How Charitable Funds Work

What kind of assets can be donated to the Foundation?
Anything that is owned outright and that can be easily converted to charitable purposes. That includes most securities, property, bonds, retirement plan assets, and even privately held stock.

There are also ways to donate assets, earn immediate tax deductions for the gift, but retain income or use of the assets for life. 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.

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

How much are the administrative and investment fees?
Total fees are about 1.5% of asset value. That varies slightly based on the investment pool the donor selects for their fund.

What are the investment pools?
The general fund is invested with Northern Trust. Donors who set up their own funds can choose from the Foundation's corporate pool, which is managed directly by the Foundation, or from pools invested through one of four trustee banks: US Bank, Bank One, M&I or Northern Trust. All investment pools are a diversified mix of 65 percent securities, 25 percent fixed income investments and 10 percent alternative investments. Donors who set up funds with balances in excess of $200,000 can also choose from a "Donor Choice" pool that allows them to allocate more aggressively or conservatively than the Foundation's asset allocation.

If I set up an advised fund, who can recommend grants from it?
Family members or others you designate. Every fund can have two "generations" of advisors, so you can recommend grants throughout your life and your children can continue to make grants in the family's name after your death.

What kind of help do I get with an advised fund?
We will verify that your grant recommendations meet legal requirements for charitable giving, write the checks and send them to the organizations in your name. We will provide regular statements showing your fund's investment and grantmaking activity. We will provide you with updates on local charitable activities through our newsletter, and we will help you answer any questions you may have about organizations and gifts you are considering. If you prefer to conduct your giving anonymously, we can ensure that your identity is shielded.

Can people who set up advised funds support projects outside the area? Sure. People support their alma maters, national charitable causes and other charities throughout the region through their funds. All we ask is that, over time, about half or more of its grants benefit Oconomowoc people. That's what we're here for.