PROFESSIONAL ADVISORS—FAQ

What is a Community Foundation?

Community foundations are public charities created by a collaboration of local citizens with a common purpose—to improve the quality of life in their region. These unique tax-exempt nonprofits enable individuals, families, businesses and other nonprofit organizations to establish permanent charitable funds to connect to the causes they care about, as well as to meet current and future community needs. Overseen by a volunteer board of community leaders and run by professionals who are experts in local philanthropy, the community foundation invests and manages these charitable funds.

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How are you different from the commercial gift funds?

We offer a variety of charitable funds and will help you find the right one to meet the unique giving needs of your client. In addition, personalized service, philanthropic expertise and local knowledge set us apart. We are experts on local philanthropy and can assist you and your clients in making strategic decisions about how to make the most impact for good.

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What is the advantage of a community foundation over a private foundation?

Establishing a charitable fund at the Community Foundation is much easier and less expensive than forming a private foundation and ensures far greater privacy. In addition, the ongoing administration of a private foundation can be quite costly. At the Community Foundation, we handle all of the administrative work for a low community support fee. Private foundations are also subject to certain rules regarding the percentage of assets they must grant each year, as well as extensive disclosure of information on the IRS Form 990. With a charitable fund at the Community Foundation, your client will have more options for flexibility in their giving, as all funds at the Community Foundation, including grantmaking activities and fund balances, are reported in the aggregate on a consolidated IRS Form 990. This ensures that your client’s giving information is kept private.

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How do I help my client get started?

Contact one of our experienced staff members. We will help you determine which charitable fund type is right for your client. We can also discuss options for planned giving, enabling your client to have a positive impact now and in the future.

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How will the assets of the charitable fund be invested?

Your client has several investment options. Assets managed by the Community Foundation may be either held in cash and cash equivalents or invested in the investment pool. The investment pool contains a diversified mix of assets with a focus on steady growth over time, with consideration for the preservation of capital for our permanently endowed funds. Our investment pool is managed by an external investment manager, Fund Evaluation Group, LLC. FEG is a leader in investment management for the nonprofit sector. We also have a seasoned Investment Committee that oversees our investment management process and overall investment strategy. Clients may also elect to keep their personal investment advisor to manage the assets of the fund, regardless of fund size.  All investment managers must adhere to the Community Foundation’s Investment Policy.

Download our Investment Policy

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What are the Community Foundation’s fees?

Most of our charitable funds are charged a low community support fee of 1%. Unlike a commercial gift fund, your client will have peace of mind knowing that the community support fee is dedicated to supporting the continued work of the Community Foundation, to improve the quality of life in our region. For a detailed fee schedule, check out our Resources.

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Will I have to pay a fee to work with you?

No. It’s our pleasure to work with professional advisors free of charge. We want the opportunity to partner with you to help your clients achieve their philanthropic goals. We will be happy to discuss the best giving solution for your clients at no charge.

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How can the Community Foundation fit into my clients’ estate plans?

We will work with you and your clients to determine the best type of planned gift that will help them achieve both their financial and philanthropic goals. For more information about the types of planned giving available to your clients, see Planned Giving. If you don’t see a particular solution that you’re looking for, contact our staff and we’ll be happy to work with you to meet the individual needs of your client.

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Can my clients’ families be involved in their charitable giving through the Foundation?

At the Community Foundation, we encourage leaving a legacy of philanthropy for the next generation. We will help your client engage their families in their charitable giving. We are proud to have many families of philanthropists who continue to have a positive impact on the community year after year through their charitable funds at the Community Foundation.

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Do you provide services to private organizations?

We offer many different services to private organizations, from grant administration to due diligence and consulting services. We help to alleviate the administrative burden of running a private foundation, while also providing opportunities for philanthropic partnership.

Services we offer to private foundations

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Can you set up a supporting organization?

Yes. Supporting organizations of the Community Foundation act independently and have a separate charitable status, but receive the benefits of being part of a well-established organization. Through its close connection to the Community Foundation, a supporting organization is also considered a public charity. It can maintain its own board of directors, bylaws, investment policies and grant priorities, while the Community Foundation provides administrative and technical support, administers grantmaking and financial reporting, and supports good board governance.

Information on supporting organizations

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If you have a question that we don’t answer here, please contact us.

499 East High Street,  Suite 112,  Lexington, KY 40507

Email Us: info@bgcf.org  /  Call Us: 859.225.3343

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