Funds FAQ

Below is detailed information on fund availabilities, options and strategies with the KBCF. If you have any questions after going through it, please contact Executive Director Ximena Antunez de Mayolo at .

How can a donor give to The Key Biscayne Community Foundation?

We have nine different kinds of funds: advised, scholarship, designated and agency endowment, field of interest, giving circle, fiscal sponsorship, unrestricted, supporting organizations, and community. Donors can either make gifts to establish these funds while living, or establish one of these funds through a planned giving vehicle (such as a charitable remainder trust) or straight bequest. 

 

·        Advised funds (also known as donor advised funds) are typically established by living donors who wish to be actively involved in philanthropy. Some donors set up advised funds with family members as the donor advisors.  Our donor advisors have the right to recommend gifts from the funds; some of our donor advisors make such recommendations by letter or email several times a month, while others do so once every few years.  Advised fund holders may choose to have their fund set up as either an endowed or a non-endowed fund. Through an endowed fund the principal funds remain untouched as they are invested for long term gain and the donor may advise grants based on the charitable disbursement rate (designated by the Investment Committee annually). Endowed funds ensure the donor that their charitable interests will be served now and in the future. Non-endowed funds allow the donor to make immediate grants utilizing the fund principal.

Because we are a public charity and not a private foundation, federal law does not require us to distribute any set amount in grants each year.   Our public charity status also provides us several other advantages.

We provide a range of services to advised fund donors.  If donors do not yet know which causes they wish to support, we can consult with them to refine their giving priorities.  We can also research prospective grantees and provide a vehicle for anonymous giving.

 

·        Scholarship funds can be established by an individual, a corporation, or a group of people, such as a civic club or trade association.  These funds can supply financial support for students at any level of education, or fellowships for people who wish to further their professional development.  The Foundation can provide a range of services to scholarship funds, including designing the scholarship criteria and application process and assembling a scholarship advisory committee.

 

·        Designated and agency endowment funds benefit a specific agency or agencies.  If a donor wants to set up the fund, it is called a designated fund.  If the agency itself wants to place its endowment with us, it is called an agency endowment fund.  Either way, the fund provides perpetual support for the agency’s operations.  The Foundation also holds the “variance power,” which allows it to redirect funds if, for example, the beneficiary agency goes out of business or ceases to serve its original purpose.  This power protects the original donor’s intentions.

 

·        Field of interest (and community) funds benefit a defined area of charitable activity or a certain group of people.  For example, we have a field of interest fund benefitting youth on the Key. An advisory committee can be established to review applications or these grant funds and applications can be reviewed by our grants committee and board of directors.

 

·        Giving circle funds allow a group of individuals to pool their charitable dollars and collectively determine where these funds will go. Giving circles allow donors to maximize their impact on their community as they often combine charitable grants with volunteer efforts. The Foundation facilitates meetings and workshops for giving circles to help educate members regarding the current needs of their community.

 

·        Fiscal sponsorship funds allow community members and groups to conduct charitable projects under the umbrella of the Foundations 501(c)3 status. The Foundation manages the projects funds and provides back-office support for the project. Projects produced under the fiscal sponsorship umbrella benefit from the Foundation’s nonprofit financial and legal experience.

 

·        Unrestricted funds benefit the Key Biscayne community at large in the areas of the arts, education, health, and social services.  Our Board of Directors award these funds throughout the year.

 

·        Supporting organizations give donors many of the benefits of a private foundation without the administrative burden.  Although there are three types of supporting organizations, we prefer a “Type I,” which allows the supporting organization to have its own board, selected through consultation with, and approved by, The Key Biscayne Community Foundation.

 

Can I establish more than one type of fund at The Key Biscayne Community Foundation?

Absolutely.  A donor can have more than one fund, and funds of multiple types, at The Key Biscayne Community Foundation.  A single fund's character can also change over time, such as a donor advised fund that becomes a field of interest or unrestricted fund when the original donor dies.

 

What is the process for establishing a fund at The Key Biscayne Community Foundation?

Call Ximena Antunez de Mayolo at the Foundation.  We will talk to you about your goals to ensure that we understand your intentions and then will prepare a simple fund agreement for your signature.  When the agreement is ready to be signed, you then transfer to us the assets to open the fund. You may write a check, transfer money or stock by wire, or physically deliver a stock certificate to complete the transaction.  In the case of physically delivered stock or stock certificates, we will also ask you to sign a stock power to facilitate the transfer.  We can also accept gifts of other kinds of assets, such as real estate, but the process takes longer.

 

What kind of assets can be contributed to the Foundation?

The Foundation can accept virtually any kind of asset, subject to its gift acceptance policies.  Typical gifts are cash and low-basis, highly appreciated securities.

 

How is giving to the Foundation more advantageous than setting up a private foundation?

Private foundations may be the right vehicle for some donors.  But many other people find that a community foundation is a better option.  

 

·        Convenience.  Establishing a fund is quick and easy, and can be accomplished in a matter of days if necessary.  Establishing a private foundation takes months, and requires significant expenses in legal costs and filing fees.

 

·        Deductibility.  A community foundation offers donors the most favorable tax treatment, whereas private foundations are far less tax-favored.

 

·        Payout.  As a publicly supported charity, the Foundation is not subject to the 5% minimum distribution rule that applies to private foundations.  This feature permits donors to start “acorn” funds and allow those funds to build over time before making grants.

 

·        Administration.  The Key Biscayne Community Foundation has program and finance advisors, auditors, and lawyers available to provide services. The Foundation includes all funds in its audit and tax return.  A private foundation must secure these services and file its own return.

 

·        Anonymity.  Many donors are surprised to learn that their donations to a private foundation, and all grants their foundation awards, are public information, increasingly available on the Internet.  The Key Biscayne Community Foundation, however, is entitled to shield the donor list in its tax return from public view because the Foundation is a public charity.  And while we do list our grants in both our tax return and annual report, we do not indicate which fund was the source of each grant.

 

In addition, some donors prefer to make all or some of their gifts anonymously, which we can do very easily.  We can also research a charity on the donor’s behalf, which secures the needed information to make a responsible gift while protecting the donor from solicitations from the charity directly.

 

Who manages the Foundation’s operations?

The Foundation operates under a 14-member Board of Directors which consists of a diverse group of Key Biscayne community members. 

 

How much does it cost to use The Key Biscayne Community Foundation?

The Key Biscayne Community Foundation charges an annual administrative fee of 1.5% for endowned funds, 10% for fiscal sponsorship and giving circles, 2.5% for scholarship funds and 2% for all other types of funds.

 

Can donors to the Foundation choose investments for the funds they establish?

Donors may choose among two investment strategies, based on the type of fund established (non-endowed, endowed).  Non-endowed funds are invested in a Money Market Pool with an emphasis on liquidity. Endowed Funds are managed by our Investment Committee and are currently invested in a Vanguard Conservative Growth Fund (50% stocks/30% bonds/20% short term reserves).  Fund earning statements for non-endowed funds are distributed either quarterly or monthly and determined monthly based on average account balance as of the 20^th calendar day of each month. Earning statements for endowed funds are distributed either quarterly or annually and determined based on the quarterly average. In addition to these options, donors who contribute at least $500,000 may request that the funds remain with their existing managers.  These arrangements must be approved by The Key Biscayne Community Foundation’s Investment Committee.

 

How can The Key Biscayne Community Foundation work with private foundations?

For newly created private foundations, we can consult with the foundation on a negotiated fee basis to help it develop grant guidelines and processes, develop investment and spending policies, and evaluate grant applicants, among other services.

If a private foundation is nearing a distribution deadline, it may be compelled to award grants to satisfy that deadline, even if it has not fully evaluated the beneficiary charity or the project is not quite ready to proceed.  Instead of making such a hasty grant, the private foundation can make a grant to The Key Biscayne Community Foundation to establish an advised fund.  Because we are a publicly supported charity, the grant to The Key Biscayne Community Foundation satisfies the time-sensitive distribution requirement.  The private foundation can then recommend a grant from the advised fund when the private foundation and the ultimate beneficiary are ready.

If a person or family has a private foundation but no longer wants the responsibility of administering it, the private foundation can terminate and transfer its assets to The Key Biscayne Community Foundation.  Those assets can then become an advised fund, part of the unrestricted fund, a field of interest fund reflecting the private foundation’s priorities, or any other type of fund desired by the private foundation’s trustees.

 

Whom should I contact if I am interested in discussing a fund at The Key Biscayne Community Foundation?

 Please contact Ximena Antunez de Mayolo, Executive Director at 305.361.2770 or .