Restricted funds may be established at the Jewish Community Foundation with a minimum of $10,000. There are two primary types of restrictions: spending and use.
Choosing which type of restricted fund is right for you will depend on your philanthropic goals.
The most common spending restrictions are endowments. Endowments are charitable funds that create an income stream for long-term use. They are funds intended to last “in perpetuity” and provide ongoing support that may be relied upon year after year. Generally, a percentage of the fund’s market value (usually around 5%) is distributed annually.
Virtually all other funds are expendable funds. Expendable funds are not limited by the amount that can be distributed from them. Therefore, the assets of an expendable fund usually diminish and are spent down over time.
Regardless of spending restrictions, funds may also be restricted as to use or purpose.
Funds can be established for support of a specific program, organization or particular field of interest. Distributions from these funds are usually made upon request by the designated disbursing authority (typically an agency, congregation, or program director) or committee and are restricted to those purposes described in the fund agreement.
“Our family created the Peter Gerson Educational Scholarship Fund to provide higher educational scholarships to Gerson Company employees and their families. The idea of offering scholarships to employees provided a meaningful way to honor my Dad’s memory. Although our family has its own private foundation, the Jewish Community Foundation offered the perfect vehicle to easily create, execute and administer all aspects of the scholarship fund." – Liz Hjalmarson
For more giving stories, visit Portraits of Generosity