Types of Funds
The Truman Heartland Community Foundation is a collection of many separate funds. A fund is usually named for its purpose, for its donor, or as a tribute or memorial to another individual. Many funds are held as perpetual endowments with the principal invested and only the income distributed for charitable activities. Others funds are not endowed and may distribute income and/or principal on recommendation of the donor.
Four types of funds exist. Unrestricted and Field of Interest funds are those for which the donor delegates the power of selecting charitable grantees to the Foundation Board. Donor-Advised and Designated Funds are those for which the donor retains varying degrees of direction as to the charitable distribution of funds.
Unrestricted Funds
Unrestricted Funds are used to respond to requests from broad charitable sectors of the community — arts and culture, community affairs and development, education, environment, health, historic preservation, human services. These funds provide the Foundation with the greatest flexibility in meeting the area's changing needs and charitable opportunities.
Field of Interest Funds
A Field of Interest Fund enables the donor to respond to opportunities in broad, general areas of nonprofit activity. The Foundation requests proposals from nonprofit agencies providing services in that field, such as health care, education or the performing arts. The Foundation Board then evaluates projects and offers grants to agencies proposing the most promising ideas and vital services.
Donor-Advised Funds
The Donor-Advised Fund, created with a minimum of $5,000, is ideal for the donor who wishes to actively participate in grantmaking. The donor retains the privilege of recommending the organizations to receive grants from the fund, with final approval by the Foundation Board (an IRS requirement for all grant distribution decisions). The Foundation staff assists by making grant opportunities known, helping evaluate proposals, processing grants to donees and following up on results.
A Corporate Donor-Advised Fund allows corporations to create a fund through which they distribute their charitable contributions. The corporation issues a single check to the Foundation each year and refers all charitable requests to its Staff. The Staff acknowledges every request, evaluates proposals, makes recommendations to the corporation regarding charitable opportunities, issues grants to those selected, and follows up on accomplishments. The corporation receives full recognition for grants made and realizes cost savings in reduced staff time devoted to grantmaking, record keeping and tax reporting.
Designated Funds
In establishing a Designated Fund, the donor selects a specific charitable institution as the recipient, and grants are made to it annually as long as the named institution exists and continues to fulfill its intended purpose.*
An Agency Endowment, opened with a minimum of $5,000, is a Designated Fund established by a nonprofit to build its own supporting endowment. Its assets are pooled with total Foundation assets for improved investment opportunities, and the earned income is returned to the agency for its own use. The nonprofit agency benefits from the Foundation's professional investment management, accounting, annual tax reporting, fundraising seminars, publicity and staff consultation in cultivating deferred gifts for the endowment.
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