Donor Privacy Policy
The Community Foundation of the Texas Hill Country maintains the confidentiality, integrity, and security of personal information pertaining to its current and potential donors’ contact and fund information.
In the course of regular business, the Community Foundation obtains personal information from applications or forms, transactional activity, and other sources with donor consent. All contact information is used for internal purposes only and never published. Please note that contact information is required by the IRS in regard to contributions, but it is not for public inspection. Fund names are sometimes published in the Foundation’s communication material and media, unless a donor chooses not to be listed. The Foundation does not sell, trade, or share its donor list with any individual or organization.
If you have questions about the Community Foundation’s Privacy Policy, please contact us.
Fund Types
We have many fund types available to help meet specific donor objectives. We are happy to provide advice, assistance, and materials to help donors and their advisors understand all of their options.
Donor-Advised
Pictured: Local farm and ranch realtor, Jimmy Reno, and his wife, Carmen, use their donor-advised fund to annually donate to local charitable causes.
Stay actively involved in the grantmaking process.Some donors wish to support multiple organizations and programs throughout the year. Other donors wish to build up a fund balance over multiple years before making charitable distributions. The Community Foundation identifies appropriate nonprofits and programs, ensures their charitable status, and provides grantmaking and administrative support. These funds offer an immediate tax benefit while allowing the donor to make grants over time to their favorite nonprofit organizations. Donor-advised funds are also a cost-effective alternative to creating a private foundation.
Click to view: Sample Donor Advised Fund Agreement
Unrestricted
Unrestricted funds allow donors to ensure their gifts support the most pressing community needs, however they may change over time. The Community Impact Fund (linked) is an unrestricted fund that provides a simple and efficient giving mechanism for donors who want to focus their gifts on the greatest needs of the Hill Country. The Fund annually reviews grant requests and makes awards.
Donors can also make fully tax-deductible, unrestricted gifts to the Community Foundation itself. Such unrestricted contributions support the greatest needs of the Community Foundation. Many donors choose this type of unrestricted giving by naming the Foundation as the beneficiary of a charitable remainder trust. Pictured: Local 4-H programs sponsored by the Community Foundation.
Designated
Designated funds name a specific organization(s) to be supported on an annual basis. Grants from these funds provide a reliable income stream to one or more of a donor’s favorite organizations. If the charity ceases to exist, another charity serving the same needs will benefit from the endowment.
The Foundation applies its annual spending rate – ranging from 3% to 5% in a given year – to the fund balance which determines the grant amount to be distributed. A donor may also select a specific dollar amount to be annually distributed.
Donors may also select a field of interest fund, one in which the Foundation staff select the specific grantees in a given year. For instance, if the field of interest is animal welfare in a certain city, county, or region, the Foundation will assess local organizations, then make grants with available funds. Field of interest funds differ from designated funds because they do not name specific nonprofit organizations, only a general field(s) of interest.
Both designated and field of interest funds are popular giving vehicles for:
- Donating a portion of an Investment Retirement Account’s Required Minimum Distribution.
- Serving as the beneficiary of a charitable remainder trust.
- Making a charitable gift(s), but not wishing to be involved in annual distribution decisions.
The Louise Livingston Fund is a designated fund with five named beneficiaries. The Dietert Center (pictured) in Kerrville receives an annual distribution from the Fund to support essential programs like Meals on Wheels.
Sample Designated Fund Agreement
Sample Designated Fund Bequest Language
Scholarships
A scholarship fund lets donors establish criteria and determine their own degree of involvement while supporting students of any age, background, or education level. The Community Foundation administers scholarship funds for donors, nonprofit organizations, civic clubs, and businesses.
Click to view: Sample Scholarship Fund Agreement
Click to view: Sample Scholarship Fund Language for a Will
Asset Types
The Community Foundation accepts a wide range of asset types, including ones that many commercial brokerage firms are unable to accommodate. Often donors may not even be aware of the options available to them. We specialize in simplifying the process of converting assets into contributions.
Cash
Cash gifts allow donors to claim a current tax deduction and carry forward contributions exceeding annual limits for up to five subsequent tax years.
Real Estate
A gift of commercial, residential, farm, or ranch real estate owned for more than a year entitles the owner to a tax deduction for the property’s full fair market value while allowing the owner to avoid capital gains taxes.
Securities
A popular mode of giving, donating gifts of publicly traded securities and mutual fund shares qualify donors for an immediate charitable deduction of the full fair market value and an exemption from capital gains tax on the appreciation.
Interests
Donations of partial interests from an investment or business partnership permit donors to retain partial ownership of their business interests while also pursuing their charitable passions.
Many donors give mineral interests to the Foundation as well.
Retirement
Donating retirement plan assets assists donors in reducing or eliminating income and estate taxes while also supporting causes important to them. Click here to read more.
Bequests
Bequests enable donors to support the community while retaining complete control over assets during their lifetime through a living trust or will while earning a full charitable deduction on estate taxes.
Sample Bequest Language (Link)
Complex
We specialize in simplifying the process of converting complex assets into charitable contributions. From commercial real estate to partnership interests, we accept a broad range of asset gifts that many commercial brokerage firms do not have the ability or the experience to accommodate.
Open A Fund
A fund is created by fully executing a fund agreement and making an initial gift to the Community Foundation. Please contact us to discuss your goals. Establishing a fund can be quickly and easily done.
Manage Your Fund
Managing your fund is easy in our online portal. Once signed in, you can see recent fund statements, make grant recommendations, donate, and review documents, like fund agreements. Everything you need is right there!
Log in to our Donor Portal here.
First time logging in? Please call our office for support.
Create A Legacy
For decades, we have worked with donors to create a legacy of generosity. An art center’s theatre, a wellness program for seniors, general support for an animal shelter, a new fleet of vans for the recreation center – these gifts and many others have all been funded by legacy donors whose vision and generosity live on.
The easiest way to assist charities with an estate gift is to include a provision in a will. When someone has an up-to-date will that they don’t want to change, a simple codicil can be signed, witnessed, and attached to an existing will.
The Community Foundation offers the following samples of language for wills and bequests. We have dozens of examples to share with you, if nothing below meets your specific goals. The Community Foundation’s EIN is 74-2225369.
Community Foundations vs. Private Foundations
You might wish to create a giving vehicle that allows for long-term involvement with your charitable assets. A Community Foundation fund enables donors to secure maximum tax deductions, include family members, focus grantmaking, and obtain visibility (or anonymity) for their giving. While some donors may find a private foundation meets their needs, establishing a fund with the Community Foundation often proves more attractive and much more cost-effective. Many local families have converted their private foundation to a donor-advised fund at the Community Foundation.
| PRIVATE FOUNDATION | Donor-advised Fund of The Community Foundation | |
|---|---|---|
| LEGAL IDENTITY | Separate nonprofit entity | [Donor’s Choice of Name] Fund of the Community Foundation |
| TAX STATUS | Private foundation | Public charity |
| TAXATION OF INVESTMENT INCOME | 2% annually | None |
| PAYOUT REQUIREMENT | Grants must equal 5% of corpus annually | None |
| DEDUCTIBILITY OF GIFTS | Deductibility: 20% AGI for appreciated property, 30% AGI for cash | Deductibility: 30% AGI for appreciated property, 50% AGI for cash |
| ADMINISTRATION | Detailed annual filing with IRS | All record-keeping and accounting carried out by the Community Foundation |
| GRANTMAKING EXPERTISE | Professional staff, if any (unusual for a small foundation) | The Community Foundation staff review and monitor proposals, transact all distributions. |
| CONTROL | Trustees have complete control of distributions and responsibility for asset management. | Donor-advisor may make grant recommendations. |
| COST | Costs include annual legal and accounting fees, insurance, investment management, office space, staff, and miscellaneous expenses. | No cost to establish. Annual fees range from 1% to 2%, depending on fund type. |
Establishing a fund with the Community Foundation of the Texas Hill Country has many advantages over a private foundation.
Cost
Private Foundation
- A private foundation can be both time-consuming and costly to establish.
- For economic operations, a private foundation needs to have substantial assets. Studies continually show that assets under $25 million are better served in a donor-advised fund, from a cost perspective.
The Community Foundation
- Establishing your own fund with the Community Foundation is inexpensive and easy to set up.
- Only $7,500 is needed to begin a Fund with the Community Foundation.
Tax Filings & Liability
Private Foundation
- A private foundation must prepare its own detailed federal tax return (Form 990PF) with required supporting schedules and must report to the state as well.
- A private foundation is subject to an annual excise tax of up to 2% on net investment, including net capital gains.
The Community Foundation
- All Funds of the Community Foundation are component funds and are included in the Foundation's annual Form 990 to the Internal Revenue Service. This represents a further reduction in expenses.
- The Community Foundation is a tax-exempt entity and all gifts to it are tax-deductible because it is a 501(c)(3) public charity.
Tax Advantages
Private Foundation
Tax treatment is not as favorable:
- Deduction for gifts of cash is limited to 30% of Adjusted Gross Income (AGI).
- For gifts of appreciated property the deduction is limited to 20% of AGI.
- Gifts of publicly traded stock are deductible at their Fair Market Value (FMV).
- Other appreciated property can be deducted on a basis value.
A new private foundation must establish its tax-exempt status, which can take several months to obtain.
The Community Foundation
A donor can enjoy maximum tax advantages:
- Deduction for gifts of cash is limited to 50% of AGI.
- The full market value of appreciated property is deductible from income up to 30% of AGI.
- Gifts of publicly traded stock are deductible at their FMV - no time limitations.
- Other appreciated property can be deducted for the FMV.
The Community Foundation already has a favorable tax-exempt ruling from the IRS, so contributions are immediately deductible.
Operations & Administration
Managing a foundation is an on-going administrative task with annual compliance reporting and expenses.
Private Foundation
- Administration can be costly and time-consuming.
- A private foundation does not qualify for public charity status.
- Complete donor control over the fund's use is permitted.
- A new private foundation must establish and obtain the following:
- A mechanism for receiving and managing gifts of real estate, securities, and cash.
- A means of evaluating requests for grants from nonprofit agencies.
- A system for verifying the tax exempt status of grantees.
- Qualified professional and support staff.
- Office space and equipment.
- Knowledge of the needs of the community.
The Community Foundation
- Administrative costs are shared by all funds and, therefore, kept at a minimum for individual funds.
- The Community Foundation meets the IRS's "public support test," thereby qualifying as a public charity.
- Donor-advised funds are the most flexible funds in the Community Foundation.
- As an established organization, the Community Foundation has the following developed and in place:
- A mechanism for receiving and managing gifts of real estate, securities, and cash.
- A means of evaluating requests for grants from nonprofit agencies.
- A system for verifying the tax-exempt status of grantees.
- Qualified professional and support staff.
- Office space and equipment.
- Knowledge of the needs of the community.
Monitoring and Oversight
There are strict regulations regarding self-dealing between a private foundation and those who manage, control or contribute to it and persons or corporations closely related to them.
Private Foundation
- A private foundation that makes grants to other private foundations or new charitable agencies or awards scholarships that have not received public charity status is subject to federal monitoring and reporting requirements.
The Community Foundation
- The Community Foundation must be able to demonstrate that its money is being used for charitable purposes, but does not need to report such information to the federal government.
Public Disclosure
Private Foundation
- Private foundation's tax return, along with those of its contributors, must be open to public inspection for six months.
The Community Foundation
- Even though the Foundation’s tax returns are published on its website and open to public inspection, all donor funds are anonymous.
Payout Requirements
Private Foundation
- A private foundation must pay annually for charitable purposes a minimum 5% of its net asset value, regardless of earnings.
The Community Foundation
- The Community Foundation does not have minimum payout requirements; therefore, the Community Foundation can be more flexible in accepting gifts such as undeveloped real estate or other assets that produce little or no current income.
Investment
Private Foundation
- A private foundation must research and secure its investment vehicles.
The Community Foundation
- The Community Foundation invests in a balanced portfolio with investment managers it has worked with for many years. The Foundation’s Investment Committee meets on a quarterly basis to oversee its investments and the managers.
Purpose
Private Foundation
- Expensive court proceedings may be required to change the original restricted purpose, if it becomes outdated.
The Community Foundation
- If the named charity or restricted purpose is no longer active or providing a needed service, or if the gift becomes impractical or impossible to fulfill, then the Community Foundation’s Board of Trustees has variance power to select another charitable recipient with a similar purpose.
Give to Donor Funds
The Community Foundation is home to over 200 charitable funds, each created by a donor's philanthropic vision. Of those funds, many accept donations from the public, and they are available here.
Sisterhood For Good
Women's giving circles based in Fredericksburg and Kerrville. Click here to learn more.
Tools & Resources
One of the Foundation's goals is to empower donors. The Foundation provides advice, tools, and resources to help donors learn more about the charitable sector as well as specific nonprofit organizations.
You can also:
- Review nonprofits' tax returns (Form 990) or financials on Guidestar.
- Compare nonprofits or learn more about their internal workings with Charity Navigator.
- Consult the IRS for nonprofit addresses and updated standings using the IRS Charity Database.