DESIGNATED FUNDS
Some donors may wish to provide long-term support for a specific community need or a specific nonprofit organization.
A designated fund at the Mead Area Community Foundation is designed to give donors the confidence that their gift will always be used for its stated purpose and it will remain a permanent fund through our board of directors' careful stewardship of funds.
Creating a designated, permanent endowment fund at a community foundation often makes more sense than giving such a gift to a charity directly, for three reasons:
1. PERMANENCY
A community foundation can give donors greater confidence that their gift will always be used for long-term support and that principle won't be tapped for short-term, short-sighted needs.
In large part, this confidence rests on the breadth, character, and commitment to the Mead Community of our board of trustees. It also rests on the fact that our foundation, by its permanent nature and broad scope, brings a long-term vision to specific decisions.
2. INVESTMENT EXPERTISE
A community foundation often has greater expertise in managing investments than do the boards of other nonprofit organizations. At the very least, the appeal of a community foundation rests on the idea that not all nonprofit organizations need to reinvent the wheel when it comes to investing. If a community foundation can serve specific nonprofit organizations in this capacity, we aim to do so for the benefit of the larger community as a whole.
For example, one might reasonably suppose that a museum board's primary role should be managing a museum, not managing investments. Similarly, the focus of an after-school program's board should be running a strong after-school program, not managing investments. In this sense and in this capacity, we at the community foundation hope and aim to become servant-leaders to the nonprofit community in the Mead area.
At the same time, it must be said that we do not claim to be the best at managing investments or giving wise oversight to the nonprofits we aim to serve. We simply hope that we might be of service to at least some nonprofits.
3. VARIANCE POWER
Finally, a community foundation has the ability to redirect the specific use of a designated fund, should the fund's primary beneficiary or purpose ever cease to exist, become impossible to fulfill, or change in such a way that support from the fund is unnecessary or irrelevant.
This "variance power" is unique to community foundations. It is designed to give donors the confidence that even if the original intention of their gift becomes impossible to fulfill, the community foundation will always be able to ensure that the original spirit of their gift remains intact.
For instance, a fund created to fight polio might today be used to fight multiple sclerosis. Likewise, a fund created 50 years ago to benefit the Mead Consolidated School would now most likely be used to benefit the SOS fund for the St. Vrain School District. In both cases, there would be no need to hire lawyers, bring the case to court, or incur other unnecessary expenses to make these necessary changes.
To learn more about designated funds and their possibilities, please contact us.