Nonprofit Agency Endowment Fund
A Nonprofit Agency Endowment Fund can be established at CFAAC with a minimum of $25,000. Your organization can add to the endowment at any time. The fund can be named after your organization, in honor of a major donor, or another name that reflects your organization’s mission.
Your organization’s endowment monies are invested and safeguarded to meet the future needs of the organization. CFAAC will manage your fund, report to the IRS and the State of Maryland, prepare quarterly statements, and distribute income to your organization. The assets the nonprofit contributes to the endowment continue to be recorded on your organization’s balance sheet even though they are legally held and managed by CFAAC.
Your organization will receive quarterly financial reports on the status of the endowment, including gifts, grants, fees, and investment returns. You will also have access to the online portal to review the status of your fund at any time.
Why Establish a Nonprofit Agency Endowment Fund at CFAAC?
Building a permanent endowment is a critical step in ensuring your nonprofit’s long-term success. An endowment fund at CFAAC will assure your donors that they are contributing to a stable, growing organization, and to a purpose that will endure forever. If your organization should ever cease operations, CFAAC will redirect the income of the endowment to a nonprofit with a similar purpose.
Nonprofit Agency Funds are invested in CFAAC’s Long-Term Growth pool for maximum return with minimum financial risk. Your endowment is pooled with the overall assets of CFAAC, which reduces investment management costs and allows exposure to sophisticated investment vehicles. Over time, your endowment should grow as the result of better-than-average investment results and low management fees.
An endowment provides a constant source of income for your organization. Distributions are made annually according to CFAAC’s spending policy. CFAAC’s current spending policy rate is 4%. All income above fees accrues to your endowment. You may elect to receive the annual distribution or reinvest it for continued growth.
Through CFAAC’s promotional efforts, your organization’s endowment will be publicized throughout the community. In addition, your organization will become a CFAAC partner for community fundraising efforts such as Endow Maryland.
The Endow Maryland tax credit applies only to gifts to permanent, endowed funds at qualified Maryland community foundations. These gifts will generate many times the initial value of the gift in benefit of Anne Arundel County forever.
Endowment Calculator
Our Endowment Calculator is a useful tool for donors and advisors to project the growth and potential grantmaking capacity of an endowment over time.
IMPORTANT: The results provided by the Endowment Calculator are intended for illustrative purposes only and are not guaranteed. The illustration should not be relied upon nor deemed as endowment fund advice. The investment projections, outcomes and other information generated by the Endowment Calculator are hypothetical in nature, are based on the Community Foundation of Anne Arundel Counties investment goals and policies, and may not reflect actual investment results. Results may vary with each use and over time, and they are not guarantees of future results. Projections assume annual return of 7%, supporting fees of 1.00% and an annual distribution rate of 4.0%. Supporting fees vary by fund. No market value averaging formula is being used. Formulas assume one distribution per year.