Frequently Asked Questions
What is a community foundation?
A community foundation is a tax-exempt, nonprofit, autonomous, publicly supported philanthropic institution. It is composed primarily of permanent funds established by many separate donors for the long-term charitable benefit of their community. It serves the residents of a defined geographic area. There are more than 600 community foundations in the country.
Who runs Jefferson County’s Community Foundation?
A local volunteer board of directors governs the Community Foundation. They serve three-year terms with a maximum of two terms. A Nominating Committee made up of board members and other Jefferson County residents recommends their names to the Board for final approval.
What is an "endowment?"
It is a fund set up by an individual or organization through a written agreement between the donor and the Foundation. Gifts to the fund are invested. Investment income is used to make grants and scholarships. The original value of the fund is not spent. All of the Foundation’s more than 100 endowment funds are pooled for investment purposes but each individual fund is accounted for separately.
For what kinds of things can an endowment be used?
As long as the purpose of the endowment is to support something charitable, anything is possible. The Foundation is a very flexible tool for people to use.
What does it cost to set up an endowment?
There are no start-up fees. An annual administration contribution of 1% (1 1/2% for scholarships) from the fund is used to help with administrative expenses, including reporting annually to founding donors about their funds’ financial activity.
How do I set one up?
It’s very simple and there are many ways to give – just call or stop by the office and talk with Louise Markel, President/CEO. She will assist you making decisions about how grants from your fund will be used. Then a Fund Agreement is drawn up for you and the Foundation to sign. The Agreement will forever guide the Foundation in carrying out your wishes.
I’d like to do that but I’m not wealthy.
Most of the Foundation’s donors are people of modest means. The minimum amount needed to set up a fund is just $5,000 ($20,000 for scholarships). Or you may want to add to an existing fund that helps a charity you care about, such as the Humane Society or Girls Inc. Anyone can add to any of the endowments at any time, in any amount.
Can I make gifts anonymously?
Of course. The Foundation has a Confidentiality Policy that board members and staff adhere to. The Foundation respects your wishes for privacy.
How are my gifts invested?
First the Foundation seeks to prudently maximize returns by investing in a balanced portfolio of stocks and bonds and diversifying over a number of asset categories. Second the Foundation preserves the "purchasing power" of the funds over time by reinvesting a portion of the investment returns back into the fund. That way the endowments keep pace with inflation.
How can I be sure my gifts are prudently managed?
Since inception, the Foundation has had a seven-member Finance and Investment Committee made up of local volunteers with investment expertise. They advise the board on investment policy and management. The investments are spread over a variety of stocks and bonds. And a few years ago the Board hired an investment consultant firm to help the Board and finance committee provide more technical fiscal oversight of the endowment, monitor the fund managers and change them when needed.
How are the endowment grants determined?
The Foundation has adopted, along with hundreds of endowment managers in the country, a Total Return Policy. The policy has two goals: to maintain and increase the real value of the endowment and to smooth out the short-term roller coaster ride that inevitably results from investing in the marketplace.
Depending on the current climate, the Foundation generally awards about 4% of a fund’s average market value over the preceding 16 quarters. (New funds must be invested a full calendar year before they can make grants.)
Do you have any other questions?
The Foundation’s board of directors and staff would be glad to answer them. Call the Foundation’s office (812) 265-3327 or e-mail it at jeffcom@cfmjc.org to learn more.
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