Many philanthropists turn to community foundations to set up a charitable fund to simplify the process. Community foundations provide staff assistance, community expertise and a variety of services that help donors set up funds and award grant dollars to nonprofit organizations. If you’re considering establishing a charitable fund, where should you begin? Your local community foundation is always a great choice.

We have outlined simple steps to help get you started.

How to Start a Charitable Fund

Starting a charitable fund is easy if you follow these simple steps:

1. Choose Your Passion

What social impact area do you want to support? Are you interested in helping veterans? Or, maybe you have a passion for early childhood education? Or, possibly you want to throw your support behind age-friendly communities to create a more inclusive environment for older adults? The first step in setting up a charitable fund is identifying who or what you want to support. Community foundations are great resources if you need information on community needs and opportunities.

2. Decide When to Give

Do you want to establish a fund today so you can give during your lifetime and witness the impact? Or, would you prefer to defer your gift through a will or other planned gift? Our staff works with you, your family and your team of professional advisors to determine how you can best achieve your charitable goals and maximize your tax benefits.

3. Choose What to Give

Almost any kind of asset may be used to start your charitable fund at a community foundation, including cash, publicly traded securities, closely held stock, interests in limited partnerships, real estate, life insurance, personal property and private foundation assets. If you open a donor-advised fund, tax deductions are earned at the time of your gift, and you can award grants any time in the future.

4. Pick a Type of Charitable Fund

Community foundations offer several types of charitable funds to help you fulfill your goals, including unrestricted, field of interest, designated, and donor-advised. Each provides their own set of benefits, flexibility and timeline based on your charitable giving needs.

5. Decide to Make Your Fund Endowed, Quasi-Endowed, or Non-Endowed

An endowment is a permanent fund. Endowment funds are pooled for maximum benefit and invested to achieve long-term capital growth. A quasi-endowment is similarly invested as an endowment but may not be permanent based on the annual spendable rate that the donor sets. Non-endowment funds have no permanent principal balance and are immediately available for grant distribution.

6. Name Your Charitable Fund

Charitable funds can be named after your family, to memorialize someone special, to recognize your passions, or on behalf of a business or an organization. Whatever the reason, your fund will carry the name you choose. If you prefer anonymity through a community foundation, you can choose a name that reflects your charitable purpose(s).

Community foundations like Whidbey Community Foundation will walk you through the necessary paperwork to finish setting up your charitable fund and explain important policies. We can work with you to create a tailored solution that meets your specific interests.

Questions on your options?

If you have questions about the Community Foundation, our funds, of how you can use us to give back, please call Jessie Gunn at (360) 660-5041 or email her at jessieg@whidbeyfoundation.org.