Which of the following statements apply to you?
If one or more of the above apply to you, you need to know about
DONOR DIRECTED FUNDS
administered by the BEDFORD COMMUNITY HEALTH FOUNDATION
The Bedford Community Health Foundation administers two types of Donor Directed Funds:
DONOR ADVISED FUNDS and DONOR DESIGNATED FUNDS.
Donor Advised Funds
1. What is a Donor Advised Fund? A Donor Advised Fund is a named charitable fund, which is administered by the Foundation. One or more individuals, usually the donor(s), are named as the Fund advisor(s), and actively participate in making grants to non-profit organizations.
2. Why choose a Donor Advised Fund? The Bedford Community Health Foundation is dedicated to making Bedford a healthier place in which to live. It administers various funds which enable citizens, families and businesses to participate actively in this process. By creating a Donor Advised Fund you can give back to your community, while influencing the direction of your giving in an informed and active way.
3. Is there a minimum amount for establishing a Donor Advised Fund? Yes. The Foundation will establish a Donor Advised Fund for any amount in excess of $10,000. Additions to the Fund, in cash or stocks, may be made at any time.
4. Why not form my own private foundation to channel my charitable giving? There is substantial cost and paper-work associated with establishing and administering a private foundation. The BCHF carries out all the work associated with creating your Donor Advised Fund.
5. Does the Foundation charge me for operating my Donor Advised Fund? There is no fee for establishing the fund. The BCHF charges an annual fee of 2% of the fund balance for administering the fund.
6. Are there limits on how much money the Fund disburses each year? No. However, the Foundation normally likes to distribute a minimum of 5% of each fund’s value each year.
7. Do I have total control over the distribution of the Fund’s assets? No. You legally relinquish control of the money when you establish a Donor Advised Fund. However, it would be extremely rare for the Foundation to operate against the advice of the donor.
8. Are there tax incentives to establish a Donor Advised Fund? Donations of cash or its equivalent can be deducted up to 50% of your adjusted gross income. Significant tax benefits may be realized through gifts of appreciated stock or real estate.
9. Are there any restrictions? You may not recommend grants to fulfill personal pledges or to pay for memberships, dues or anything that provides a direct benefit to the donor/advisor. Individual grant recommendations of $500 or more are preferred.
10. How will I know how much I have available to recommend for grants? Twice a year you will receive an advisor packet. Each packet will contain details of the activity of your fund, including the amount that is available for you to recommend as grants.
11. What types of organization may I recommend for a grant? You may recommend qualified non-profit public charities, schools and government programs.
12. May I recommend grants to organizations outside Bedford City or Bedford County? All recipients of grants must provide health-related services to Bedford residents.
13. May I remain anonymous to a grant recipient? Anonymity can be accommodated on a grant-by-grant basis. The thank-you letter could be sent to the Foundation, and we would forward it on to you.
14. May I recommend a grant to an individual? No. IRS regulations stipulate that the Foundation may make grants only to qualifying non-profit public charities.
15. How often should I recommend grants from my Donor Advised Fund? We encourage you to recommend grants from your fund on a regular basis – preferably annually or twice a year.
16. May I recommend a multi-year grant from my fund? Yes. At the time of your recommendation please indicate that the grant is to be made in installments. We will administer the grant and payment schedule.
17. May I recommend a grant to an organization of which I am a board member? Yes, as long as you receive no personal benefit from the grant.
18. What do I do now? Please call the Bedford Community Health Foundation at (540) 586-5292 and ask to speak to Donna Proctor or Michael Cross.
Donor Designated Funds
Donor Designated Funds are similar, in most ways, to Donor Advised Funds. There is, however, one significant difference. When setting up a Donor Designated Fund, the donor makes it clear that the proceeds of the fund are to be distributed to one specific charitable organization of the donor's own choosing. The Trustees of the Foundation, when making grants from the fund, will honor the wishes of the donor, according to the following criteria:
1. The Trustees will review regularly the activities of the designated charity to be sure that the original intentions of the donor continue to be met.
2. Grants will be made from the fund as long as the charity remains in operation and its activities are consistent with its original charitable purpose.
3. If, over time, a charity benefiting from a Donor Designated Fund goes out of business, becomes for-profit, or substantially alters its mission so that it no longer fits with the donor's original intent, a future Board of Trustees will seek out alternate beneficiaries to ensure the donor's original charitable goals continue to be met.