Frequently Asked Questions (Professional Advisors)

Why should I encourage my clients to establish a fund at the Community Foundation?
Developing a charitable plan that takes into account your client's financial and charitable needs is no small task. As a professional advisor, the opportunity to help your clients achieve their philanthropic goals is both a privilege and a challenge.  The Community Foundation wants to be a resource for you, as well as a philanthropic partner for your clients.  A full understanding of charitable giving options, which can offer specific tax benefits, can help your clients achieve their financial, personal or business goals. The Community Foundation of Northern Colorado has an outstanding reputation for integrity and service to donors, and has developed unique resources for you to use in helping donors craft their charitable giving plans. 

Why not establish a private foundation?
There are many practical reasons why establishing a charitable fund at the Community Foundation might be better than creating a private foundation. The Foundation staff is pleased to provide additional information regarding the benefits of establishing a fund vs. a private foundation.

• A gift of cash to a charitable fund allows a significantly greater deduction than a gift of cash to a private foundation. 
• A fund can be established in less than an hour.
• There are no set-up fees.
• A donor may deduct gifts of closely held long-term appreciated stock at its fair market value, up to 30% of AGI. 
• No tax is imposed on the investment income of a charitable fund because it is a component of a public charity. A private foundation pays up to 2% federal excise tax on its investment income and net realized capital gain. 
• A community foundation donor may remain anonymous.  This is not possible with a private foundation.
• There are no minimum distribution requirements for a charitable fund at a community foundation. 
• There are fewer investment restrictions on a community foundation's funds.
• The Foundation’s staff handles IRS reporting requirements on grants and funds.
• Charitable gifts to a community foundation fund are almost always considered "public support," which helps the recipient charity retain its public charity status.

What type of Community Foundation fund can my client establish?
The Community Foundation offers several types of funds to help your client accomplish their charitable goals.  Staff members are available to discuss these options with you and help your client select one or more funds that best suit their philanthropic needs. 

• Donor Advised Funds
• Agency Funds
• Designated Agency Funds
• Donor Designated Funds
• Field of Interest Funds
• Scholarship Funds
• Charitable Remainder Trusts
• Charitable Gift Annuity Funds
• Unrestricted Funds

How do I help my client establish a fund?
It is easy to establish a fund at the Community Foundation.  Your client can simply decide which type of fund best meets their interests and needs, determine their charitable priorities, select a name for the fund, and make an establishing gift.  The Community Foundation can typically prepare and complete the written Fund Agreement in less than 1 hour.

How much money does my client need to establish a fund?
All funds must be established with a minimum $10,000 gift. There is no maximum limit, and no set-up fee.  

Does the Community Foundation charge my client a fee to maintain the fund?
Each fund at the Foundation shares in the total administrative costs of the Foundation.  The Foundation charges a very low annual administrative fee ranging from 1% to 2%, depending on the type of fund established. The Foundation staff can answer any questions you may have regarding our fee structure. 

Can my client advise how the fund will be invested?
Yes!  The Community Foundation offers three investment pools, and donors may advise that the fund be invested in a way that best aligns with their needs and interests. 

• The Conservative Pool: Provides for preservation of principal and stable generation of income. This pool is appropriate for donors with low tolerance for volatility.
• The Balanced Pool: Provides long-term growth of capital and generation of income by investing in a diversified mix of domestic and foreign equities and fixed income securities. This pool is appropriate for donors who seek moderate growth paired with stability.
• The Growth Pool: Provides long-term growth of capital with the production of income being secondary.  This pool is appropriate for donors seeking capital appreciation who have a higher tolerance for volatility.  

The Foundation staff is happy to review the investment options with you, and assist your client as requested. 

What kind of assets may my client use to open a fund?
Funds may be established with cash, securities traded on major exchanges, closely held stock, mutual fund shares, real estate, bequests, interests in limited partnerships, and more!  The Community Foundation staff is experienced at evaluating unusual assets and can accommodate them when suitable for charitable purposes. 

My client needs to set up a fund quickly.  How long does it take?
Charitable giving should warm a donor’s heart, not burden him with tax complications and ongoing administrative details. Once your client has decided on the type of fund he would like to establish, the Foundation staff can set it up with a simple governing document that requires less than an hour to prepare and complete. 

May my client select the name of the fund?
Absolutely. Your client may use his own name, names of individuals to be honored or memorialized, or the name of his business. Some donors select a more general name to retain anonymity. 

Will you come to my office to meet with my client or to make a presentation about the Community Foundation for my colleagues?
A member of our staff would be happy to meet with you.  Please call the Community Foundation at (970) 224-3462 to schedule a time that works best for you and your client. 

Can you provide me with language for a will or for an inter vivos gift?
When preparing a will or an inter vivos gift, please refer to the fund as follows: "The Community Foundation of Northern Colorado [insert fund name]." The staff at the Foundation would be happy to customize the language for specific funds.