Creating a Brandywine Workshop Fund at The Philadelphia Foundation

The Philadelphia Foundation serves a variety of donors who share a common concern – the welfare of the people and communities of Southeastern Pennsylvania. Individuals, families, businesses and even other foundations create permanent charitable funds that help our five county regions meet the challenges of changing times. Funds of all sizes can retain donors’ individual names and charitable purposes, while benefiting from the professional administration of a major institution.

 

Benefits of a Brandywine Workshop Fund at The Philadelphia Foundation

Permanence: as living memorials, funds at The Philadelphia Foundation carry out their donors’ – charitable interests in perpetuity. Should a fund’s purpose become outdated by time, it will be redirected to similar purposes.

Tax Advantages: Because The Philadelphia Foundation is a public charity rather than a private foundation; all donations earn the maximum available tax deduction for charitable contributions. Our funds also avoid the excise taxes and many other restrictions placed on private foundations.

Convenience: Most funds can be created in one brief meeting. Afterward, the donor retains the satisfaction of giving while the Foundation takes care of all the paperwork. In contrast, private foundations can take months to establish and require costly administrative support.

Economics of Scale: By commingling our funds for administration and investment purposes, we incur lower management costs than does a separate private foundation. So more of our donors’ money goes to charity, rather than to overhead.

Charitable Impact: We specialize in understanding the needs and issues facing regional communities and nonprofit organizations of our five-county region. That way, we can advise donors, if they so desire, and target grants where they will do the most good.

 

How to Start a Fund Benefiting Brandywine

  • Decide When to Give: Donors may create their funds during life, by will, or through a trust arrangement that benefits their families as well as charity. Tax deductions are earned at the time of gift, while grant making continues into the future.

  • Decide What to Give: Almost any kind of asset can be used to start a fund, including cash, publicly traded securities, closely held stock, interests in limited partnerships, and – with prior approval by the Board of Managers – real estate and tangible personal property. Gifts of long-term appreciated property earn tax deductions for their full market value. You can also create a new fund or add to an existing one with a charitable remainder trust or through participation in the Foundation’s pooled income fund.

  • Choose the Name of Your Fund: Most funds are named for the donor or the donor’s family, or as a memorial to someone special. Every grant form the fund will carry this name. Donors who prefer anonymity may choose names that reflect their funds’ charitable purposes.
  • Choose a Type of Fund: Donors may choose from six types of funds that reflect different charitable interests:
    1. Unrestricted Funds. These general-purpose funds give the Foundation the greatest flexibility to meet the region’s changing and emerging needs over the years.
    2. Field-of-Interest Funds. Donors may prefer to specify a broad area of charitable interest, such as arts and culture or education, or a particular community or neighborhood within the five-county region to benefit from grants from their funds.
    3. Donor-Advised Funds. Donors who wish to remain actively involved with their philanthropy may make grant recommendations of the Board of Managers, which must retain finale responsibility for all distributions made by the Foundation.
    4. Scholarship Funds. Donors may endow scholarship awards to benefit a certain type of student or a specific institution or to encourage study of a particular subject.
    5. Designated Funds. Donors may choose one or more specific organizations to share the income from their funds.
    6. Organization Endowment Funds. Nonprofit organizations may create permanent endowment funds at the Foundation. The Foundation handles all administrative and investment responsibilities, freeing the organization to pursue its charitable mission.
  • Choose a Financial Manager: You may select the Philadelphia Foundation, Inc. or one of The Foundation’s trustee banks as trust and investment manager for your fund. Both The Philadelphia Foundation, Inc. and the trustee banks have produced outstanding investment results.

Under the stewardship of our Board of Managers and trustee, banks, Foundation assets are invested in a balanced portfolio that produces a regular income for grant making while maximizing asset growth and security of principal.

 

What does it Cost to Create a Fund?

A minimum contribution of $3,000 can start most types of funds. There are no start-up charges or fees.

 

How Much Money Does a Fund Produce Each Year for Grantmaking?

The Philadelphia Foundation encourages all donors to establish permanent or endowed funds and to adopt the Foundation’s spending policy. The spending policy is designed to allow the funds to be invested on a “total return” basis to maintain and, if possible, increase the purchasing power of the funds, while at the same time providing a relatively steady and predictable level of funding for grantees. The Spending Policy currently in effect provides for the Foundation annually to spend 5% of the average quarterly value of each fund. By adopting the spending policy for your fund, you can be assured that your fund will benefit the community as much as 100 years from now as it does today.

 

Working with the Philadelphia Foundation

Donors are invited to consult the Foundation’s professional staff about community needs and grant making strategies. They may also arrange to involve family members in the work of their funds. Donors may add to their funds at any time, and others may also contribute.

 

Fees

The Foundation charges minimal administrative fees. The current annual fee for endowed funds is one percent of the fund’s market value. Extraordinary expenses for legal, consulting, or program services are charged against the appropriate fund.

 

For Additional Information

Foundation staff welcomes inquiries about creating funds in the Foundation. Prospective donors or their advisors are invited to call the Foundation for additional information, for suggest language for wills, or sample fund agreements for any of the types of funds described above.

Heather Gee
Vice President for Development Services
The Philadelphia Foundation
1234 Market Street, Suite 1900
Philadelphia, PA 19107-3794

Telephone: (215) 563-6417
Fax: (215) 562-6882
E-mail: hgee@philafound.org
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