Community foundations can better meet the needs of local students while attracting more donors. Explore one community foundation’s experience in redesigning its scholarship program, as well as insightful findings from a recent report by National College Access Network. The Council's legal counsel will also address legal considerations involved with program changes.
Community foundations generally maintain a variety of fund types from donor advised funds to agency endowment funds to designated and field-of-interest funds. Community foundations and other charitable organizations may also have relationships with supporting organizations. Learn more about the particular characteristics, management and legal requirements of these giving options and find information to help determine the best structure for your donors.
In-Depth knowledge on Funds Management
This memorandum considers whether adoption of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) requires changes to existing guidance regarding the reporting and classification of assets held by community foundations. Current guidance is incorporated in a 1997 memorandum, Report on Classification of Net Assets by Community Foundations, prepared jointly by the Legal Advisory Subcommittee of the Committee on Community Foundations and a committee of the Community Foundations Fiscal and Administrative Officers Group (FAOG).
The widespread adoption of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) across the country has already been of great help to charities, in part because the financial markets collapsed just months after the uniform act was approved. Most, if not all, endowment funds created in the past six years are “underwater”—a phrase used to indicate that the fair market value of the investments in a particular endowment fund is less than the value of the gift that originally created that fund. Many older funds may also be underwater or approaching that condition. Under laws that had been in effect in many states, the amount a charity could spend from an underwater fund was limited, and, had UPMIFA not been adopted, charities that depended on their endowments to fund a significant portion of their operations would have been severely hampered in their ability to provide services.
Helpful tips and resources for managing your investments. Members only content.
“If I create a fund at the community foundation, can my investment manager still manage the funds?” You may have already come across a donor that asked this question. Such a donor is essentially requesting that the fund they create be invested outside of the foundation’s investment pool(s). While there are cases where the answer must be “no” (e.g., donor wants the investment firm she owns to manage the assets), there are also cases where the answer should be “no.” A strong policy will guide the community foundation in those cases where the answer may be “yes.”