The Walker Area Community Foundation welcomes the opportunity to partner with individuals and families who wish to be actively involved in grantmaking. The IRS allows all community foundations to offer donors the option to make tax-deductible gifts from which to recommend grants over a prolonged period of time. One must keep in mind, however, that once a gift is made the control of the gift is relinquished to the Walker Area Community Foundation Board of Directors. Donor Advised Funds are invited to give advice on nonprofits and amounts to distribute from their funds for the board’s consideration.
Establishing a Fund: There are three steps required to establish an Advised Fund at the Walker Area Community Foundation: (i) the donor and the Community Foundation must sign an agreement; (ii) the Community Foundation’s board or executive committee must approve the creation of the fund; and (iii) assets must be transferred to the fund. Funds administered by investment advisors outside of those used by the Walker Area Community Foundation, may remain with the investment advisor only if the gift exceeds $1 million. The minimum required to establish an Advised Fund is $50,000, which can be made with a gift of cash, stock or other asset over a three year period. If $50,000 is not reached after three years, the Board of Directors may at that time roll the fund into its general unrestricted fund.
The Walker Area Community Foundation reserves the right to refuse any donation offered that is considered unacceptable.
Key Features: The Advised Fund is named by the donor; it can be established immediately, which generates a charitable tax deduction for the donor whenever contributions are made to the fund. Also, all future growth and income accumulate tax-free. The Donor Advised Fund eliminates the administrative burden of grant making and reporting for the donor.
Investments: Advised Funds are component funds of the Walker Area Community Foundation. As such, the Community Foundation’s Board of Directors determines how the funds are invested. The Community Foundation invests assets with due regard for prudent risks, long-term market conditions, conservation of principal, grantmaking objectives, and planned giving objectives.
Under the Community Foundation’s utilized accounting system, each Advised Fund owns a percentage share of every Community Foundation investment. This allows Advised Funds to take advantage of lower money management fees and insures investment diversity. Thus, Advised Funds grow at a rate equal to the rest of the Community Foundation’s endowment. Additional information about the Foundation’s asset allocations and investment performance is available upon request.
Grants: As stated in the opening paragraph, once a gift is made to create a Donor Advised Fund, the control of the gift is relinquished to the Walker Area Community Foundation Board of Directors. Grants given through the Walker Area Community Foundation are primarily in and for the benefit of the community of Walker County, Alabama including the City of Jasper metropolitan area, and adjoining communities in the vicinity thereof that have historically been serviced by Walker Regional Medical Center, Inc. and such surrounding areas as the Board of Directors may from time to time designate.
Donor advisors may make written non-binding recommendations regarding the amount and the recipient(s) of Advised Fund grants. The Community Foundation provides a form in assisting donors with qualified charities in the area. Grants from the fund are generally made annually; however, this occurrence can be increased depending on the fund’s asset size.
If necessary, the Community Foundation researches prospective grantees beyond the identified list. Overall, the Community Foundation will serve as a resource to donors in analyzing and deciding on grant recommendations. Under applicable tax rules, the Walker Area Community Foundation Board of Directors must approve all grants. Upon approval, a grant contract and the check are sent to the recipient(s). The Community Foundation requires follow-up reports on how funds were used by grant recipients. Generally, grants are made to charitable organizations in Walker County; however, it is possible to make grants beyond the area, but restricted to the United States.
The minimum amount for a grant from an Advised Fund is $1,000. It is suggested that any grant requests less than $1,000 be made from personal giving instead of from the donor-advised fund. All grants are to be used for charitable purposes and must be distributed to qualified nonprofit organizations with no goods, services or benefits received by the donor in exchange. In addition, the IRS does not allow grants from Advised Funds to be used to pay for memberships, pledges, and tickets to events or anything of that nature.
Non-Grant Activity: All Advised funds are intended to be active grantmaking funds. In the event no advisor is able or willing to act, the Board of Directors will assume responsibility for grantmaking.
If there has been no communication within a 12-month period from a fund’s advisor, he or she will be notified by letter and then every six months thereafter for two years. If, at the end of the second year, no response has been received, the advised fund will be converted to a named Unrestricted Fund.
Donor Education: It is the goal of the Community Foundation to provide educational resources that will keep donors informed of the region’s charitable needs and opportunities. This is accomplished primarily through one-to-one communications with donors. The staff makes every effort to tailor this information to the donor’s initiatives of areas of interest.
Additional Contributions: Contributions to the Advised Fund can be made at any time and in any amount, but will only be added to the fund’s corpus quarterly. The annual statement will reflect all contributions and income added to the fund.
Reports: Donors will be provided with an annual financial report showing the market value of the Advised Fund, grants made during that year, any administrative charges and the asset balance. The Community Foundation provides for all accounting, auditing, and tax returns regarding the fund.
Publicity and Acknowledgments: Advised Funds can be either public or anonymous, depending on the donor’s desires. Some donors want complete anonymity. Others allow public recognition of the Advised Fund and the programs and projects it supports.
Fees: The Foundation charges Advised Funds a fee for the administrative services it provides (the current rate is 1.5%, but subject to change) as well as the fund’s share of the cost of operating the foundation which is determined annually.
Termination: The Community Foundation recommends that the duration of the fund be no longer than the lifetime of the donor and spouse plus one succeeding generation. When the fund terminates, for any reason, any remaining funds will then be transferred to a named Unrestricted Fund of the Walker Area Community Foundation. As a result, your contributions will continue to benefit the community well into the future.
For further information about Advised Funds, please contact the Walker Area Community Foundation at (205) 302-0001.