Below are some frequently asked questions about establishing a fund at the Idaho Community Foundation.
Can I set up a fund and remain anonymous?
Yes. While many donors choose to include their personal names when naming their fund, others choose names that do not reveal their identity (ex: Fund for Idaho Arts). We take confidentiality very seriously and do not provide information about our donors or financial data about our funds to anyone not pre-authorized to receive such information.
How long does it take to set up a fund?
An ICF fund can be established in less than a day if a donor knows their charitable goals and the assets they want to use to create it. ICF staff is available to assist donors in drafting and executing a fund agreement that outlines their instructions.
Can additional donations be made to a fund once it’s created?
Once a fund is created, anyone can make new donations at any time throughout the year. Donations of all sizes are accepted and are eligible for a tax-deduction.
How are grants made from endowment funds?
Every spring, endowment fund holders will be notified of how much is available to be spent from their fund. Depending on the type of fund, distributions may be automatically made by ICF or granted throughout the year. The current distribution rate is 4.5%, meaning 4.5% of the fund’s average balance over the previous two to 12 quarters is available for grant making
What type of organizations can receive grants from an ICF fund?
Distributions from an ICF fund can be made to an Internal Revenue Code Section 501(c)(3) public charity qualified under Sections 509(a)(1), 509(a)(2) , in some cases 509(a)(3), or an educational or governmental entity.
When can fund holders recommend grants?
Grant recommendations can be made at any time throughout the year once a fund holder knows how much is available to spend from the fund in that given year. Grant recommendations are submitted in writing (using a form, letter, email or fax) to the community impact department. Staff verifies the recommended beneficiary is eligible and processes the grant to the organization, with a copy to the fund advisor. Grants are usually distributed within two weeks of their submission.
What services does ICF offer to fund holders?
ICF makes it easy for donors to set up funds and engage in philanthropy. ICF offers fund holders the following services, all covered by the annual management fee: IRS reporting and annual audit, accounting and investment, quarterly and annual financial statements, grants and scholarship management, customized reporting (if requested), research on nonprofits (if requested), and information on funding opportunities (if requested).
What happens to my fund once I pass away?
It depends on the type of fund you’ve established. For endowed funds such as designated, field of interest, greatest need, and operating funds, ICF will continue to follow the instructions listed in the fund agreement in perpetuity.
For endowed donor advised funds, you may name successor advisors to make grant recommendations and continue your family’s legacy of giving. Typically, after two generations of advisors the fund will revert to another type of endowed fund based on the instructions you provided in the fund agreement at the time the fund was established.
How is setting up an ICF fund different than setting up a commercial gift fund?
Donors have a number of options for their philanthropy today, including commercial gift funds, which are donor advised vehicles offered by financial firms. These firms may be convenient for the transactional donor, but they don’t have local staff in the donor’s community and can’t offer information about local needs. There is little in the way of personal service. Community foundations are nonprofit organizations, and because we are geographically based, we know about local needs and the organizations that can best fill them.
Do endowment funds have to distribute?
No. Unlike private foundations which have payout requirements determined by the IRS regardless of investment performance, funds within a community foundation are not required to distribute every year. The ICF board annually adopts a payout rate, but there are no penalties or tax consequences for donors who choose not to distribute.