select the type of fund that matches your charitable interests.
- Decide how much you want to contribute to the charity for this year or over the next several years. Or, determine how much you might set aside as a permanent fund to generate annual income for charitable giving. Of course, you can add to the fund at any time.
- Choose a name for your fund.
- Determine which asset you will use in creating your fund: cash, securities (publicly traded or closely held), real estate, or tangible personal property such as art, antiques or jewelry.
- Decide if a charitable trust would benefit you. Options include: (1) You can provide income for a determined number of years to you or someone you choose and (2) You can provide your favorite charities with gifts in perpetuity after the death of the last beneficiary.
- Consider including a directive in your will that allots a percentage of your estate to a specific existing fund, or a fund that you establish to meet your charitable interests in perpetuity.
May I set up an anonymous fund?
Yes, all gifts and grants can remain anonymous.
What organizations may I recommend for grants?
You may recommend qualified nonprofit public charities, schools and government programs at the local or national level.
Can I recommend a grant to an individual?
No. According to IRS regulations, the Community Foundation may make grants only to qualifying nonprofit public charities. The Community Foundation staff checks all organizations for documentation of nonprofit status.
I want to direct the fund to a specific type of organization, but I am not familiar with all of them in Washington County. Can the Community Foundation help me?
Yes. Our staff works with you to identify nonprofit organizations that meet your charitable goals. We will also research organizations you would like to know more about before recommending them as grant recipients.
How are the funds invested and who are the investment managers?
The Community Foundation’s Investment Committee, comprised of trustees with investment expertise, sets the overall investment policy, selects the managers and monitors their performance. Our main investment manager is Mason Investment Advisory Services. Donors establishing a fund of $100,000 or more may recommend an investment manager and strategy, subject to the approval of the board of trustees. Donor-designated managers include The Hershey-Fitzsimmons Group of RBC Wealth Management, The Family Heritage Trust Company and Marshfield Associates.
What fees does the Community Foundation charge?
We charge an annual management fee of 1% for all component funds. We assess 1.5% for scholarships and field of interest funds since they require greater administrative effort. These fees help pay our financial audit, salaries, rent and other expenses associated with running a nonprofit.
How can I find out more about the Community Foundation?
We welcome you to give us a call at (301) 745-5210, stop by and visit at 37 S. Potomac Street or complete our online contact form.