Choosing the Right Fund
Bainbridge Community Foundation (BCF) manages funds in two primary categories: Donor Advised Funds, in which you, the investor, determine fund dispersal; and funds in which the foundation advises how funds are applied. Per a donor’s wishes at the time of establishment, grants may be distributed in a manner that protects the original principal or spent down over time.
Donor Advised Funds
Our Donor Advised Funds (a type of Charitable Giving Fund, explained here) offer charitably-minded investors an easy, low-cost, and tax-favored way to manage giving — and even to maximize it. Donor Advised Funds have three elements:
- The donor makes one or a series of irrevocable gifts to BCF to establish the fund.
- The donor retains the ability to advise the foundation on how the fund’s income (or principal and income) should be distributed.
- The original donor can pass on the advisory role to two generations of successor advisors.
Donors receive quarterly statements about the fund’s investment performance and current value. This is a good option for donors wishing to actively engage in their philanthropy. The minimum amount required to establish a Donor Advised Fund is $10,000. Fees include an annual administrative fee of 1.25% plus a variable investment fee, which currently averages 50 basis points.
Donor Designated Funds
Donor Designated Funds are similar to Donor Advised Funds. They differ in that disbursements from the fund are established at the time of the fund’s creation and do not require ongoing action on the part of the original donor:
- The donor makes one or a series of irrevocable gifts to BCF to establish the fund.
- The donor identifies one or more public charities to be the beneficiary of distributions of the fund’s income (or principal and income) and the desired terms of those disbursements.
- Per the terms of the agreement, regular disbursements are made from the fund and in the event that one of the original beneficiary charities ceases to exist, the foundation will redirect that support to a public charity with a similar mission.
Donor Designated Funds are a good option for donors wishing to establish long-term support of the organization(s) or causes they care about, or to establish a legacy giving vehicle that will exist in perpetuity. The minimum amount required to establish a Donor Designated Fund is $10,000. Fees include an annual administrative fee of 1.05% plus a variable investment fee, which currently averages 50 basis points.
Other Fund Types
Named Community Funds: Funds permanently given to BCF that carry the name of the original donor(s) but may be used by the foundation toward the area of greatest need. This is a good option for donors who wish to create a philanthropic legacy that will grow and change with the community and the foundation. The minimum amount required to establish a Named Community Fund is $50,000.
Scholarship Funds: Funds permanently given to BCF where the donor may establish the broad criteria for scholarship recipient selection, and a BCF scholarship selection committee selects the recipients based on applications submitted. A Scholarship Fund is a good option for donors who want to support educational opportunities for local students. The minimum amount required to establish a Scholarship Fund is $10,000. Fees include an annual administrative fee of 1.25% plus a variable investment fee, which averages 50 basis points.
Area of Interest Funds: Funds permanently given to BCF in support of a particular area of interest, which are used by the foundation to ensure long-term or special support to that area. This is a good option for donors who care about specific issues and wish for the foundation to address those issues via the most effective means possible.
Nonprofit Agency Funds: Funds permanently given to BCF by a nonprofit agency where the agency specifies the distribution of the funds (usually per the agency’s endowment policy) and BCF manages and administers the funds for long-term growth. The minimum amount required to establish an Agency Fund is $10,000. Fees include an annual administrative fee of 1.05% plus a variable investment fee, which averages 50 basis points.
- If you would like to learn more about establishing a fund at BCF, please contact us.
- A copy of the foundation’s Gift Acceptance Policy is available upon request.
- As with any financial planning decision, we encourage you to consult your tax advisor regarding the deductibility of any charitable gift.
Open a Fund
Still not sure? Work through this this chart to help you make a decision!
Ready to get started with your own fund? Here's how! Looking for more guidance? Contact us.
