Endowments provide community foundations with a steady stream of income to support their charitable work in perpetuity.
How rural areas stack up
Comparing US foundation giving in rural versus urban areas
The USDA Economic Research Service conducted a study comparing US foundation giving in rural versus urban areas of the United States from 2005-2010. It concluded that “foundation giving to rural areas in the United States is disproportionately low.” ERS estimates that the value of U.S. foundation grants to rural areas was 6-7 percent of total domestic grants in 2010, while the 19% of the national population that year was rural.
The Foundation for Appalachian Virginia serves counties with some of the lowest rates US foundation giving in the country, as shown in the map below. This means that Southwest Virginia communities are not equally benefiting from the financially sustaining grants that US foundations make to charitable work and improving community quality of life nationwide. The greatest proportion of foundation grants are flowing to cities.
The Geographic distribution of real value of large foundation grants per capita, 2005-2010 (2010 $), varies widely across both nonmetro and metro counties. Source: USDA, Economic Research Service using Foundation Center data on U.S. domestic grants by large foundations.
Most rural areas have already wised up to the need to “grow their own” grant support by establishing a community foundation to help more good local projects get off the ground.
The FAV helps individuals and communities create their own endowed and non-endowed funds to benefit Southwest Virginia now and in the future. Because community foundations administer many endowed funds from many donors – it becomes possible to support the professional services (investing, accounting, management) to create a one-stop-shop for giving and grant-making that benefits all – donors, non-profits, and students.
The FAV administers two kinds of funds created by donors
Endowed Funds - When you establish an endowed fund through the FAV, think of it as creating a new savings account for the community. Endowed funds provide permanent support for grant-making over time. Endowed funds are invested with the goal of preserving principal and earnings from the endowment are used to make charitable grants. Grant and scholarship distributions from endowed funds are calculated based on the distribution percentage (typically less than 5%) set by the FAV Board of Directors annually (typically 4-4.5%) set by the FAV Board of Directors annually. A minimum gift of $5,000 is needed to create a new named unrestricted endowment fund or an agency fund. Donors have three years to reach this total. A minimum gift of $10,000 is needed to create an endowed designated fund (to benefit one or more specified organizations), donor-advised fund, or a field of interest fund. A minimum of $15,000 is needed to create an endowed scholarship fund.
Pass-Through (Non-endowed) Funds - Pass-through (non-endowed) can be used to make an impact on immediate community needs. The principal may be spent down to zero and replenished as desired by the donor. Pass-through funds remain in a money market account and grants and scholarships can be distributed in amounts recommended by the donor.
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You can help make an impact now and into the future
Find out how you can give through FAV to make a positive and lasting impact on our local communities.
