Here are some answers to common questions about the Lutheran Community Foundation. If you have additional questions, please contact us.
What is the Lutheran Community Foundation?
The Lutheran Community Foundation is a pan-Lutheran public charity that exists to provide a connection between donors and the community. The community served by the Foundation represents the common values and beliefs of Lutherans that extend beyond the Lutheran community to include public charities anywhere, and people of any faith tradition who want to leave a legacy.
As a community foundation, we accept gifts from individuals and organizations, invest these gifts for growth, and then distribute grants to support the charities and causes. In accepting these gifts, the Foundation is promising that we will use the gifts as the donor intended, to the extent legally possible. Charitable funds established at the Foundation are designed to be perpetual. If the charity that the donor recommends goes out of existence, or changes its mission or programs in some fundamental way, the Foundation Board must retain the ability to react to changing circumstances long after the donor's lifetime.
What are the steps to establish a charitable fund at the Foundation?
- Complete the appropriate pages of the Fund Workbook, and mail or fax the pages to the Foundation.
- The Foundation will draft a Fund Agreement and return it for your review.
- When you're satisfied with the Fund Agreement, sign and return it to the Foundation. In return, the Foundation will sign the Agreement and return a copy to your for your files.
- The initial gift to the new fund can be sent in with the signed Fund Agreement, or can come later.
What types of assets can I give?
Gifts to the Foundation can be made in many forms and in any size, and can be customized to fit each donor's personal circumstances. Gift options include cash, publicly traded securities (including stocks, bonds, mutual funds and stock in closely held companies), real estate and retirement assets. Donors can make these gifts through their will or trust, life insurance, bequests and beneficiary proceeds, charitable remainder trusts and gift annuities.
Most gifts can be made quite simply. Regardless of the type of gift, the Foundation staff is interested in being of service to you, your attorney and other financial advisors to ensure your charitable giving objectives are achieved.
What does it cost to establish a fund?
There are no fees or costs to establish a fund. Each fund at the Foundation is assessed an administrative fee that covers a portion of the program costs and administrative expenses, and supports the Foundation's mission. The annual fee is currently 1% of the fund's market value. Fund assets in excess of $1 million are assessed a reduced fee of 0.5%.
This rate is comparable to administrative fees assessed by other community foundations (fees typically range from 1% to 5%), and is subject to change based on board recommendation.
How are the fund's assets invested?
All funds are invested according to the Foundation's investment policies and guidelines, which reflects a desire to obtain the highest investment return possible within acceptable levels of risk. Guidelines for diversification are established to control volatility and to provide a reasonable assurance that no single security or class of securities will have a disproportionate impact on the total portfolio. Download the Foundation's most recent investment report.
The following target and range for each asset class is expected to produce patterns of returns and fluctuation levels for the overall portfolio that correspond to the return objectives, liquidity objectives and risk tolerance of the Foundation:
| Asset Class | Long-term Percentage Target |
| Large Capitalization U.S. Equity | 15% |
| Medium Capitalization U.S. Equity | 5% |
| Small Capitalization U.S. Equity | 5% |
| Global (non-U.S.) Equity | 22% |
| Emerging Markets Equity | 7% |
| Marketable Alts.(Hedge Funds/Absolute Return) | 10% |
| Real Estate | 11% |
| Fixed Income | 25% |
| Total | 100% |
Investments, whether actively managed or indexed, are measured by appropriate benchmarks and monitored quarterly, and the overall investment portfolio is measured against a composite benchmark that reflects the target asset allocation. The Foundation's investment policies, objectives and guidelines are reviewed at least annually.
I would like to make a gift, but I also need an income during my lifetime. What can I do?
The charitable remainder trust works like this:
1) You transfer an asset into the charitable remainder trust.
2) The trustee pays you and your spouse or another, if you wish, income from the trust for life, a term of up to 20 years from the trust investment, or a combination.
3) At the time of your death, the remaining assets in the trust go into the charitable fund you establish at the Foundation for the benefit of the charities you recommend.
There are different types of charitable remainder trusts, one type pays you a fixed income that will not vary from year to year; another type pays you a percentage of the value of the trust, which is recalculated each year.
In contrast, the charitable gift annuity works like this:
1) You transfer an asset to Foundation.
2) The Foundation creates a gift annuity contract.
3) The Foundation pays you a fixed annual payment to you and your spouse, if you wish, for your lifetimes.
4) Upon your deaths, the residuum of the gift annuity goes into your charitable fund at the Foundation, for the benefit of the charities you recommend.
While the charitable gift annuity sounds virtually identical to the charitable remainder trust, it differs in some very significant ways. For more information about both charitable remainder trusts and gift annuities, go to Gift Options.
I would like to give my home, but continue living in it during my life. Is that possible?
Yes. You can deed your home, your farm or recreational property, reserving the right to live there for the rest of your life. You have the comfort of knowing that some day the charities you recommend will benefit from the value of your property without having to wait for a probate proceeding. You also receive an income tax deduction right now. During your life, you enjoy use of the property or rental income (if you choose to rent it out), and continue to pay for the costs of maintenance, insurance and property taxes. At the time of your death, the property is sold for the benefit of your charitable fund at the Foundation.
Can I leave the remaining balance of my qualified retirement plan to the Foundation?
Yes. In fact, if you leave your qualified plan balance to someone other than your surviving spouse or a charity, it could be subject to income and estate taxes. The amount of the tax depends on the balance in your qualified plan and the marginal income tax bracket of the beneficiary.
Under current IRA minimum distribution rules, it is projected that 90% of the people at 90 years of age will have 150% of their plan balance left. If you have planned to leave your IRA balance to children or others, you might want to consider the tax implications. One alternative is to bequeath the balance to the Foundation for the benefit of your charitable fund, thereby avoiding income tax on that gift and providing benefit to charity.
Will the Foundation disclose my name to the charities that receive grants from my fund?
You, the donor, decide whether or not the charities are informed of your name and gift - you may choose to have your name disclosed, or you can remain anonymous till death or forever, if that's your wish. If you choose to have your name disclosed to the charities, disclosure is made in a letter that accompanies grants from the fund. At the donor's request, the Foundation will inform charities that they have been named to benefit from the fund at the time a fund is established.
How can I be assured that grants from my fund are used responsibly by the benefiting charity?
The Foundation carefully administers all grants to the community to ensure that they're utilized responsibly and effectively. Each grant is administered with due diligence, meaning that the Foundation follows grantmaking procedures outlined by the IRS and Foundation policy. Staff reviews all donor grant recommendation to ensure that benefiting organizations are in fact 501(c)(3) non-profit organizations as defined by the IRS, and all documentation obtained is kept on permanent file.
Even after a grant is made, the Foundation proactively maintains a relationship with grantee organizations. By doing so, the Foundation knows exactly how grants are making a difference in the community, and also gains a better understanding of an organization's needs and the needs of the community. In many cases, the Foundation conducts site visits to the charities and requests reports from charities outlining how grant dollars are used. These reports are shared with donors.
Can I make changes to my benefiting charity recommendations in the future?
You have the option to request changes to the charities recommended in your Fund Agreement up to five times during your lifetime by completing the form provided for your use. The Foundation will then prepare an addendum to your Fund Agreement and will send it to you for your review and signature. Once the Foundation receives the signed addendum, the change in charities takes effect. If the Fund is currently making grants, the change in charities takes effect the following year.
How can I get more information about the Foundation?
