What is a Qualified Community Foundation?

1. What is a Qualified Community Foundation? • Tax-exempt, independent, publicly supported philanthropic organization • Established and operated as a permanent collection of endowed funds • Long term benefit for a defined geographic region • Addresses the changing needs of the community through grantmaking and community leadership

2. Helpful Definitions • A Qualified Community Foundation: • State of Iowa designation • Meet or exceed national standards as set forth by the Council on Foundations • Submit a 3 ring binder of compliance docs • Successfully complete approval process

3. What is an Affiliate? • Affiliated Community Fund: • A charitable component of a qualified Community Foundation • A vehicle that allows individuals and groups to contribute money towards the betterment of a specific community (or county) • Advisory board of community leaders that encourages donations to the fund and oversees distributions of the earnings in the form of grants

4. Qualified Community Foundation’s Role w/ Affiliate Qualified Community Foundation • Provides administrative support • Manages and invests funds • Provides technical assistance and marketing support • Approves grants • Offers credibility, visibility, planned giving expertise and legal assistance

5. Role of Affiliate w/ Qualified Community Foundation Affiliate Leadership Group – 5 or more • Establishes fund with qualified CF • Promotes philanthropy • Advisory to the fund • Recommends grants • Pays a fee that is a % of the fund to QCF • Does not need to be incorporated or qualified

6. Mission of a Community Foundation Each true CF should aspire, plan and work to attract permanent endowment. Unrestricted permanent endowment ensures that the foundation will always have the resources and flexibility to respond to emerging needs that come with changing times. This give the CF its unique utility to the community, to donors and to charitable service organizations.

7. What is a Permanent Endowment? The State of Iowa definition: • A fund held in a qualifying community foundation to provide benefit to charitable causes in the State of Iowa. • Endowed funds are intended to exist in perpetuity, and to implement an annual spend rate not to exceed 5 percent.

8. HF2302 • This bill provides that, beginning in the year 2005, ½ of 1% of the state’s gambling revenues will be distributed to the 85-90 Iowa counties that do not have gambling entities. These funds will be distributed through QCF. It is anticipated that each county will receive $50-60,000 per year and the amount is expected to grow with gambling revenues over time.

9. Desirable Characteristics of Founders and Board Members • Key factors are the clout, commitment and capability of the community leaders who form and serve on the board of the foundation. • Successful growth of a CF has been most likely when community leaders have committed themselves publicly to the effort and actively sought support for the CF.

10. Factors needed for successful endowment building • Community board willing to engage in person to person solicitation of a select and limited number of high new worth donors. • Strong relationships with professional advisors. • Assurance that foundation will be around to administer gifts and bequests into perpetuity. • A diversified portfolio and engaged investment managers, offering a superior chance to produce a high total return. • Annual income from invested principal to hire staff and do grantmaking.