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What is a community foundation?

 

No two community foundations are alike, and yet they share common characteristics. Community foundations are a collection of individual funds invested together to benefit a broad range of community needs. They are shaped by local traditions, history and culture and are designed to meet the needs in a defined geographical area. Community foundations do not champion one cause over another, but rather work on behalf of the entire community.  Their ability to meet the need(s) in their communities is limited only by available resources and the richness of their donors’ imagination.

 

What are the benefits of a community foundation?

 

Sometimes donors dream big and yet are confused as to the proper mechanism or process that will allow them to achieve their philanthropic goals. The primary benefit of a community foundation is the expertise, flexibility and ease it provides a donor to meet his/her goals.  A donor can select, 1) when to give, 2) what asset is most appropriate to give, and 3) who or what their money will benefit.  There is very little paperwork and no need to set up a separate board of directors or go through the lengthy and expensive process of setting up a private foundation.

 

What types of funds does a community foundation manage?

 

  • Donor Advised Fund:  A donor sets up the fund with a minimum gift and retains the right to actively participate in awarding grants.
  • Field-Of-Interest Fund: The fund is established to make grants to broad areas, such as disadvantaged children, the elderly, or the performing arts.
  • Designated Fund: The donor may name a specific charitable organization(s) to be assisted by distributions from the fund.
  • Unrestricted or General Fund: The donor may choose to leave their gift unrestricted, allowing the community foundation to make grants to meet emerging needs of the community.

 

Why should someone invest with the Renton Community Foundation?

 

When a donor contributes to the Renton Community Foundation they can watch their dollars grow, not just in dollars and cents, but in helping to grow a stronger community.  Our donors invest with a purpose. They are our partners and together we strive to achieve high-impact philanthropy. As such, RCF remains current on the issues facing our community and serves as a hub of philanthropic information where ideas are shared, needs are identified, and common agendas for the future are developed.

 

What is RCF’s Investment Strategy?

 

The goal at the Renton Community Foundation is to invest an ever-increasing pool of assets in a way that will maximize return while moderating risk. An investment committee made up of Foundation board members, business owners and community leaders guides the Foundation’s investment strategies, making recommendations to the board on policy, strategy and management. For more information, visit our Financials page.

 

 

What are the investment fees?

 

RCF keeps expenses low by spreading costs over its growing collection of funds, careful management and the use of volunteers. Small funds particularly benefit from pooling with our size and diversified portfolio. Each RCF fund pays a proportionate share of the investment management fee.  Administrative fees are in addition to this and are based on the size and type of fund.  Currently administrative fees run between 1-3%, depending on the size of the fund and how much activity (number of contributions, grants, special projects) the fund generates. For more information, see our Fee Schedule or visit our Financials page.

 

How is the Foundation’s Operating Account used?

 

The Operating Fund supports all operations of the Foundation, as well as all grant and scholarship programs. Largely a volunteer organization, currently RCF retains an Executive Director and two part-time staff.

 

Having professional staff allows RCF to maintain an active presence in the community, increase efficiencies, provide prompt response to inquiries, provide individualized attention to donors, maintain a consistent approach to policies and procedures, activate education and promotion plans, build a network of partnerships, help provide a consistent message to the community and liaison with other community foundations in the area.

 

What is the process to set up a fund?

 

Most donors don’t want to be burdened with complicated, legal proceedings to do something good for their community. The process of setting up a fund with a community foundation is simple. Donors can contact the Foundation by calling (425) 282-5199 or by emailing the Executive Director at lbohart@rentonfoundation.org to get a sample fund agreement and/or schedule a meeting. For more information, visit our How To Give page.

 

What types of gifts can RCF accept?

 

RCF can accept most types of gifts, including cash, securities, life insurance policies, real estate and personal property (subject to Gift Acceptance policies of the Foundation). The Foundation also can accept remainder trusts, lead trusts, life estates and bequests.

 

What portion of the gift is used for charitable purposes?

 

In general, community foundations are very cost-effective, but determining what portion of a gift goes directly to charitable purposes depends on the gift itself. For instance:

  • Gifts made to an RCF fund are used exclusively for that purpose, minus any management fee or special handling fees.
  • Circle of Giving funds are spent according to recommendations by a ‘donor committee’. Therefore, a small portion is given to the Foundation for facilitating the program, while the rest is awarded directly to non-profit organizations and agencies in the area.
  • All or part of any gift made directly to RCF’s Operating Fund is used to support operations and expand philanthropy in our area.

 

Why does it make sense to invest with RCF?

 

For donors, the Renton Community Foundation:

  • Provides a broad range of giving opportunities to meet donor interests.
  • Provides tremendous flexibility in setting up a fund.
  • Eliminates the set-up costs of a private foundation, IRS paperwork, or the need to establish a business license.
  • Eliminates administrative overhead and the need to establish a separate board of directors.
  • Provides access to community leaders and local professionals who have a deep understanding of local issues, nonprofit organizations and available resources in the community.
  • Provides the framework to award scholarships and effective grants.

 

For local non-profit agencies, the Renton Community Foundation:

  • Provides a lucrative investment tool without the headache of oversight management.
  • Provides broad exposure to potential new donors through our website, publications, seminars and community events.
  • Connects the affiliate to community leaders throughout the greater Renton area, helping to educate them on relevant causes and interests.
  • Offers expertise on fundraising, planned giving and non-profit management.
  • Provides access to a greater pool of donors through our annual "Under One Roof" community campaign.

 

How does RCF differ from the United Way or other charitable organizations?

 

RCF is not in competition with other local not-for-profit organizations. Instead, we work to support and enhance our local partners. How do we do this?  While most non-profit organizations have a very specific mission, community foundations have broad missions and are thus free to make grants to address any charitable purpose.

 

Additionally, most non-profits conduct annual fundraising programs to support their operations. Although community foundations must also fund operations, they typically do so through management fees, interest income, operational endowments, small special events and individual donors.

 

What are the tax benefits of investing with RCF?

 

RCF is a tax exempt, 501(C) 3 organization. All contributions to RCF are tax deductible to the extent permitted by law.  In addition, RCF can accept specialized forms of giving such as gifts of stock, bonds, mutual funds and real estate. RCF can also work with donors to set up planned gifts, which allow the donor to achieve a tax deduction and a stream of income.

 

If you have additional questions, please contact us.

 

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425.282.5199

lbohart@rentonfoundation.org

TaxID  23-7069988

P.O. Box 820

Renton, WA 98057

 

(425) 282-5199

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