Types of Funds We Offer

A Fund Agreement is required to establish a fund with the Ann Arbor Area Community Foundation. The minimum fund balance for each fund type is shown in the information below.

Endowment funds are invested for perpetuity. There are four basic types of endowed funds: unrestricted funds, field of interest funds, and designated funds (including agency endowments, scholarships, and AAACF administrative endowments). We also offer donor advised funds which are non-endowed funds because they can be 'spent down' by donors (although many of our donors opt to treat them as permanently endowed and voluntarily adhere to our spending recommendations).

Unrestricted Funds allow the Foundation the greatest flexibility in meeting the challenges of our community because donors place no restrictions on how such funds may be used. Distributions from these permanently endowed funds are directed to current and emerging needs of the community as identified by the Foundation's Board of Trustees and the Distribution Committee. It is through the judicious use of these funds over the years that the real strength of a community foundation is demonstrated.

• Named unrestricted funds can be established with a minimum contribution of $5000.

• Fee: 2% of the market value of the fund established on September 30 computed with a 16-quarter rolling average.

• Click here to preview a sample agreement for an unrestricted fund.  To see a list of the Foundation's unrestricted funds (updated quarterly), click here.

• Named field of interest funds can be established with a minimum contribution of $25,000.

• Fee:  2% of the market value of the fund established on September 30 computed with a 16-quarter rolling average.

• Click here to preview a sample agreement for a field of interest fund.  To see a list of the Foundation's field of interest funds (updated quarterly), click here.

Donor Advised Funds provide donors with maximum convenience and flexibility. Donors can make one simple donation – taking a charitable deduction one year - and make distributions over several years. Many of our donors contribute to their funds yearly.

Donor advised funds enable donors to offer recommendations for grant distributions to specific charities. All such recommendations are subject to Board approval; grant recipients must be recognized as tax exempt charities by the Internal Revenue Code.

For a list of donor advised funds at AAACF, click here.

With this fund type, donors have the ability to “spend down” the corpus of their funds. Many of our donors choose to treat their funds as permanently endowed and voluntarily follow the Community Foundation’s Spending Policy guidelines.   Fund minimums and fees charged by AAACF differ based on whether donors have chosen to treat their funds as endowed or non-endowed:

Traditional Donor Advised Fund:

Minimum gift: $20,000
Fund fee: Graduated schedule based on market value of the fund on September 30 computed with a 16-quarter rolling average.

          1.0%     Market value $20,000 – $1,000,000

          0.75%   Market value $1,000,001 - $2,500,000

          0.5%     Market value $2,500,001 - $4,999,999

          0.25%   Market value $5,000,000 and higher

Spend-Down Donor Advised Fund (non-endowed):

Minimum gift: $20,000
Fund fee: Funds not pooled with endowments due to shorter spending horizon.  Annual fees will be charged according to the same schedule as donor advised funds, except that the market value used in the calculation will be the actual market value at 9/30 of the preceding year, without using the 16 quarter average method.

Special Pass-Thru Donor Advised Fund:

Minimum gift: $50,000
Fund fee: Funds with less than one year spending horizon.  1% of original gift amount, assessed at the time of the gift.  In addition, an amount equal to 5% of the original gift will be placed in an Administrative Endowment fund. 

Designated Funds provide regular income to a specific named charitable organization. If the named charity is no longer active or providing a needed service, or if the purpose of the fund becomes impractical or impossible to fulfill, the Board of Trustees of the Community Foundation may select another recipient with a similar purpose.

AAACF has a variety of designated fund categories for specific purpose(s), programs or organizations.

• Nonprofit Agency Endowment Funds help to ensure an agency's future security, stability and long-range financial planning. These funds can be established by the nonprofit's themselves or by third party donors (individuals, families, or businesses). The Foundation holds legal title to the fund and, on an annual or semi-annual basis, makes distributions back to the agency as an ongoing source of support.
  

  Nonprofit Agency Endowment Funds can be established with a minimum contribution of $10,000. For new funds established after October 1, 2005, a $50,000 minimum balance is required before granting can begin.  Click here to preview a sample agreement.
  

   Fee:  $500 Minimum fee for new funds after 10/1/05

             1.0%  Market value up to $100,000

             0.75%  Market value $100,001 - $999,999

             0.1%  Market value $1 million and higher

   

  Additional fees will be charged for non-standard services including assisting with fund raising events, and processing extraordinary numbers of gifts in a year.

   

  For a list of agency endowment funds that AAACF currently administers (updated quarterly), click here.

   

• Scholarship Funds give area students the opportunity to pursue their academic goals and can be established by companies, organizations, families and individuals. Donors may define the scholarship's advisory committee, guidelines for candidate selection and award use. Donors also can designate one or more colleges or universities to select the scholarship recipients.

Scholarship Funds can be established with a minimum contribution of $20,000 (three years allowed to reach minimum) Click here to preview a sample agreement.

Fee:  $100 minimum fee

          1.5%   Market Value from up to $100,000

          1.0%   Market Value from $100,001 - $999,999

          0.5%   Market Value from $1 million and higher

 

If a scholarship fund is advised by the Foundation's Scholarship Committee, the fee will be assessed on a case by case basis (minimum $500/year). New scholarship funds after 10/1/05 will be charged a one-time set-up fee of $500 to cover the cost of establishing the fund and training the donor/committee on processes and procedures.

 

Additional fees will be charged for non-standard services including assisting with fund raising events, and processing extraordinary numbers of gifts in a year.

 

For a list of scholarship funds that AAACF currently administers (updated quarterly), click here.

• Administrative Funds provide financial support for day-to-day operations of the Ann Arbor Area Community Foundation. These funds enable the Foundation to charge reduced management fees to other funds, thus preserving more dollars for grantmaking.
  

  Administrative Funds can be established with a minimum contribution of $10,000.
  
  Fee:  2% of the market value of the fund established on September 30 computed with a 16-quarter rolling average.
          

  For a list of administrative endowment funds that AAACF currently administers (updated quarterly), click here.

SPECIAL SITUATIONS

Special Projects (i.e. Temporary) Funds

Special Project (i.e. Temporary) Funds can be established if the AAACF Board of Trustees determines that there is an unmet charitable need and passes a resolution to establish a fund. Donors contribute to the fund. Over time the fund is expended in order to meet the community need.

• Fund minimum: determined on a case-by-case basis. Click here to preview a sample agreement. [link to Special (i.e. Temporary) Fund Agreement - sample']

• Fee: determined on a case-by-case basis. Usually 1% of gifts received.

Supporting Organizations

Donors establish supporting organizations at the Foundation as independently incorporated tax-exempt nonprofit organizations with separate governance. A supporting organization is a grantmaking organization that avoids private foundation status by being operated, supervised, controlled by, or in connection with the Foundation. This requirement can be met in part if the Board of the Foundation appoints a majority of the board of directors of the supporting organization. Supporting organizations require the approval of the Board of Trustees. For more information about support organizations, click here.

Geographic Affiliate Funds

Geographic affiliate funds are established for the support of a variety of charitable purposes and organizations within a specific community or region. A local advisory committee is appointed within each affiliate community, which has grantmaking and asset acquisition responsibility for that area. Affiliate community funds enable smaller communities to enjoy many of the benefits of a community foundation, including the State of Michigan Tax Credit, while taking advantage of the Foundation's services, staff and expertise and avoiding the costs and administrative burdens of a separate community foundation. Affiliate community funds must abide by the Foundation's gift acceptance policies. Affiliate community funds require the approval of the Board of Trustees.

AAACF's has two geographic affiliate fund to date, the Ypsilanti Area Community Fund (YACF) and the Community Foundation of Plymouth (CFP).

Supporting Organizations

High impact, high involvement, low hassle.

A Support Organization is an excellent alternative to a private foundation - with only a fraction of the administrative responsibilities. You select some of the board members, maintain personal involvement, and support the causes you care about the most while enjoying the favorable tax treatment of a public charity.

Though connected to AAACF, the Supporting Organization you establish is a separate charitable entity - that bears your name, the name of your family or business, or honors any person or organization you choose.

You select up to 49 percent of your board of directors; the Community Foundation assigns the rest (so that you benefit from affiliation with a public charity). You and future generations may appoint successor board members to help direct the Supporting Organization you establish and define its purpose and mission.

Your contributions may yield a greater tax deduction than those made to a private foundation, and the Supporting Organization is not subject to any other private foundation rules and regulations, such as paying an excise tax or making a minimum payout each year. Working through the Ann Arbor Area Community Foundation, you have the choice of receiving recognition or remaining anonymous in your giving.

Several efficiencies preserve your charitable assets and allow you to make the impact you desire. The start-up and administration is simple and allows your board to begin issuing grants right away.