FAQs
What is the Greater Lowell Community
Foundation (GLCF)?
The GLCF is a regional partner in
philanthropy for individuals, families, foundations and corporations and
nonprofits serving Greater Lowell and communities in the Merrimack Valley. The
Foundation also serves as a major grant maker, civic leader, information
provider, community and non-profit advocate and convener, and a sponsor of
special initiatives that benefit the communities we service.
What is an Endowment?
The
commonly accepted meaning for endowment is a fund which is kept in perpetuity
to provide interest and dividend earnings for the benefit of an organization's
charitable cause. While the GLCF holds income-only endowments, it typically
spends between 3 to 5% of income and principal to insure payouts to nonprofit
agencies and other charitable beneficiaries during both good financial times
and bad, and relies on growing values over the long term to provide perpetual
support for its beneficiaries.
How can I create a fund?
Creating a fund at The Greater Lowell
Community Foundation is easy and straightforward. As a donor, you have
considerable flexibility in deciding how your fund will be managed to meet your
charitable goals. The Foundation can provide a simple agreement letter that you
should then review with your own attorney or financial advisor. Please contact
us to learn about all the options available to you.
What's the best time to give?
You may create a fund at any time during your
lifetime, or through a will or trust arrangement that benefits both your family
and your charity. Tax deductions are earned at the time of the gift, while
grant making from your fund continues into the future.
How should I name my fund?
You may name the fund after yourself or your
family, or create a memorial to someone special. Every grant made from the fund
will carry the name you choose. If you prefer anonymity, you can choose a name
that reflects your fund's charitable purposes.
What are the types of charitable fund options
available to me?
- Discretionary Funds:
These funds strengthen
nonprofit organizations through competitive grants recommended by its
Distribution Committee, which is composed of community members from all walks
of life. Discretionary funds can address unforeseen needs, emergencies and new
challenges.
- Donor Advised Fund:
Donors who wish to be actively
involved prefer this fund, as advisors and their family members make grant
recommendations.
Through
the creation of a donor advised fund, you can organize all your charitable
activities through one expertly-managed and cost-effective charitable vehicle.
Your gift qualifies for an immediate tax deduction, and you can take your time
deciding which organizations to recommend for grants.
- Field
of Interest Fund:
This fund reflects a donor's, or group of donors',
general interests and concerns and supports organizations accordingly. For example,
recipients may be a town's civic activities, the arts, economic development,
youth, the environment, human services or other causes or goals important to
the donors.
- Scholarship Fund:
This fund can support a wide
variety of educational needs and honor a family member, educational leader or
friend.
- Nonprofit agency Fund:
These funds help nonprofit
organizations stabilize and secure the future of their services. An Agency
Endowment Fund ensures that bequests or gifts benefit one specific nonprofit
organization, while Designated Funds benefit two or more organizations. The
Community Foundation's staff is available to help organizations build these
endowments by offering expert advice to Boards, staff and potential supporters.
- Supporting Organization: This is an attractive alternative to funding a private foundation because it offers superior tax benefits. While the Community Foundation appoints most of the Board members, the donor can serve and appoint Board members as well, and can name the fund, propose grants and review requests.
What kinds of assets can be used to create a
fund?
You can use almost any financial asset to
start a fund, including cash, publicly-traded securities, qualified retirement
plans and insurance policies. Real estate and tangible personal property may
also be used to establish a fund with prior approval from the GLCF Board of
Directors. Gifts of long-term appreciated property earn tax deductions for
their full market value, while eliminating any tax on the capital gains.
How much does it cost to establish a fund at
The Greater Lowell Community Foundation?
It costs nothing to set up a fund. The donor
or contributing agency signs a fund agreement provided by the Foundation,
therefore no legal fees are involved. Each fund held by the Foundation is
subject to two fees:
- Administrative Fee: An annualized administrative fee of 1.25% is assessed to the total market fund value on the last day of each quarter. The administrative fee is set by the Board of Directors and is used by The Greater Lowell Community Foundation to support its administration and programs.
- Investment Management Fee: Each fund is subject to a fee for custody of assets and investment management. These fees are based on the market value of the funds under management. We have an agreement with all of our financial advisors that the fees will not exceed 50 basis points.
Is there a minimum gift to start a fund?
An initial gift of $10,000 is needed for
a named, endowment fund. Smaller gifts can be made to start the fund with a
plan to reach the $10,000 minimum within 3 years.
Can I work with the Greater Lowell Community
Foundation through my financial advisor, attorney, or accountant?
We welcome working with your advisors as the Foundation
works with professional advisors every day, helping them to meet their clients'
charitable goals.
How will an advised fund be invested?
The Greater Lowell Community Foundation has a
number of Investment funds, which are managed by Enterprise Bank and Trust
Company, Eagle Claw Capital Management, LLC and UBS.
Please contact us if you
would like to receive a copy of our investment objectives and guidelines policy.
I want to make grants in the areas I care
about most, but I'm not sure which organizations to support. Can the Foundation
help me?
Yes. The Foundation has developed
relationships with most nonprofit organizations in our area and is aware of the
needs of the communities we serve.
We can provide you with detailed
information, and help identify the programs that are really working in the
areas of greatest importance to you. Contact us to learn about
opportunities to make strategic contributions to well-defined programs in
concert with the Greater Lowell Community Foundation.
Can grants through my Donor Advised Fund go
to organizations outside of Merrimack Valley?
Yes. Grants may go to qualified public
charities anywhere in the country or around the world.
What are the differences between a Donor Advised
fund at the Foundation and one at a commercially sponsored gift fund?
Although these products are similar in
function, the Greater Lowell Community Foundation offers several advantages
over commercially sponsored gift funds.
- As an actively involved community leader, The Greater Lowell Community Foundation has detailed, relationship-based knowledge of the nonprofit organizations in the communities we serve.
- Philanthropy and the support of area nonprofits is the GLCF's only business, consequently its sole focus is on making a difference in our community and with our donors.
- An investment in GLCF is an investment in the betterment of your community.
Is there a limit to
how many grants I can recommend in a year through my Donor Advised Fund?
No. In addition, there is no processing
fee per grant; however, we recommend each grant created, and awarded, should be
at least $250.
Can I involve family members and colleagues
in a Donor Advised Fund?
Anyone can make a contribution to a Donor
Advised Fund, and new Fund Advisors can be added at any time, offering family
members, and others, the opportunity for direct involvement.
Can my children become advisors to the
advised fund upon my death?
Yes. A donor can name any successor as an advisor
to an advised fund at any point in time. If no successor advisors are named,
the remaining balance of the fund is added to the Foundations discretionary
fund upon the death of the sole remaining advisor.
Are third party
contributions to my Donor Advised Fund tax deductible?
Yes. Anyone can make a contribution to
your Donor Advised Fund and receive tax benefits.
Can I name a
successor advisor to my Donor Advised Fund?
Yes. In fact all Fund Advisors are
encouraged to do so. If desired, Greater Lowell Community Foundation
staff will also consult with you to create succession plans aligned with your
charitable giving goals and designed to continue your legacy of giving.
Can my giving be anonymous?
Yes. If desired, your anonymity will be
maintained permanently or can be customized for each grant you make.
Additionally, Donor Advised Funds offer the advantage of privacy from the
public.
Can I make a gift at
my death of my retirement plan assets, such as an IRA?
Yes. The full value of these assets will pass
tax-free to a fund of your choice at the Foundation and result in a full
charitable deduction for your estate.
Can I make a gift of a life insurance policy to
the Greater Lowell Community Foundation?
Yes. You can name the Greater Lowell
Community Foundation as the beneficiary of one or more life insurance
policies. In addition, you can irrevocably designate the GLCF as both the
owner and beneficiary of a paid-up insurance policy. In this case, you
will receive an income tax charitable deduction equal to the lesser of the
replacement value or cost basis of the policy.
