FAQ for Donors
- Why should I establish a named fund at The Erie Community Foundation?
- Who do I contact if I have questions?
- How do I create a fund?
- Are you interested in endowments or gifts that help charities today?
- Are you interested in current gifts, or a gift through my will or estate plan?
- How is a community foundation different from a private foundation?
- How much money is needed to create a named fund within The Erie Community Foundation?
- What if I just want to remember charity through a will or other estate plan?
- What is the Elisha H. Mack Society?
- How much to I need to give?
- What is the spending policy?
- Can my grant making be more than just the income from an endowment fund?
- Is The Erie Community Foundation just for donors interested in helping local organizations?
- Can I create a fund that benefits individuals?
- What about scholarships?
- What is a donor advised fund?
- Why is this helpful?
- What about fees?
- How does The Erie Community Foundation manage its endowment?
- How do I know The Erie Community Foundation will do what is says it will do?
- What else do I need to know?
Why should I establish a named fund at The Erie Community Foundation?
The mission of The Erie Community Foundation is to help you accomplish personal philanthropic and estate planning objectives in a cost-effective fashion. You’ll never feel any pressure when discussing your philanthropic dreams. charitable goals.
We do not annual fund goals or campaign deadlines. Our goal is to help you, accomplish your objectives.
Who do I contact if I have questions?
Your primary contact is Michael Batchelor, president of The Erie Community Foundation, he is available at (814) 454-0843 or toll-free 866-676-5684. Other Foundation staff are also available for your questions and comments.
How do I create a fund?
The Erie Community Foundation uses a "Letter of Agreement" format to establish a fund. This simple document outlines the purposes of the fund so that we are clear on the donors intentions. Funds can be created in a matter of minutes with no costs. If you’d like some sample documents for your office, please e-mail Michael Batchelor.
While there is no requirement that you consult a professional advisor, The Erie Community Foundation always recommends donors consider doing this before making any significant philanthropic decision. The Foundation annually distributes our sample documents to a wide-array of professional advisors.
Are you interested in endowments or gifts that help charities today?
Actually, both. Most of our named funds are permanently endowed. This creates a growing source of hope and support for generations to come. It is also possible to create funds that spend-down all, or part, of the original gift. There is actually no limit to the charitable goals that can be accomplished through The Erie Community Foundation.
Are you interested in current gifts, or a gift through my will or estate plan?
Many donors like to establish funds during their lifetimes. This lets them see the good work that can be done through a partnership with The Erie Community Foundation. We are also interested in helping donors who want to leave a legacy through their will or other estate plan.
Over 500 different named funds operate within The Erie Community Foundation. Most of these are endowed to provide perpetual support for causes or organizations favored by the original donors. It is also possible to create funds that distribute part, or all, of the original gift over a period of time.
At other times, 100% of a gift immediately passes-through The Foundation to a favored charity.
How is a community foundation different from a private foundation?
A community foundation is a collection of named funds all operating under the administrative umbrella of a single, publicly-supported, entity. Community foundations typically operate broad-based grant making programs. They also distribute specific grants as defined by original donor agreements.
Donations to a community foundation generally qualify for higher tax deductions. As many different funds are pooled, administrative costs are typically less. A single audit and a single 990 form cover all funds operating within a community foundation. Community foundations also pay no tax on their earnings. There are no minimum payout requirements and funds can accumulate for some future charitable purposes.
While professional advisors vary on the specific amount, many will agree that private foundations are not cost-effective for donations of $1 million or less.
The end result of this pooling of funds is the saving of administrative costs; making more funds available for deserving charities.
How much money is needed to create a named fund within The Erie Community Foundation?
Generally speaking, named funds are established with gifts of $10,000 to $25,000 or more. We can also work donors interested in building up a fund over time.
It is also possible to make gifts, of any size, that simple pass-through The Foundation to a cause or organization or your clients choosing. Finally, many of the funds established within The Erie Community Foundation accept gifts of any size from the general public.
What if I just want to remember charity through a will or other estate plan?
The Erie Community Foundation can give you sample language for inclusion in a will or estate plan. We would like to know you’ve made this decision so we can include you in our The Elisha H. Mack Society.
What is the Elisha H. Mack Society?
This is a donor recognition society specifically for those individuals who are using The Erie Community Foundation to assist charity through a bequest, trust, life insurance, charitable gift annuity, or other planned giving vehicle. We do not need to know amounts. We are just trying to build a large list to encourage others to take similar steps.
For current membership list, click here.
How much to I need to give?
Scholarship begin at $20,000 and agency funds begin at $25,000. All others begin at $10,000. We are always flexible and work on your timeframe. You can also build up your fund over a period of a year or two. Give us a call to discuss how we can help you achieve your philanthropic goals, locally and nationally. Grant distributions from your fund should be a minimum of $250.00.
What is the spending policy?
Endowed funds support favored causes or organizations forever. To accomplish this, we establish a spending policy that would allow charitable distributions equal to 4.5% of a twenty quarter (five years) rolling average of your fund balance.
Can my grant making be more than just the income from an endowment fund?
Absolutely. You can create funds that spend down principal balance over time. The Erie Community Foundation can also handle immediate "pass-through” gifts where 100% of the donation is granted in accordance with your wishes. Our goal is to be a flexible tool to assist with your charitable giving. There is virtually no limit to the charitable objectives that can be accomplished through The Erie Community Foundation.
Is The Erie Community Foundation just for donors interested in helping local organizations?
Our unrestricted endowments are limited to organizations serving Erie County. Income from these named funds is distributed to a wide variety or local organizations through a time-tested competitive grants process.
Many donors also create funds dedicated to a specific local nonprofit organization(s) or cause. Donors can also create, in their lifetimes or through a planned gift, other funds that benefit favored causes throughout the country.
Can I create a fund that benefits individuals?
To be a tax-deductible activity, there must be a broad charitable class.
Grants can not be made to a specific person. Grants from named funds must go to a qualified charity. This is actually one way our staff can help. If there are ever any questions, we can do the due diligence needed to insure a grant is legal and charitable.
What about scholarships?
The Erie Community Foundation is home to nearly 100 different scholarship funds. These are very popular with donors. Grants from these funds may go to individuals; but you can not earmark a specific beneficiary. Foundation staff can help with language to insure the scholarship is operating legally. There is no need for advance IRS qualification of the scholarship fund.
What is a donor advised fund?
This is one of our more popular options and a great alternative to the private foundation model. These funds are created during your lifetime and can be enhanced with an estate gift. You will receive a 100% tax deduction for the original, and any subsequent, gifts. The Erie Community Foundation then endows the fund. You then make grant recommendations from the income or, in rare cases, the principal. The Foundation takes care of all due diligence, paperwork, and administration. You receive all the recognition from the charity, unless you choose to remain anonymous.
Why is this helpful?
Many donors are using the income from investments to fund charitable gifts. A donor advised fund lets this continue, with the added benefit of a 100% tax deduction for the principal transferred to The Erie Community Foundation. Many donors appreciate the ability to have The Erie Community Foundation handle the check-writing and due diligence. The Erie Community Foundation also offers educational services to help your client maximize their philanthropic impact. If needed, we can also help keep your donation anonymous.
What about fees?
There is no fee to establish a fund. Our administrative fee is 50 basis points for agency funds and 60 basis points for donor advised and donor designated funds. By pooling all of our funds together, we are able to better negotiate lower fees and take advantage of greater investment opportunites resulting in significant economies of scale.
How does The Erie Community Foundation manage its endowment?
Generally speaking, all endowed funds within The Foundation are pooled and operate under a single investment management policy. Our primary investment objective is to preserve, and enhance, the charitable “purchasing power” of endowed funds over time.
To accomplish this, we work with an independent investment consultant to create strategies designed to surpass a hurdle rate of 9%. Endowed funds typically return 4.5% to charities. Inflation will be about 3%. Expenses will be about 1%. Our goal is to have our net investment returns surpass 9% or more, over time, so that more good work can be done in our community.
The Foundation's finance committee closely monitors investment performance. Individual managers are held accountable to specific benchmarks. When necessary, changes are made. We also measure ourselves against our peers. Over time, we are confident our endowment management policy is working.
There are times when donors can have some input into investment management. Generally speaking, these are limited to funds of $1million or more.
How do I know The Erie Community Foundation will do what is says it will do?
We have been helping donors and professional advisors since the founding of our predecessor organization, The Erie Endowment, in 1935. We are a mainstay in our community.
You should also take comfort in knowing that a wide-array of business and professional organizations help select our board of trustees. We are accountable to you, and to the public. Our bylaws give the Erie County Bar Association, United Way of Erie County, The Orphan’s Court, The Erie Regional Chamber and Growth Partnership and The Erie County Medical Society the opportunity to appoint a board member.
This is your guarantee that there will always be good civic leadership watching over your Erie Community Foundation.
What else do I need to know?
We are here to help. We understand decisions are made on the donor’s timetable. There is never any specific time pressures related to a charitable gift to The Erie Community Foundation. Consequently, we are always happy to meet with you to discuss plans and alternatives.
Our goal is to help you, or your client, accomplish your objectives. Please view us as a resource and do not hesitate to contact Mike Batchelor, president with any questions.