Helping Charities Manage Their Endowments
Schools, synagogues, camps and other nonprofit organizations can establish their own Designated Fund at the Jewish Communal Fund (JCF). This is a simple and cost-efficient way to manage your organization’s endowment, or a professional solution for those that have set aside assets to help build institutional stability. JCF handles all of the administrative details and provides access to our robust investment platform. A JCF Designated Fund can play an important role in creating long-term sustainability for your organization without the burden of the day-to-day management.
What is a Designated Fund?
A Designated Fund can be an endowment alternative that operates for the sole benefit of a 501(c)(3) public charity. All assets in the designated fund are granted to the charitable organization.
How Does it Work?
The organization designates a minimum of two people, one of whom must be a trustee, who have the privilege of choosing from JCF’s robust investment platform to recommend an investment allocation for the fund’s charitable assets. These representatives gain access to JCF’s easy to use online platform and can make grant recommendations back to their institution at any time. JCF handles all of the administrative work, including receiving and tracking contributions into the fund and mailing out tax receipt letters.
Case Study #1
A Jewish day school was exploring ways to invest and grow its endowment of $1 million. The school didn’t have a Chief Investment Officer and its Investment Committee wanted to take advantage of JCF’s diverse investment options and administrative expertise. By opening a Designated Fund, representatives from the school’s Investment Committee are able to consult on a quarterly basis with JCF’s independent investment advisor to select an asset allocation that meets the organization’s needs. They also benefit from the lower institutional rate investment fees that JCF offers.
Benefits of a Designated Fund:
- Flexible: You can choose an asset allocation and make changes up to four times per year, and you have flexibility regarding the amount and timing of grant distributions to your organization.
- Strategic: Both income and principal are available for grant distribution, so you can decide how much money is granted out of the fund each year.
- Smart: You have access to JCF’s high quality investment platform and benefit from JCF’s institutional rates.
- Simple: JCF has the systems in place to quickly and easily accept gifts of appreciated stock and complex assets such as real property.
Case Study #2
A 400-member synagogue found it costly and complex to accept donations in the form of appreciated securities. They therefore established a Designated Fund to assist them in receiving and tracking contributions. JCF mails out the tax receipt letters to contributors to the synagogue‘s Designated Fund, which saves the synagogue time and money. Individuals appointed by the synagogue make grants back to the synagogue from the Designated Fund when needed. In the meantime, the assets are invested and have increased in value.
- Rely on the long and deep expertise of JCF, which has been facilitating charitable giving since 1972.
- JCF’s economies of scale provide your organization with the benefits of a diverse investment portfolio with a number of investment vehicles typically only available to very large funds.
- JCF’s investment consultant is available on a quarterly basis to review the asset allocation of the fund.
Administrative fees are deducted monthly from your fund based on the average daily balance of your fund. The annual fee schedule operates as follows:
- Balances under $5 million = 0.40% (40 basis points)
Steps to Open a JCF Designated Fund:
- Complete the online Designated Fund Application.
- Provide a Corporate Resolution signed by two officers stating that the board has agreed to a) the establishment of the JCF fund, and b) the appointment of representatives empowered to act on behalf of the organization (see Interested Parties—section C).
- Transfer Assets—see Ways to Contribute.
- Select Asset Allocation: Review the Investment Performance Chart and complete the Fund Investment Recommendation Form.
Please note that Designated Funds cannot receive assets that are raised from an event where tickets are sold or contributors receive a significant material benefit in exchange for their contribution. Outright solicitations that are not tied to benefits and where no quid pro quo exists are permissible.