Creating a Fund or Personal Foundation

CICF’s Personal Foundations allow you to take a more active role in how your charitable gifts are invested in the community.

Below are some frequently asked questions about Personal Foundations:

Who plays what roles in Personal Foundations?

The person who establishes the Foundation is the donor. The donor designates a Foundation advisor in the Foundation agreement as the only person who can suggest disbursements from the Foundation in the form of grants. The donor may also serve as the Foundation advisor, or may designate other living persons – business associates, friends, or relatives – to act as Foundation advisors to make grant recommendations. It is recommended that a single person be designated to submit a Grant Suggestion Form to CICF if more than one person is listed as the Foundation advisor. Foundations having a substantial balance may designate a successor advisor to the Foundation who can pass the advising role to the next generation.

How do I make a recommendation for a grant from my Foundation?

Recommendations for grants are made in writing using a Grant Suggestion Form provided by CICF, or by using a secure online service that gives donors access via the Internet to the details of their Foundation through CICF Connect. Once Foundation advisors make recommendations, CICF staff carefully reviews the recommendations to make sure each organization is qualified, and also completes all other due diligence required or requested. If it cannot be determined that the organization is an IRS designated public charity, the Board of Directors has the right to reject the recommendation.

What types of charitable organizations can I support with a Personal Foundation?

Grants can be made to any U.S. entity recognized by the Internal Revenue Service (IRS) as a tax exempt, publicly-supported 501(c)(3) charitable organization, place of worship, public and private school, and governmental agency.

What can my Foundation grants support/fund?

Your Foundation may support most programs or activities of a qualified charitable organization; grants must be a minimum of $250. Multi-year grants can be made in consultation with your CICF staff representative. CICF staff will gladly help you direct your giving to meet the needs of the organization or cause you want to support, and also to the charitable giving goals you have established.

Is my Foundation prohibited from making any type of grant?

The IRS prohibits Personal Foundation grants that pay membership dues; fulfill personal pledges; discharge or satisfy legally enforceable obligations; or for any purpose from which you will receive some benefit. Other ineligible grants include ticket purchases to fundraising dinners, greens fees for charity golf tournaments, grants to individuals, or grants to political campaigns.

Can my Foundation recommend grants outside central Indiana?

Yes. Though CICF’s objective is to support and enhance our local community, we understand that you may have interests outside of this geographic area and that there are many institutions with national and international importance you may wish to support. For international grantmaking, we need to make grants to publicly-supported U.S. 501(c)(3) not-for-profit organizations serving charitable needs overseas. CICF will identify the best manner of granting to those organizations so you can give effectively – anywhere in the world.

What about pledges?

The IRS requires that grants from Personal Foundations cannot fulfill pledges or pre-existing obligations. The word “pledge” implies a legal obligation on the part of CICF to satisfy a debt or that a contribution to CICF was restricted for another charity. Foundation representatives may suggest multiple-year grants, allowing for an annual progress report from the charity, to ensure it still complies with the grant’s intent.

How can I check the balance of my Personal Foundation?

Foundation statements, which include the balance, grant history and contribution history, are mailed to all Foundation advisors each February and August. You will also have access to this information by using CICF Connect, a secure online service that gives donors access to the details of their fund via the Internet.

Can my family or I receive benefits?

No. The IRS prohibits fund representatives, their families, and the Foundation’s donors from receiving goods or services from a charity in return for a grant. Personal Foundations cannot pay for travel expenses, membership dues, ticket purchases to a fundraising dinner, greens fees for a charity golf tournament, or grants to individuals. Grant distributions from a Personal Foundation are NOT tax deductible to a donor or fund representative. A donor can claim only donations into a Personal Foundation for a tax deduction. (Consult your tax advisor regarding the amount available to deduct.)

How are my grants acknowledged?

Only you or other Foundation representatives (designated by you at the Foundation’s inception) suggest distributions from the Foundation. A letter accompanies all grant checks from your Foundation. The letter specifically states the Foundation from which the grant is made (unless you prefer it to be anonymous) and the purpose of the grant. A copy of each grant letter is sent to you. For grants of $10,000 or more, we can ask the recipient to complete an evaluation form or provide any other reporting about how the grant was used at your request.

Are my grant recommendations final?

BBy IRS regulations, the CICF Board of Directors retains the legal responsibility for the distribution of all CICF funds. This is very routine and done four times per year (usually retroactively) at CICF Board Meetings as part of a consent agenda. The only time a grant would not be approved by the CICF Board would be if the grant is illegal, would jeopardize CICF’s not-for-profit status, or is being made for non-charitable purposes or to an unqualified organization. However, these situations are prevented from happening due to the due diligence conducted by CICF’s professional staff prior to the Board of Director’s review and approval.