Benefits of establishing your endowment at the Community Foundation of Utah

Invest in your agency

We understand that the decision to create an agency endowment is important and often requires multiple meetings of the Board and its Development, Executive, and Finance committees. We are excited about helping your agency understand the benefits, ramifications, and legal issues surrounding this decision, and want to make sure that all your questions are answered. Feel free to call us at any time.

Endowments give your known donors, and those identified by the Community Foundation of Utah, the opportunity to provide for the future needs of your agency. Placing your fund with us has several organizational advantages:

  • Economies of Scale: Your funds will be part of our pool of funds. The Community Foundation’s economies of scale provide the benefits of a diverse investment portfolio and low investment fees that typically come only with very large funds.
  • Investment Management: To ensure that the Community Foundation's portfolio is managed effectively, our Investment Committee, a volunteer group of some of the state’s leading investment managers, establishes investment policies including asset allocation and investment objectives, selects and reviews investment managers, and reviews asset growth and performance.
  • Fund Management Services: Administrative services provided include accounting, record keeping, and automatic grant distributions if desired. You will receive a quarterly financial performance report that includes beginning and ending balances, contributions, investment returns, and distributions.
  • Handling sophisticated gifts: The Community Foundation of Utah is able to handle gifts of publicly traded and closely held securities, real estate, planned gifts, options, life insurance and other types of gifts, and can provide the expertise needed to receive these types of gifts into your agency endowment.
  • Endowment Building Support: We have an exceptional network of professional advisors, including estate planning attorneys and wealth managers. These volunteers and our professional staff are available to speak with your staff, board members, and donors about gifts and other vehicles to benefit your endowment.
  • Visibility: The Community Foundation of Utah has quickly demonstrated its ability to identify new and emerging philanthropists, and to bring an important and long needed service to Utah’s philanthropists. Agencies that have endowment funds with the Community Foundation benefit from the exposure to our growing number of donor advisors and network of entrepreneurs and investors. Your endowment may also benefit from increased exposure to potential donors and the general public, through listings in our publications, press releases, web page, and participation in Community Foundation events.
  • Low Cost: There is no fee to establish, transfer, or close a fund at the Community Foundation. The minimum opening balance for an Agency Endowment Fund is $5,000. To encourage Utah’s nonprofits to build for their future, the foundation charges no administrative fees until the fund reaches $50,000. Nonprofit funds are assessed an annual fee of 0.5% on balances over $50, 000, with further reductions on higher balances.

Establishing a fund with the Community Foundation of Utah

The process of establishing a fund within the Community Foundation of Utah is relatively simple.  Representatives of the organization are encouraged to meet with the Community Foundation’s Chief Executive Officer to learn about parameters for acceptance, management, distributions, and other matters prior to sending a check to establish a fund. We are always pleased to attend meetings with your staff or Board as well.

  • The minimum amount of $5,000 is required to establish a fund. Anyone can make a gift of any size at any time to the fund after it is established.
  • There are no fees to start the fund and no penalties to end it.
  • There is no administrative fee charged to the fund by the Community Foundation until such time as the fund reaches $50,000.
  • Funds with balances between $50,000 and $1.5 million are charged an annual fee of .5%.
  • There is no withdrawal fee for funds above $50,000, but we encourage annual distributions, if made at all. We charge an administrative fee of $100 per nonscheduled withdrawal to cover the cost of sales of assets and to discourage multiple withdrawals.

Variance power.  It is important to understand that the Community Foundation has the power to modify the distribution of funds to a specific organization if, in the sole judgment of the governing body of the foundation, a distribution of those funds becomes impractical, impossible or illegal or inconsistent with the charitable needs of the community.  This might include a request to use the funds for a purpose not consistent with the mission or a use not allowed when the endowment was created. The Board of the Community Foundation would also use ‘the variance power‘ if the organization no longer existed. Since the Community Foundation serves as the guardian of the fund, the variance power enables the Board to honor its obligation to use the fund to meet its intended purpose.

Next steps

The Community Foundation will provide a fund agreement. The agreement is very important because it guides the future distributions to the organization from the investment income or as specified in the agreement. The Board of the Community Foundation reviews and approves these documents. Once an organization’s board of directors has decided to make a donation to establish a fund from its own assets, the organization should provide:

  • A copy of the IRS determination letter specifying that it is a 501(c)(3) organization.
  • A copy of board resolution or board minutes allowing for expenditure of funds to establish a fund.
  • A copy of the portion of the organization’s bylaws that specifies the purpose of the organization.

The organization also needs to choose the fund’s name and purpose.

Once the fund is accepted and established, anyone may add to the fund with a donation of any size at any time. All donations should be sent to the Community Foundation of Utah with an indication that they are to benefit the XYZ Fund (or whatever name you choose).  These funds are held in a separate account, but all assets are reported to the agency, along with donors should they wish to be acknowledged. Planned gifts are also disclosed to the agency, should the donor wish the agency to be notified.