Frequently Asked Questions

What is a Community Foundation?
The Fayetteville Community Foundation (FCF) is one of nearly 700 community foundations across the country and around the world. They are set up by individuals, corporations and families that are dedicated to improving the quality of life in a specific region. FCF is a tax-exempt public charity that allows people to establish permanent endowment funds and non endowed gift funds within the confines of one large foundation, and offers an inexpensive, value-added way to establish a named family fund.
What does a Community Foundation do?
A community foundation is a publicly supported, nonprofit, tax-exempt organization that maintains a diverse grantmaking program in a specific community or region. In its general charitable purpose, a community foundation is much like a private foundation; however its funds are derived from many unrelated donors rather than a single source, as is usually the case with private foundations. A Community Foundation is designed to make giving easy for individual or family donors with the best combination of tax savings and philanthropic choices for donors.
What "community" does it cover? Who do you serve?
The Community Foundation generally serves Fayetteville and surrounding communities. Some donors, however, have interests elsewhere which they fund through The Fayetteville Community Foundation.
Where do you get the money you donate?
Donors to community foundations range from people of relatively modest means to those with large financial resources. By establishing a fund or donating to an existing fund within the community foundation, donors can contribute their gifts of cash and appreciated securities toward a permanently named endowment or an advised gift fund. Many donors are interested in planned giving and have FCF in their estate plans or other planned gifts.
Why be a donor?
FCF donors are people with a strong sense of community and personal commitment to contributing to the communities in which they live. Most donors want to support worthwhile causes in our area, and FCF, which offers considerable expertise and familiarity with the region, can help them find the best way to commit their funds. Other donors appreciate the speed, flexibility, and ease of using The Fayetteville Community Foundation. Because the legal apparatus is already in place, existing forms are available so that a fund can be established, including obtaining all applicable tax advantages, in a very short time.
Who governs The Community Foundation?
A volunteer governing board of directors comprised of individuals who are representative of Fayetteville and surrounding communities.
What do you fund?
The Fayetteville Community Foundation has awarded nearly $700,000 and built a base of approximately $1.5 million in assets since 2004. Click here for a list of grant recipients.
How do people apply for grants?
When grant funds are available, the FCF posts the information under the grants section of this website and sends announcements to local media. The Foundation has a Grantmaking Committee, which considers the proposals.
How is The Community Foundation different from the United Way?
Both are important resources to the community and each complements the other. Some have described the differences by suggesting the United Way is more like the community's check book, raising and distributing money annually, while a community foundation is more like a savings account, making grants from long-term funds in perpetuity. An additional difference is The Fayetteville Community Foundation's scope of funding is broader than the United Way's focus on health and human services.
What are the financial benefits and tax advantages of gifting through The Community Foundation?
The Community Foundation's approach offers a number of important financial benefits to donors. The Community Foundation manages a number of funds; and therefore, administrative costs and service fees for any one fund are minimized - meaning less overhead cost to a donor's fund. FCF has a number of different types of funds to accommodate donors who prefer the long-term strategy of endowments, as well as those who want to give more actively each year. Donors can choose to establish one of these funds, which allow donors to recommend grants, or can choose to contribute to an existing fund.
I always thought foundations were for rich people. I am not rich. Why should I think about giving a small amount through The Community Foundation?
Community foundations offer a variety of options for making donations. By combining your resources with those of others who share your interests, you can maximize the impact of modest contributions with minimal administrative costs.
How do I set up a fund?
The first step is to decide between a permanent endowment fund and a non endowed fund. The endowment fund is invested using a long-term strategy. Working with Foundation staff, donors make recommendations for grant distributions based on a percentage of the assets in the fund. An endowed fund is the right option for those who are striving for a permanent legacy and a permanent way to contribute to the community.
A non endowed fund comes with all the same staff and administrative services as an endowment fund, but is set up so that the fund may be spent down to zero and then rebuilt. This option appeals to donors who like making more frequent grants.
The Foundation has sample fund agreements available on this site or by contacting the Foundation. We encourage prospective donors to review them with their own professional advisors. The donor may wish to establish the fund to help meet a variety of needs within the community or may specify a purpose or area of concern for which income from the fund is best used. Donors may also name the fund that they endow for themselves, spouses, a family member, a company, or a valued friend. Funds may also be anonymous.
How can I give to The Community Foundation?
Some people prefer the simplicity of cash gifts. There are, however, many other ways to give, including securities and real estate. Gifts to The Community Foundation may be made at a relatively low cost by giving real estate or securities that have appreciated in value. Were the donor to sell the property, a capital gains tax would be levied if the asset had been held longer than 1 year, whereas a gift to FCF not only incurs no such tax, but may entitle the donor to a charitable income tax deduction for the full value.
While most people give to charity throughout their lifetime, only 6% include a gift for charity in their estate plans. By proactively planning, you may be able to make a much more substantial gift than previously imagined and leave a legacy that stretches long into the future. Whether it's supporting safe places to play for kids, preserving our streams and wildlife, or encouraging artists to create beauty in our world, the gift you plan today will ensure the exceptional quality of life in our region continues for generations to come. For more information, see our Planned Giving section or contact FCF at 479.444.6880 or becky@faycf.org.
Explain the difference between FCF and a private family foundation. Does this have importance for my taxes?
Often, people establish a private family foundation because they don't know that in most cases, working through a community foundation offers an easier alternative. In addition to tax benefits, setting up a fund through FCF has an extremely short turn-around time. Additionally, the staff of the foundation becomes available to help with grants (including facilitating work with families), screen applications and take care of auditing and financial reporting requirements. Many community foundation donors are also pleased by the fact that community foundations have none of the annual payout requirements of a family foundation. Community foundations combine the tax advantages of a public charity with the lasting quality of a private foundation. Gifts of cash to a community foundation are deductible up to 50% of adjusted gross income versus 30% for a private foundation. Gifts of appreciated long-term capital gain property can be credited for 30% versus 20% for a private foundation. There is no excise tax on community foundations as there can be on private foundations.
Why use a community foundation when one can just set up a private foundation?
The IRS regulates private foundations more strictly than community foundations. Private foundations are subject to an annual 2 percent excise tax on investment income and must pay out 5% of their assets' market value every year. Private foundations can be costly and time consuming to set up and to administer and provide for financial auditing and record keeping. Tax deductions for gifts to private foundations are significantly more limited than deductions to public charities, like the community foundation. Many people find that setting up a named donor-advised fund with the Foundation meets their charitable needs just as well as a private foundation would. Setting up named fund within the community foundation is usually more cost effective for the donor as well. The community foundation takes care of all of the financial record keeping and auditing and tax obligations required, freeing the donor to focus on enjoying his or her charitable giving. Please click here to see the FCF vs. Private Foundation Comparison Chart for a more information or contact FCF at 479.444.6880 or becky@faycf.org.
How can FCF assist existing private foundations?
1) Assist with Required Payout. On occasion, the trustees of a private foundation have had difficulty deciding on a sufficient number of grants to meet the annual five percent payout requirement. A solution is to create a fund at the Fayetteville Community Foundation, named for the private foundation, and to contribute all or part of the current year’s income to the fund. The private foundation’s contribution to FCF is a “qualifying distribution” that counts toward the payout requirement. You can take your time and deliberate on the grants to be recommended from the fund and gain the added benefit of our philanthropic services.
2) Relieve Administrative Burden. Families, individuals and others who are responsible for managing private foundations often find themselves burdened by the administrative requirements and/or concerned that they are not doing justice to the foundation’s charitable purposes. And with private foundations increasingly subject to regulatory scrutiny and onerous reporting requirements, private foundations are weighing the costs of continuing to conduct their work as they have over the years against looking for ways to minimize their costs and maximize their impact. Private Foundations are permitted to terminate and transfer their assets to a public charity. The Fayetteville Community Foundation is a public charity. By transferring a private foundation to FCF, you can be assured not only that thoughtful grantmaking will continue in the name of the foundation for generations to come; but also significant savings and efficiencies will result from an affiliation with a public charity that is favored by the tax laws. For more information, read about How the Fayetteville Community Foundation can help private foundations or contact FCF at 479.444.6880 or becky@faycf.org.
How are the Foundation funds invested and managed?
FCF pools all permanent funds in order to capitalize on the additional buying power of a larger fund and to decrease financial administration. All assets are professionally managed according to FCF's Investment Policy. FCF invests funds with skilled financial managers who have proven performance records and who meet FCF's Investment Policy guidelines. Our average rate of return on investment since inception is 8%. For 2007, our rate of return was 7.3%. All funds benefits from being pooled and invested with FCF's assets including-lower management fees and minimized investment risks.
The Fayetteville Community Foundation adheres to the highest standards of organizational behavior, transparency and accountability. The Finance Committee and the Board of Directors have fiduciary responsibility for investment and financial oversight. Investment guidelines, a copy of the certified financial audit and copies of the most recent IRS Form 990 are available upon request. Please contact the FCF office at 479.444.6880 for more information.
What services do I receive as a donor and is there a fee for this?
The Community Foundation provides all IRS reporting, accounting and accountability. The FCF Grantmaking Committee does extensive grant review and and their recommendations and evaluations are always available to donors. The Foundation assures that all grant and scholarship recipients meet the tests to assure tax-deductible status. When appropriate, FCF can help donors solicit proposals to fund certain categories of interest to the donor. FCF can also keep donors apprised of special community needs. We can also help donors publicize their funds or, conversely, act as a community liaison to provide anonymity for donors. Click here for a full schedule of fees.
Can I give anonymously?
Yes.
How will funds be invested? Can a donor influence or tell you how and with whom to invest his/her funds?
Investment guidelines have been established the Board of Directors. Endowed funds are invested in a diversified portfolio to mitigate risk and provide long-term growth of capital. Donors making a significant gift of $1,000,000 or more receive the option of recommending a money manager of their choosing.
How do I contact you?
You can reach Becky Brink, FCF President & CEO, at 479.444.6880 or becky@faycf.org.

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