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Why Start a Fund

Our donors help us build our community.

The reasons to start a fund at the Winona Community Foundation is as diverse as our community. The primary reason, however, is a desire to make an impact on our community and the causes you care about. The Winona Community Foundation helps you achieve this goal by providing flexible, efficient, and tax-effective ways to ensure you achieve the greatest possible impact with your charitable giving.

Simple Steps to Start a Fund at the Winona Community Foundation

1

Determine purpose or intent

2

Talk with a Foundation staff about types of charitable funds

3

Complete a simple fund agreement and make an establishing tax-deductible gift

Once your fund is established:

  • Add to the fund at anytime
  • Make grant requests to distribute to eligible charities (we help you determine this!)

Types of Funds

When you establish a Donor Advised Fund (DAF) at the Winona Community Foundation, you make an irrevocable gift to the Foundation and receive an immediate tax deduction for the gift. In exchange, you retain the right to name the fund, recommend grants from the fund, and to name successor advisors. Your fund’s assets are co-mingled and invested with those of the Foundation where it benefits. Your DAF can be endowed or spendable. Although many people with establish a DAF during their lifetime, many will do so through a gift in their will or estate.

You support multiple charities and would like a way to ensure your gifts continue to benefit them today and into the future. When you establish a designated fund, you name the fund and the charities it will benefit. The Winona Community Foundation takes all responsibility for making distributions in a timely manner. A designated fund can be established as an endowed or spendable fund.

These funds are broad in purpose and allow donors to target their giving to reflect a passion for a particular cause or area of interest. Examples include but are not limited to education or the environment. The Board of Directors of the Winona Community Foundation is responsible for making grants to charities that align with the field of interest. You may choose this type of fund to focus your giving and to encourage others to give to your field of interest.

Many people want to pay tribute to a loved one or assist young people pursuing a career goal similar to their own. Whatever the reason, establishing a scholarship fund at the Winona Community Foundation is one way to accomplish this. There are very specific rules around scholarship funds. While anyone can establish a scholarship fund, they cannot have any undue influence on the selection of the scholarship recipient, therefore independent committees are often used to select recipients.

This arrangement works for start-up nonprofit organizations, seasonal nonprofit organizations, and short-term projects or initiatives. Fiscal sponsorship allows an organization or project to enjoy the benefits of the Winona Community Foundation’s nonprofit status while raising funds for their mission or project. There are specific application criteria that must be completed prior to establishing a fiscal sponsorship fund at the Winona Community Foundation. Contact the Foundation at 507.454.6511 or [email protected].

The Winona Community Foundation serves a variety of nonprofit organizations seeking to benefit from its investment expertise, gift processing capabilities, accounting expertise and more. We do this by establishing agency funds for specific nonprofits. They may choose to have their endowment funds invested with us or their entire business operations administered by us. This allows them to focus on delivering on their mission.

Endowments and Non-Endowed Funds

When you establish a fund, you will be asked to determine if you want to allow granting from the principle or if you want to endow the fund. When you choose to an endow fund, the original gift along with any additional gifts are invested in perpetuity. That means you will grant from earnings based upon the Winona Community Foundation’s current spending policy (5% of the average market value of invested assets on December 31 – the average market value is calculated using the preceding 11 calendar quarters). This spending policy may be reviewed and adjusted from time to time and is designed to ensure your philanthropy lasts forever.

Benefits to donors

  • Charitable impact: By working with contributions from many donors, gifts of all sizes leverage their impact on the community. In addition, over the years, each permanent gift will support grants totaling many times the original contribution.

  • Performance and flexibility: The spirit and intent of each donor’s charitable wishes is honored through the generations, regardless of the shifts and changes within our region. If the intended purposes of your gift become obsolete, the Foundation’s authority to amend provisions of your fund will ensure that the fund will continue to meet challenges as they emerge in the future.

  • Peace of mind: Creating a fund or contributing to an existing fund is a simple process. Once complete, you retain the satisfaction of giving while the Foundation takes care of the paper work. The Foundation’s Board of Trustees prudently manages the funds. Because funds in a community Foundation are pooled for investment purposes, donors have the advantage of a diverse investment mix. You can add new gifts at any time, which is a real advantage in tax planning.

  • Personal benefits: Because the Winona Community Foundation is a public charity rather than a private foundation, you receive the maximum available tax benefits for charitable contributions. Those who create donor-advised funds receive a tax credit in the year the gift is given and then may suggest distribution from the fund over a longer period of time.

  • Accountability: Annual reporting through an independent audit and filing tax returns, public disclosure of all grant activities and careful selection of members for the Board of Trustees assure continued use of funds in the public interest.

  • Choose a type of fund: An unrestricted fund allows the Foundation to use its discretion in distributing grants to innovative and worthwhile programs. Or you may prefer to designate your funds for a specific purpose or to benefit a specific charitable organization. You also may choose to advise the Foundation regarding prospective grants from your fund.

  • Choose a name for your fund: Most funds are named for the donor’s family or as a memorial to someone special. You may prefer anonymity or a name that reflects your fund’s charitable purpose.

When to create a fund

There are many times for individuals, families and corporations to make gifts—large or small—to the Winona Community Foundation.

Giving Now

The charities you support now can continue to be supported during your lifetime and in perpetuity through the establishment of a fund with the Winona Community Foundation.

Give Later

There are many attractive arrangements for giving future or deferred gifts. Deferred gifts give you the benefit of a current tax deduction in exchange for the commitment of funds to a charitable purpose or purposes at some later date, often after your death. The result may be an increase in current spendable income for you or your family and later a substantial fund to help others through the Winona Community Foundation. The remainder interest in real estate, charitable remainder trusts, charitable lead trusts and gifts of life insurance all can be used to create funds in the Winona Community Foundation.

Bequests Through Wills and Trusts

After providing for your loved ones, you will want to consider creating a fund at the Winona Community Foundation or adding to the one you already have. Estate taxes are saved and the good works you care about during your lifetime continue to benefit through a living memorial established with the Winona Community Foundation.