Establish a Nonprofit Fund
Nonprofit organization endowment funds established at the Community Foundation are referred to as Agency funds. Below are the most common questions and answers about
Agency endowments at the Community Foundation.
What is an Agency endowment fund?
A CFNF agency endowment is a fund which is kept in perpetuity to provide invested earnings for the benefit of the nonprofit organization for which the fund was established. An endowment fund grows through gifts from donors, contributions from the organization itself, and investment income.
Who should create an endowment?
Organizations with strong leadership and management, financial stability, a committed and diverse pool of donors, board and staff committed to the effort, and the capacity to engage in this long-term fundraising strategy are the best candidates for endowment development.
How do you set up an endowment fund?
A nonporfit organization can establish an Agency endowment fund with the Community Foundation by completing a fund agreement and providing an initial gift of $10,000 or more.
Why should an organization establish an endowment fund?
An endowment provides an additional source of annual revenue to an organization for assisting with operations, programs or unanticipated needs, if necessary.
What is the minimum amount to start an endowment fund?
Who can establish an Agency endowment with the Foundation?
An Agency endowment can be established by any qualified charitable nonprofit, tax-exempt 501(c)(3) organization or by a private donor of the organization.
What are the fees for an Agency endowment at the Community Foundation?
The annual administrative fee for an Agency endowment is based on the fund balance as follows:
$3-6 million = 1.0%
$6-9 million = 0.8%
$9-12 million = 0.6%
Above $12 million = 0.4%
Each fund pays a pro-rata share of the investment costs (approximately 67 basis points, less than 1%) annually. Generally, non-endowed funds do not earn interest and are not charged an investment fee.
NOTE: All investment returns are reported net of investment costs.
What type of gifts can donors give to an endowment fund?
The Community Foundation can accept a variety of gifts from your donors to your organization's endowment fund. Learn more about Charitable Gift Types
What happens when someone makes a gift to an Agency endowment fund?
When a gift is received by CFNF for the benefit of an Agency endowment, the Director of Donor Relations will contact the Executive Director/President at the nonprofit organization via email. The email will provide the donor's name and contact information as well as the gift amount and purpose.
How does an Agency receive information about their endowment?
The Community Foundation uses DonorCentral, an online portal which allows fundholders to login and view accounty activity, annual spending balance amounts and download quarterly fund statements. Once a fund is established, online access is given to the Executive Diretor/President and Finance Director/Bookkeeper of the Agency.
How does an Agency receive distributions from an endowment fund?
Annual spend balances are calculated at the end of the calendar year and are based on a board approved spending policy, currently 4%. To request available funds, the Agency must complete and submit an distribution request form to CFNF. Upon receipt of the request and after CFNF board approval, the request will be processed in the next grant cycle.
How is the endowment invested?
The Community Foundation partners with Commonfund, founded in 1971 as an independent asset management firm focused on not-for-profit institutions and now manages over $25 billion in assets, including 431 foundations. Commonfund is one of North America’s leading investment firms for education endowments, foundations and philanthropic organizations. Their only business is investment management, and they are active in all sectors of the global capital markets, both public and private, serving a broad spectrum of investors, including nonprofit organizations, healthcare organizations, family offices and pension plans.