An endowment fund wields significant power due to its ability to generate perpetual income for an organization or cause. Providing sustained financial support, stability, and flexibility for a charitable purpose is an honorable and lasting legacy for philanthropists.
Perhaps you’ve always been intrigued by the possibility of establishing an endowment to create a permanent source of philanthropic support for the community you love, but you thought the process might be difficult or daunting. When you work with a community foundation, it’s easy–and enjoyable–to structure an endowment to improve the quality of life for future generations.
You’re in good hands
Many community-minded individuals have served on the boards of directors of charitable organizations in our region. If you’ve served on a charity’s board, you are no doubt familiar with the concept of an endowment. Many charities establish endowment funds and reserve funds at Rancho Santa Fe Foundation (RSFF) to help ensure that their missions stay strong during economic downturns and periods of increased community need.
What you might be less familiar with, however, is an endowment fund established at a community foundation by an individual or family. Every year, our team works with people like you to establish endowment funds to support the needs of our region in perpetuity.
Five FAQs to help you establish endowment gifts
Here are answers to five frequently asked questions about setting up an endowment fund.
Why does RSFF offer endowment funds to individuals and families?
RSFF serves as the hub of philanthropy for many families in our community. We connect donors like you to community needs you care about, and this includes offering the opportunity to make a charitable investment that supports a range of community needs now and in the decades ahead–needs that cannot be predicted. That’s the purpose of an endowment: to provide a steady stream of dollars, far into the future, to meet community needs as they arise.
How do endowment gifts work?
“Endowment” is the word often used to refer to a designated pool of assets that are invested by the community foundation and tracked separately such that a modest portion (usually based on a percentage) of the assets are distributed each year to charitable causes, and the rest of the assets remain invested to grow in perpetuity. This growth, in turn, helps the endowment provide even more support each year to the causes for which it was established. The Foundation team is experienced at managing the accounting, investment, and distribution aspects of endowment funds.
How can I stay involved with my endowment fund after it’s established?
First and foremost, you can name the endowment fund anything you want, such as the “Smith Family Endowment Fund,” or something more anonymous such as the “Endowment Fund for Our Future.” In addition, our team is happy to keep you informed about the positive change in the community that is occurring thanks to the distributions from the endowment fund you’ve established. We can continue to keep your children and grandchildren informed, too, beyond your lifetime. In this way, your legacy continues through the generations.
Who decides where the endowment distributions go each year?
Rancho Santa Fe Foundation is itself a permanent institution. Our board and staff are committed to keeping a finger on the pulse of the region’s greatest needs and maintaining a deep knowledge of the charitable organizations that are meeting these needs every day. This is the community foundation’s mission in perpetuity.
The Foundation’s team is made up of dedicated and knowledgeable professionals who understand our community and build ongoing personal relationships with the people working at the region’s charitable organizations. Based on your goals and desires, which are outlined in a fund agreement, distributions from your endowment are recommended either by yourself or RSFF staff. Then our independent board of directors reviews and approves these distributions to ensure that they fulfill your charitable goals for establishing the endowment in the first place.
What does it take to establish an endowment fund?
Setting up an endowment fund is as easy as setting up any other type of fund at RSFF. Our team will prepare simple paperwork capturing the name of the endowment fund and any areas of interest or specific nonprofit you’d like to support. Then, you can transfer cash—or, even better for tax purposes, you can transfer appreciated assets such as stock or real estate. You’ll be eligible for a charitable tax deduction in the year you make the transfer to establish the fund.
We look forward to working with you to support our community and your favorite charitable causes for generations to come! If you would like to speak directly to our team about endowment gifts, please contact our VP of Philanthropy & Impact, Amy Myers.
