Types of Charitable Funds

 

THE JEWISH COMMUNITY FOUNDATION will assist you to establish the type of endowed or non-endowed fund that best serves your charitable interests. There are five general categories of funds that you may create.

UNRESTRICTED

The general unrestricted fund. A general collective fund which is not donor designated for use. This fund distributes its assets according to a policy adopted by the Foundation Board.
A named unrestricted endowment or fund. An individual endowment or fund which is not predesignated for use. It is used for similar purposes as the general unrestricted fund. However, it is may be named by you and all grants are made in its name.

Unrestricted endowments and funds offer the community the greatest flexibility in meeting emergencies and for addressing special needs as they arise.

RESTRICTED

A designated endowment or fund. An endowment or fund used strictly in accordance with purposes that you designate at its inception. Purposes may include any charitable activity or the support of a charitable organization. The purposes selected may be as broad or as narrow as you wish. Examples include:

* Support of an organization such as the JCC, JFS, a senior citizen’s facility, a Jewish school, a Synagogue.
* Support of a program or activity such as scholarships, summer camp, or kosher meals on wheels.
* Support of a field of interest such as services to seniors, children at risk, early childhood education.
* Any worthy purpose you wish to support.

ANNUAL CAMPAIGN ENDOWMENT

This is a designated endowment whose sole purpose is to perpetuate your annual campaign gift when you are no longer capable of contributing each year. This is known as a PACE (perpetual annual campaign endowment) or a LOJE (a PACE at the Lion of Judah level).

DONOR ADVISED

Grantmaking funds that support a broad range of charitable organizations throughout the United States and Israel. Recipient organizations must be tax exempt and must have purposes that fall within the broad range of Jewish philanthropic values. They need not be Jewish and need not be local. These funds may provide for the substantial involvement of your spouse and children.

A philanthropic fund. This is a “donor advised” fund into which charitable contributions are made and from which grants are distributed. You recommend the distributions to be made. All distributions are made in the name of your fund.

A supporting foundation. This is a separately incorporated foundation whose board has complete control over the management, investment and distribution of its assets. It has its own tax exempt status as a “public charity” because it has a specifically defined relationship with the Jewish Federation. You and your family serve on the Board of Directors.
The advantages of a supporting foundation over a private foundation are substantial. They include tax savings, increased contribution limits, less operating restrictions, relief from paperwork and reduced federal filing requirements. A supporting foundation is preferable for a philanthropist who devotes a substantial amount of assets to charity and who wishes to be identified with the Jewish community.

LIFE INCOME FUNDS

There are many advantages to such gifts:

• You receive a very high income.
• Part of the income may be tax-free.
• You may take an immediate income tax deduction for the present value of the gift.
• Contributing appreciated assets avoids capital gains tax.
• The assets are not considered when calculating estate tax.