The Oconomowoc Area Foundation

What's the Oconomowoc Area Foundation?
It's a way for individuals, families and groups to help the Oconomowoc area community today and for many generations to come. The Oconomowoc Area Foundation's competitive grant making process awards grants from its unrestricted fund to non-profit agencies within the Oconomowoc Area School District communities and throughout the Lake Country area to help carry out community service projects. All projects will address one or more of the Foundation's priority areas: caring for children, developing youth, helping those in need, preserving the environment and enriching the community economically and culturally.

How does it work?
We invest the gifts people donate to us and use the proceeds to support the causes they specify. People can use the Oconomowoc Area Foundation to help the community in three ways.

First, people can contribute to an unrestricted fund that is permanently dedicated to local needs. The Foundation chooses the grant recipients from this fund.
Second, donors can also set up Donor Advised Funds that make grants to causes they recommend periodically anywhere in the United States or the world.
Third, donors can create a Donor Designated Fund that supports the causes or concerns that matter most to them primarily within the Oconomowoc Area Foundations boundaries.
Finally, there are also ways to donate assets, retain income or use of the assets for life and earn immediate tax deductions for the gift. Such strategies in which you "donate the tree, but keep the fruit" are especially useful for people who want to improve income from assets that have appreciated without paying capital gains taxes.

Who decides where the money goes?
For the unrestricted fund, a board made up of Oconomowoc community leaders chooses grant recipients. For advised and designated funds, their donors specify how grants from their funds are to be used. The Foundation’s job is to make sure their wishes are carried out.

How did it start?
In 1989, Hilbert Scherffius left his estate to the Greater Milwaukee Foundation and directed that they use it to support projects in Oconomowoc. The Foundation pulled together a group of local people to decide how to use these funds most effectively. We saw what an effective way this way to help the community, and we wanted to make this opportunity available for more people. So we started the Foundation as a part of the Greater Milwaukee Foundation.

Why do people support the Foundation?
They want to give something back to the Oconomowoc community. It's very satisfying to know that your gift not only helps today, but will still be helping 25, 50 or even 100 years from now. It's also a way to establish a family philanthropy, or memorialize someone you care about. And it provides great tax advantages in most situations.

Why do we need a foundation like this?
For the same reasons that families and businesses need investments and reserves. A foundation ensures that our civic pockets are never empty when opportunities arise or needs suddenly appear. It also provides an easy, effective way to keep assets here working for the community instead of using them to pay estate and other taxes. For donors who want to leave a legacy and give something back to the community, that's a valuable service.

Why are you part of the Greater Milwaukee Foundation?
Because of their size, expertise and experience. As part of the Greater Milwaukee Foundation, we benefit from professional staff to evaluate proposals and monitor grants, donor services staff who can make philanthropy easy and enjoyable for donors, and asset management to keep our assets strong. The Greater Milwaukee Foundation is the oldest and largest charitable partner in the state. With a local board, we can provide the grantmaking insight and judgment. They provide the administrative and financial expertise.

Does this take away resources from other local charities?
It adds to them. A gift to the Foundation is a different kind of gift. Most gifts to charitable organizations are expended quickly. The idea of the Oconomowoc Area Foundation is to conserve the assets and apply them year after year. The difference between typical charitable gifts and the Foundation is the difference between giving someone an apple and planting an apple tree that provides apples annually to generation after generation.

How much does it take to start a fund?
Gifts to the unrestricted fund can be of any size. Advised and designated funds require a minimum of $25,000.

How much is taken from each fund annually for grants?
Normally, about 5 percent. That helps keep the income and the outflow for each fund balanced over the long term so that they are never exhausted. Some advised funds include provisions allowing their donors to spend as much as they want each year, provided they maintain a minimum fund balance. That's attractive to donors who foresee future additions to their fund, or who have a big increase in assets and want immediate tax deductions but also the ability to spread their giving over multiple years.

How much are the administrative and investment fees?
Administrative fees start at 1 percent and decline as the asset balance of the fund grows. Investment fees vary by pool but the average effective rate is at 0.48%.