 Contact Gift Planning Officer Edgar Aguirre today at (213) 413-4130 to learn more about this topic. |
|
In addition to grants and program-related investments, the California Community Foundation offers a variety of endowment building strategies and other philanthropic services to Los Angeles County's nonprofit community.
Endowment Building Services for Nonprofit Organizations
Endowment building is critically important to the future stability of your nonprofit’s work. Creating a fund at the foundation can be the first step in achieving your goal.
A nonprofit organization fund may either be:
(1) a restricted endowment fund that pays out a portion (5 percent) of the value of the fund annually to your agency.
(2) a “quasi-endowment” (unrestricted fund) that allows for distribution of income and principal at the recommendation of your board or staff. You can arrange to receive the income from your fund or capitalize the income and appreciation from year to year.
Nonprofits also benefit from lower investment and administrative costs resulting from our economies of scale. Our administrative fee for a nonprofit agency endowment fund is .5 percent each year. When combined with our investment costs of approximately .50 percent, our overall costs for administering a nonprofit fund are about 1percent.
For a nonprofit looking to build upon its success, teaming up with the foundation can bring a much-needed boost.
Endowment-Building Strategies
When your organization creates an endowmentfund at the foundation, all of our gift planning resources are available to you. Complex gifts, such as real estate and closely held business interests, can be facilitated through your endowment at the foundation. The foundation can act as trustee for charitable remainder and lead trusts.
Lastly, nonprofit organizations that are licensed to offer charitable gift annuities in California can offer them through the foundation’s charitable gift annuity service. The remainders of charitable gift annuities are placed in a designated endowment fund benefiting your nonprofit organization in perpetuity.
Endowment Partners Program
Every other year, the foundation selects five agencies in Los Angeles County to participate as an Endowment Partner to begin a planned giving program. Each partner receives a $10,000 grant that can be used for specific action items, such as seminars, mailing pieces and consulting services. By forging a formal partnership with the foundation, an organization can structure and maintain a planned giving program, essential to building an endowment.
Participants in the Endowment Partners Program establish at the foundation an agency endowment fund, to which contributions may be made over time. The agency will receive a set percentage of assets of the fund as an annual grant for as long as the agency maintains its 501(c)(3) status.
Follow-up Grants
To help nurture our partners' endowment efforts, we also have a competitive grant process for follow-up Endowment Partners grants in years when new partners are not chosen. To qualify for the program, an agency must possess specific qualities that can lead to a successful planned giving program, including: fiscal stability, a committed and involved executive director and board and a good relationships with donors and volunteers.
Endowment Partners
Asian Pacific American Legal Center of Southern California
Assistance League of Southern California
Big Brother Big Sisters of Greater L.A. and the Inland Empire
Boys & Girls Clubs of Los Angeles Harbor
Center for Healthy Aging
Child & Family Guidance Center
Chrysalis
Constitutional Rights Foundation
Coro Southern California, Inc.
Dubnoff Center for Child Development
Fulfillment Fund
Gay & Lesbian Alliance Against Defamation (GLAAD)
Gay Men's Chorus of Los Angeles
Greater Los Angeles Zoo Association
Hollygrove Children & Family Services
House of Ruth
Inner-City Arts
Japanese American National Museum
Little Tokyo Service Center
Long Beach Day Nursery
Long Beach Museum of Art Foundation
Los Angeles Family Housing Corp.
Los Angeles Library Foundation
National Council of Jewish Women/Los Angeles
Ocean Park Community Center
Pasadena Senior Center
Pasadena Senior Center Endowment Fund
Public Counsel
The Richstone Family Center
Southern California Public Radio
St. Joseph Center
The Geffen Playhouse
The Wellness Community-Foothills
The Wellness Community-South Bay Cities
The Wellness Community-Valley/Ventura
The Wellness Community-West Los Angeles
Tree People
Venice Family Clinic
If you have further questions, contact Gift Planning Officer Edgar Aguirre at (213) 413-4130.
Charitable Gift Annuity Services for Nonprofit Organizations
Many nonprofit organizations in Southern California prefer not to start gift annuity programs because of the cost and burden of securing a license to offer annuities in California. As one of its many philanthropic services, the California Community Foundation can partner with agencies wishing to offer gift annuities as a tool to build their endowments.
How the Program Works
First, a donor enters into a gift annuity contract with the foundation. We take on all fiduciary obligations with respect to the payment of the annuity to the donor. Second, through our trustee bank, we make payments to each donor for life. Upon the death of the donor, the remainder of the annuity may be treated in one of two ways:
- Endowment. The foundation directs 5 percent of the remainder of each annuity to an additional reserve for annuities in effect. The remainder is placed in a restricted endowment fund at the foundation designated for the agency. This fund produces a perpetual income stream to the agency (currently 5.5 percent of the fund annually).
- One-time Grant. The foundation retains 25 percent of the remainder for its administrative expenses and general purposes, with the rest distributed outright to the designated charity.
Administrative Costs
Related administrative costs from gift annuities established by nonprofit organizations:
- Service fee charged by CCF trustee bank
- Five percent annual CCF fee
The minimum gift annuity size is $10,000.
Typical Situations
The Charitable Gift Annuity service is ideal for nonprofits that:
- Are not licensed to manage gift annuities and have donors interested in creating such funds;
- Have small constituencies that may produce too few annuities to justify investing in a license;
- Have a governing board or finance department not currently equipped to manage fiduciary responsibilities resulting from gift annuities.
This service helps nonprofits market and offer services to donors interested in life income programs, thereby also increasing donor interest in bequest programs and other planned giving options.
If you have further questions, contact Gift Planning Officer Edgar Aguirre at (213) 413-4130.
Charitable Remainder Trust Policy (CRT) for Nonprofit Organizations
The fFoundation can act as trustee of charitable remainder trusts. This philanthropic service for nonprofit agencies is useful when handling complex assets, such as real estate or business interests. It may also be helpful when a donor wishes to benefit one or more charities through the trust or when a donor wishes to create a permanent endowment fund through the trust.
As part of this service, the foundation prepares charitable remainder trust gift proposals and deduction calculations. Foundation staff also prepares trust documents for review by the donor and the donor’s advisors.
The foundation’s annual administrative fee for charitable remainder trusts is currently 0.5 percent.
As trustee for the CRT, the foundation manages investment policies and monitors trust investments. A third party manager, a bank trust company, administers each trust and prepares trust tax returns. There are additional costs charged by the foundation’s third party trust manager. The minimum size trust we administer is $100,000.
Upon the death of the income beneficiary, the remainder of each charitable remainder trust may be used in one of two ways:
- The remainder of the CRT may be placed in a restricted endowment fund at the foundation, the income from which (5.5 percent) would be payable annually to one or more specific charities named to benefit from that fund; or, in the alternative,
- Up to 50 percent of the remainder can be disbursed directly to one or more specific charities, with 50 percent staying at the foundation in a restricted endowment fund for the named charities.
For more information about the foundation's nonprofit endowment building services, contact Gift Planning Officer Edgar Aguirre at (213) 413-4130.
|
