What is a Family Fund?
A Family Fund is a versatile tool for individuals and families who want to support the organizations and causes they love. These funds are typically created by one individual or family, and they are the ones who decide where the grants will go. Depending on if the fund is endowed or not, the family may also have some say on other aspects of how the fund works – for example, how long to wait before the first grant is made, the percentages that each organization listed should receive, or when to close the fund.
These types of funds can be extremely customizable – so if you are envisioning a complex, creative or extensive philanthropic plan, we can help!
DAF vs. Endowed vs. Non-Endowed Funds
Read below to see which type may fit your needs.
Donor Advised Funds (DAFs)
A Donor Advised Fund (DAF) is a tax-advantaged vehicle for donating to all the organizations you love. You receive the full tax deduction in the year that the contribution is made to your DAF, and you can take your time in deciding when and to whom you would like to advise grants. A DAF may advise grants for up to two lifetimes, creating a legacy of philanthropy within a family. The investments will grow tax-free for future grants to charitable causes.
Select this if you are interested in simplifying current giving, becoming more strategic about your philanthropy, and growing donations tax free for future use.
Endowed Funds
Endowments are permanent funds created to grant to the same institution(s) or area of work FOREVER. We invest the principal and grant between 3% – 5% annually. Earnings will go up and down with the market, but exceed the grants over the long term, providing consistent and reliable support. Learn more about endowments on our Endowment Page.
Select this if you are interested in permanent support and consistent, continuous granting (although grants may initially be smaller).
Non- Endowed Funds
Non-endowed funds offer more flexibility in the quantity and amount of the grants. They are not required to grant every year and the granting percentage is not constrained to the 3-5% range (like endowments).
Select this if you are interested in a customizable solution with the potential to offer a larger amount of support in a shorter time-frame.
Family Endowments
Why Create a Family Endowment?
A Family Endowment is like any other endowment – the main difference is that it is funded by a single family and the endowment often bears that family’s name. You can select one or multiple institutions as the recipients, create a scholarship, or accept applications to fund programs in a specific area of work.
An endowment provides permanent support for the organizations and/or areas of work that you love. Creating a Family Endowment ensures that the programs you care about receive funding every year – FOREVER.
A Family Endowment can be a meaningful part of a family’s legacy. Often the family’s name is included in the name of the fund so that the grant recipients will always remember your love for their mission – even years and decades after your lifetime.
“The finance committee at Saint Mary School could be having a meeting one hundred years from now, and they will receive substantial support from many different Family Endowments that were created in the past. And it will not only help them then, but it’ll encourage them to get involved and do the same thing,”
– Ray Triplett on why he decided to include Saint Mary School as a beneficiary of his Family Endowment
Click to read the full story about the Triplett Family Endowment
What is an Endowment?
Endowments are permanent funds invested to generate income for a particular area of work, organization, or program FOREVER. The principal of the endowment is never drawn upon; we invest the principal and grant between 3% – 5% annually from only the interest and earnings.
These types of funds are critical to the long-term survival of parishes, schools and other organizations as they provide a permanent and reliable source of income over time. This is how, with your help, we are building FOREVER VALUE for our community.
Learn more about endowments on our Endowment page.
Which Organizations can I Name as Beneficiaries?
A single Family Endowment may grant to more than one organization. The Catholic Community Foundation can grant to Catholic and non-Catholic organizations all across the United States. The Foundation may not grant to organizations that are not 501(c)3 public charities or organizations that do work that goes against Catholic Social Teaching.
If you have questions about whether an organization you are interested in supporting falls into one of these categories, please contact the Foundation.
How Does it Work?
1. An individual or family selects the organization(s) they want to permanently support with grants from the endowment.
2. They fill out the Family Endowment Agreement form make the initial deposit (a fully tax-deductable donation) to open the fund.
3. The Foundation prudently invests the fund following endowment investment guidelines and best practices. The endowment’s balance continues to grow over time even while it generates a grant every year.
4. The Foundation manages the investment, administration of the grants, and communication with grant recipients FOREVER.
Can I Change Beneficiaries?
In a typical endowment, the beneficiary of the fund (the organization or set purpose described in the agreement when the fund is created) cannot change.
However, a Family Endowment offers more flexibility. As long as the family who created the fund is the sole donor to the fund, they have some options for changing the beneficiaries.
What are the Granting Options?
Endowments grant 3-5% of the invested balance once annually.
When will your Family Endowment begin disbursing grants?
TODAY:
Fund your Family Endowment today and the disbursements to the organizations you select can begin during your lifetime.
or
LEGACY:
Name your Family Endowment at the Catholic Community Foundation as a beneficiary of your estate, retirement account, or life insurance policy. Your legacy gift will fund the endowment and granting will begin after your lifetime.
Fees and Minimums
$25,000 = minimum to start a Family Endowment. This allows for the naming of two different beneficiaries. For each additional beneficiary, an additional $12,500 is required. This allows for a grant of at least $500 per beneficiary per year.
0.5% – 2% = range of annual administrative fee, depending on the type of Family Endowment created; paid quarterly
Family Endowment Ideas
Utilizing Retirement Accounts
An endowment can be the perfect recipient for unneeded retirement income. Donors may direct their Required Minimum Distribution (RMD) from IRAs and other retirement accounts to an endowment. Donors may NOT direct their RMD to a Donor Advised Fund. Donating your RMD may offer some tax benefits as well – talk to your financial advisor about your specific situation.
Ideas for utilizing retirement assets:
- Direct your RMD to your Family Endowment every year, slowly building up the balance of the fund. Once the fund reaches $25,000, it begins granting to the organizations you named. Continue directing your RMD to the fund so that the fund balance increases every year. The fund will continue growing and granting and the recipients named will receive grants FOREVER.
- Direct your RMD to your Family Endowment during your lifetime, building up the balance. Name the Family Endowment as the beneficiary of your retirement asset. After your lifetime, the remainder of that asset will be deposited into the fund and granting will begin – continuing to support the institutions named FOREVER.
Endowing an Annual Gift
Do you give to your alma mater every year? Your parish? A local homeless shelter? Would you like your financial support of those programs and organizations to continue after your lifetime? A Family Endowment can allow you to do just that! The beneficiaries you name in a Family Endowment will receive annual support FOREVER thanks to you!
Example of endowing an annual gift:
- Say you give $1,000 to your parish every year. If you want them to continue receiving $1,000 every year FOREVER, you can create a $25,000 Family Endowment and name the parish as the beneficiary. Endowments grant about 4% a year, so your annual gift will continue on after your lifetime. And the best part is that endowments grow even as they generate grants, so the support from your endowment will grow as time goes on!
How to Start Your Family Endowment
Follow these simple steps to set up a Family Endowment at the Foundation:
1. Select the organization(s) and/or ministries you would like to support via annual grants from the endowment.
Examples include: your parish, a Catholic school, a Religious order, Catholic Charities, etc.
2. Determine the percentage allotment to each beneficiary (e.g. equal distribution or a specific percentage to each recipient).
3. Complete our Family Endowment Form or contact the Foundation to discuss options for your endowment.
Download the Family Endowment Form to see how to set up a fund and read the Terms and Conditions
Contact the Foundation any time with questions or to have us help you set up your endowment at 408.995.5219 or info@catholiccf.org
Non-Endowed Funds
Why Create a Non-Endowed Family Fund?
Some families would like their gift to be utilized to address immediate needs, but they don’t want to give a large gift in one lump sum. A Non-Endowed Family Fund can have a custom granting timeline and other adaptable aspects. These funds give you more flexibility than a permanently restricted endowment.
Non-endowed funds have more flexibility than endowments in granting. You are not limited to the 3-5% grant range of an endowment. Grants may be much larger and the timing of grants can be customized.
A donor had a vision to enhance the Catholic school experience for low-income students and students in underserved communities by providing services beyond those typically covered by tuition costs. Together with the Diocese of San Jose Department of Catholic Schools, the donor decided that a fund to support counseling and intervention services for students and families would fill an existing need and help students achieve positive outcomes.
How Does it Work?
We will work with you to discuss your vision for the fund. Our staff has years of experience with many types of granting funds, so we can help you make decisions about:
- Beneficiaries (Who will receive grants?)
- Grant Timing (When should granting start? How often should grants be distributed? When should granting end?)
- Granting Percentage/Amount (How much should be granted at any given time?)
- Reporting (What kind of information – if any – should beneficiaries report back after receiving a grant?)
And more!
Which Organizations can I Name as Beneficiaries?
A single fund may grant to more than one organization. The Catholic Community Foundation can grant to Catholic and non-Catholic organizations all across the United States. The Foundation may not grant to organizations that are not 501(c)3 public charities or organizations that do work that goes against Catholic Social Teaching.
If you have questions about whether an organization you are interested in supporting falls into one of these categories, please contact the Foundation.
Can I Change Beneficiaries?
There may be some opportunities to change the beneficiaries after the fund is set up. Typically it is much easier to change beneficiaries if you are the only person who has donated to the fund. The ability to change beneficiaries depends on many factors, so please contact the Foundation and we can discuss what is possible for you!
Fees and Minimums
The minimum to open a non-endowed fund varies based on the complexity of the fund and number of beneficiaries. Contact the Foundation to discuss details if you are interested in opening this kind of fund.