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How to Set Up a Charitable Fund at a Community Foundation

Many philanthropists turn to community foundations to set up a charitable fund to simplify the process. Community foundations provide staff assistance, community expertise and a variety of services that help donors set up funds and award grant dollars to nonprofit organizations.

If you’re considering establishing a charitable fund, where should you begin? Your local community foundation is always a great choice.

Our philanthropic experts have outlined simple steps to help get you started.

How to Start a Charitable Fund

Starting a charitable fund is easy if you follow these simple steps:

1. Choose your passion

What social impact area do you want to support? Are you interested in helping low-income students attain a college degree? Or, maybe you have a passion for helping underserved youth access the outdoors? Or, possibly you want to throw your support behind age-friendly communities to create a more inclusive environment for older adults? The first step in setting up a charitable fund is identifying who or what you want to support. Community foundations are great resources if you need information on community needs and opportunities.

2. Decide when to give

Do you want to establish a fund today so you can give during your lifetime and witness the impact? Or, would you prefer to defer your gift through a will or other planned gift? Our staff works with you, your family and your team of professional advisors to determine how you can best achieve your charitable goals and maximize your tax benefits.

3. Choose what to give

Almost any kind of asset may be used to start your charitable fund at a community foundation, including cash, publicly traded securities, closely held stock, interests in limited partnerships, real estate, life insurance, personal property and private foundation assets. If you open a donor-advised fund, tax deductions are earned at the time of your gift, and you can award grants any time in the future.

4. Pick a type of charitable fund

Community foundations offer several types of charitable funds to help you fulfill your goals, including unrestricted, field of interest, designated, donor-advised, corporate-advised, scholarship and legacy. Each provides their own set of benefits, flexibility and timeline based on your charitable giving needs.

5. Decide to make your fund endowed or non-endowed

An endowment is a permanent fund. Endowment funds are pooled for maximum benefit and invested to achieve long-term capital growth. Contributions are irrevocable and become assets of your community foundation. Non-endowment funds have no permanent principal balance and are immediately available for grant distribution.

6. Name your charitable fund

Charitable funds can be named after your family, to memorialize someone special, to recognize your passions, or on behalf of a business or an organization. Whatever the reason, your fund will carry the name you choose. If you prefer anonymity through a community foundation, you can choose a name that reflects your charitable purpose(s).

Community foundations like The San Diego Foundation will walk you through the necessary paperwork to finish setting up your charitable fund and explain investment portfolios and important policies. Expert advisors can work with you to create a tailored solution that meets your specific interests.

Contact us or your local community foundation today to start the process.

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