What is the Catholic Community Foundation of San Diego?

The Catholic Community Foundation of San Diego is a 501(c)(3) non-profit, independent corporation established in 2015 to assist individuals and organizations in providing lasting financial support to the Catholic religious, educational and charitable organizations of San Diego and Imperial counties in California for generations to come..

What is a community foundation?

A community foundation is a tax-exempt, independent, publicly supported, philanthropic organization established and operated as a permanent collection of endowed funds for the long-term benefit of a defined geographic area.

Who runs a community foundation?

A community foundation has an independent governing body representing the broad interests of the community with members of the board serving limited terms. The board is responsible for seeing that a reasonable rate of return is achieved on all funds entrusted to the foundation.  The Board of Trustees has the responsibility for hiring an Executive Director who provides direction, planning and manages the day-to-day operations of the foundation.

How does a community foundation get its funds?

A community foundation actively seeks contributions of permanent endowment from a wide range of donors who are generally residents of the area and provides assistance to those donors in fulfilling their philanthropic interests.

Are contributions to the Catholic Foundation  tax deductible?

Yes, to the extent allowable under IRS regulations. The Catholic Foundation is classified as a 501(c)(3) tax exempt organization. Contact your tax advisor or accountant regarding your particular tax benefit circumstances.

What is an endowment?

An endowment is a pool of charitable capital that is permanently invested. It is a fund that is made up of gifts and bequests that has been created to be a continual source of income for a particular organization or mission.  The principal of the endowment is typically not invaded.  The perspective of holding an endowment is very long-term as these are funds that are given in perpetuity to support their causes. Investment earnings are used to grow the fund and to provide the beneficiary with ongoing financial support.  The earnings on the investments are distributed in a process called grants. Gifts may be given in the form of immediate gifts such as cash, real estate, stocks and bonds – or in the form of future gifts through wills and bequests or as a designated beneficiary of a life insurance plan, retirement plan or IRA. 

Why have an endowment?

An endowment is an important element to secure the future of a nonprofit organization. It is only through the stabilizing element of earnings provided by this pool of capital that an organization can assure its continuing operations.

What is the benefit of establishing an endowment rather than giving directly to my parish, school, or ministry?

An endowment stays permanently invested. An outright gift of cash is depleted over time. An endowed gift is administered based upon an irrevocable legal agreement. You can be assured that your donation will only be used as you have specified. There is no guarantee that an outright gift of cash will be used as you intended.

How much is needed to establish an endowment?

You can establish a new endowment with an initial gift of $5,000 – if you intend for that endowment to receive additional contributions. Any gift amount can be added to an existing endowment.

What is the current endowment distribution rate?

The current annual distribution rate is 4% of average market value. Note: the distribution rate is the amount available annually to the endowment’s beneficiary. The distribution rate is not the annual rate of investment return. All investment returns remain in the endowment to assist in growing the endowment.

Are distribution options available?

Yes, the beneficiary recipient can choose to receive the distribution at the time it is offered, carry the distribution over to a future payout date or reinvest the distribution permanently in the fund.

Does the Catholic Foundation charge a fee for managing endowments?

Yes, the Catholic Foundation’s  fee for the management and administration of an endowment is based upon a percentage of the fund balance as determined by the Catholic Community Foundation of San Diego’s  Board of Directors. Currently, the management fee is set at 1%.  It can be less based on the size of the fund.

Are contributions to the Catholic Foundation tax deductible?

Yes, to the extent allowable under IRS regulations. The Catholic Foundation is classified as a 501(c)(3) tax exempt organization. Contact your tax advisor or accountant regarding your particular tax benefit circumstances.

Who receives grants from a community foundation?

Grants are awarded to nonprofit organizations in the community based on established guidelines and processes. Some funds are accepted by community foundations with restrictions placed by the donors which designate the organization or nature of the grants to be made.

Who invests the foundation’s money?

Generally, the foundation will hire a professional advisor to assist in investing its funds. The board of trustees of the foundation will form an investment committee to establish the philosophy and policies for investments and to oversee the process. Investment advisors are regularly evaluated and replaced if they fail to meet the foundation standards.

Will the foundation ever change a donor’s instructions?

A common governing instrument, called a fund agreement, covers all gifts and funds in the foundation. This agreement includes a “variance power” to modify the use of restricted funds if such restrictions become unnecessary, incapable of fulfillment or inconsistent with the charitable needs of the community or area served. Those are the only conditions under which a foundation modifies the terms of a gift. 

How might community members use the foundation?

A family may choose to establish a named fund that bears their family name and continues their community giving in perpetuity. Some donors choose to make their community philanthropy anonymous and the foundation is a perfect partner to help them. Nonprofit organizations often establish their endowments within a community foundation to guarantee their endowment donors that the principal of the gift is never disturbed and the earnings will forever come to the organization.

How long does it take to establish a fund?

It is a simple process involving a meeting with a representative of the foundation and the donor to review the fund agreement form and determine the donor’s desires and the most suitable way to accomplish them. Once the donor and other appropriate counselors of the donor approve the form, the initial contribution is made and the fund is established. Generally the fund needs to be approved and accepted by the board of the foundation at its next meeting.

Must all gifts be cash?

No. The foundation is able to accept gifts of appreciated securities (which are particularly advantageous to the donor), real property, life insurance or, in some cases, personal property. Our community foundation offers the maximum charitable deduction available for estate and gift planning opportunities. The foundation is able to provide information on giving techniques and assist donors to evaluate the most effective ways to accomplish their charitable goals.  Gifts may be given in the form of immediate gifts such as cash, real estate, stocks and bonds – or in the form of future gifts through wills and bequests or as a designated beneficiary of a life insurance plan, retirement plan or IRA.

How are the operating costs of the foundation paid for?

Each fund is assessed an annual fee to help cover the administrative costs of the foundation. A primary goal of the Catholic Community Foundation of San Diego will be to minimize administrative costs so that maximum earnings can be granted to nonprofit organizations to further the mission of the Church.

What type of reporting will be available to donors and the community at large?

Transparency and accountability are hallmarks of our foundation. The bylaws of the Catholic Community Foundation of San Diego have been drafted to require the foundation to undergo an annual independent audit which will be published on the foundation website. The information provided will include a detailed breakdown of donations, grants, fund balances and other important information substantially consistent with the information included in a Form 990, the tax return filed by nonprofit public charitable organizations.

Are the Catholic Foundation assets separate from Diocesan funds?

Yes. The Catholic Foundation is a separately incorporated 501(c)(3) organization. By law, no one can appropriate money from the Catholic Foundation for any purpose other than that for which it is specified.

What is the Catholic Foundation’s investment strategy? 

The Catholic Foundation’s  investment strategy is focused on total return to preserve and enhance the purchasing power of each endowment and to maintain a consistent distribution policy so that endowment beneficiaries can prudently utilize their distributions.

What is the difference between Founders Circle and Perpetual Light Society?  

The main difference between the two designations is that our Founders Circle is cash in hand for the Foundation, while Perpetual Founders is a promise of funds to come.

One program represents funds available now and one is funds available for the future. Both are extremely important to the present and future of our organization. If you are considering becoming a member at either level we welcome you to contact our office so we can help you understand more about these special groups.