Anyone Can Be A Philanthropist Using The New
                                                                   

One way to do this is to establish a charitable endowment fund that will distribute earnings or grants to the causes you care about … forever!  In the past, the FMAF required a minimum donation of $25,000 to establish an endowed fund.  In recognition of the 50th anniversary of the establishment of the Foundation in 1960, the Board of the Foundation has authorized an easier path that will enable more individuals and groups to ensure a permanent legacy.

Like the planting of an acorn starts a mighty oak, the new approach is called the Giving Growth Group.  It involves a program that is available to individuals, business or organizations.

The Giving Growth Group helps harness the power of the financial markets to multiply the value of contributions over time.  All a donor has to do is make regular contributions over a period of up to six years (and take the appropriate charitable tax deduction for doing so).  Investing even small amounts regularly will build an endowment that grows dramatically.  The Foundation can even include memorial or tribute contributions that are made to funds as part of the Giving Growth Group process.

During the period a fund is growing, a donor can also participate along with other members of the Giving Growth Group in deciding once a year (usually in April) what charities will benefit from a partial distribution of funds accumulating in the Giving Growth Group accounts during the past calendar year.

When a Giving Growth Group account (also known as a 3G Fund) matures by reaching at least $25,000, it becomes a permanent charitable fund within the Fargo-Moorhead Area Foundation.  At that point regularly scheduled contributions to the 3G Fund can cease (or continue if the donor wishes) and the endowed fund begins making annual grants.

But here’s the best part: it never stops!  Ever year, generation after generation, the causes the donor cares about will receive support from the “acorn” planted today as a 3G Fund.

Building a 3G Fund requires the same kind of planning used for any other investment program.  The funds will need to reach a minimum of $25,000 over a period of 72 months (six years) or less before it can become an endowed grantmaking fund within the Fargo-Moorhead Area Foundation.  Regular contributions, multiplied by good investment, will reach this goal in a surprisingly short period of time.  Until then, all the earnings to an individual 3G Fund account will be designated to that account, and only the Foundation’s modest annual fee will be charged to it.

When setting an endowment goal, donors will need to consider:

     >   The purpose of the fund
     >   The number and amount of grants to be made each year to a nonprofit organization (to
          church, alma mater, local charities, etc.)
     >   How quickly the goal of creating an endowed fund is to be met, and
     >   The donor’s own financial situation.

Deciding on contributions

Donors can invest as little as $350 a month, $1,050 per quarter, or $4,200 per year.  However, at the projected rate of return and fees paid, which are subject to change by the Foundation, it will take up to six years to achieve the required minimum of $25,000 to become a permanent charitable fund within the Foundation.

While a 3G Fund is growing, membership in the Giving Growth Group qualifies the donor to join other participants in deciding what charities will receive a portion of the funds accumulating in the 3G Fund accounts each year.  Each April, an amount equal to 3.5 percent of the value of the 3G Fund accounts will be distributed to nonprofit organizations as identified during a gathering of participants called by the Foundation.

A donor can add additional amounts to a fund at any time, even after it has started making grants.  The more the donor gives, the faster the goal of an endowed fund will be reached and the larger the annual tax deduction will be.

The Fargo-Moorhead Area Foundation will place Giving Growth Group contributions in growth investments administered by professional managers.  Every year, the Foundation will report earnings for a fund in a personal letter, so the donor can watch its growth.  If a 3G Fund does not reach a minimum of $25,000 at the end of six years (or other time period agreed upon), the FMAF Board has the option of either transferring it to the unrestricted endowment fund the Foundation uses to support grants to a wide range of community needs and causes, or allowing it to continue to accumulate to the required $25,000 during a period beyond the normal six years.

Plan Your Charitable Legacy Today

     >   Name your fund.  Name it after yourself, a family member or friend, or the cause it will
          support.
     >   Designate its purpose.  Many donors designate a portion of their fund for one purpose
          and leave the remainder unrestricted.  The choice is yours.  Funds generally serve one
          or more of the following purposes:
               •  An “unrestricted” purpose, allowing the Foundation to use fund proceeds for its
                  grantmaking.
               •  A “field of interest” purpose, which directs grants to particular areas, such as
                  education, children, or the arts, but not specifically to named organizations.
               •  An “advised” purpose, allowing you and/or your children to recommend grants
                  from your fund each year to charitable causes you prefer.
               •  A “designated” purpose, permanently directing grants to a particular charitable
                  agency or group of agencies.

To participate in the Giving Growth Group at the Fargo-Moorhead Area Foundation, fill out our standard Giving Growth Group Fund Agreement or contact the Foundation at 701-234-0756.