What is a fund?
At the Amarillo Area Foundation, funds are used to help donors fulfill their philanthropic interests. A fund is like having an account at AAF. You put money in and then give us general directions on what charitable causes you want to support. Often donors choose to give in the areas that they are most passionate about and we ensure that organizations they wish to give to are sound. This provides the donor with a sense of security, while still making the impact with ease.
How to open a fund.
Opening a fund is done by initially sitting down with AAF’s development staff and talking about your philanthropic plans. Their goal is to make sure to match your intention to the type of fund you’ll need, but more on that later. Each fund requires a minimum $10,000 charitable contribution to get the fund started. You may request distributions from your fund to qualified nonprofit organizations. Distributions may not be used to satisfy a pledge or to receive a personal benefit (e.g., purchasing a table at a charitable event which you plan to attend).
Next, let’s take a look at the types of funds and their function.
Types of Fund:
An Endowed Agency Fund at Amarillo Area Foundation is a step towards sustainability. The initial money to open the fund must come directly from the nonprofit agency (a 501(c)3 organization); donors may contribute to the fund after it’s established to help you build your endowment with their charitable gifts. When establishing your endowed agency fund, you may choose to receive quarterly distributions of the interest while leaving the corpus intact. IRS tax laws also allow you to report your agency fund as an asset.
Community Funds at Amarillo Area Foundation are endowed Field of Interest Funds. As an endowed fund, distributions are allowed from the interest earned on the fund while the principal remains intact. As a community fund of the AAF, Community Fund holders may receive services including financial management, strategic development, and training. This partnership provides advantages such as safekeeping and management of the endowment fund.
Amarillo Area Foundation has established a Corporate Fund option to assist you in planning your corporate strategic community investment. The process of selecting and qualifying organizations that meet your company’s mission may be time-consuming and challenging. The Foundation can assist in that process by assuming the responsibility of accepting, qualifying, and recommending nonprofits and award amounts from your corporate fund. We can also serve you by receiving and qualifying requests and passing those along to your corporate leadership for the final decision concerning distributions from your fund.
A non-endowed Corporate Fund may be established with a charitable contribution of $10,000 and may be added to at any time. We would be pleased to visit with you about the options available to you concerning contributions, distributions, and your active role in managing your fund.
With a Donor Advised Fund at Amarillo Area Foundation, you have an on-going involvement in the use of your charitable contributions. You will identify ways to use your fund to address issues and needs you care about most. Our friendly staff will be here to help you along the way. Once your recommendations are submitted and approved by our local Board of Directors, funds will be distributed as grant dollars according to your wishes. Donor Advised Funds are the largest types of funds AAF holds.
A Donor Designated Fund at Amarillo Area Foundation, typically an endowed fund, is held for specific nonprofit philanthropic purpose and is an excellent sustainability investment. The corpus is preserved by reinvesting quarterly earnings, or the beneficiary may use the earnings by taking quarterly distributions. Funds that are not endowed allow the use of the fund principal in addition to income. The decision to reinvest or use quarterly earnings is established when the fund is created.
A Field of Interest Fund at Amarillo Area Foundation offers flexibility that other funds may not, such as using the funds to pay for expenses during a capital campaign, construction project, or events. A Field of Interest Fund may also be designated for support of certain types of programs without being specific to any agencies or organizations.
Scholarship Funds at Amarillo Area Foundation provide the opportunity for you to offer students in our area a post-secondary education. The application, selection, and award process is managed by the Foundation’s professional staff and the volunteer Scholarship Selection Committee. The criteria for the scholarship may be written to your specifications. A scholarship fund must be fully funded for 12 months before the first scholarship may be awarded.
A Scholarship Fund may be endowed for a minimum charitable contribution of $25,000.00 . As an endowed fund, scholarships may be awarded on the interest earned from the fund while the principal remains intact.
For more information about setting up a fund, please contact our development staff: Melanie Smoot or by calling 806.376.4521. You can also check out more on the topic of funds on our webpage, CLICK HERE