Town Fund Frequently Asked Questions
Why a town fund?
The Cape Cod Foundation recognizes the uniqueness of the Cape’s many towns and villages and people’s strong desire to support the community dearest to them. The “sense of place” motivates many to give to their community. Setting up a fund dedicated to a town can help facilitate people’s charitable giving.
Why is being part of The Cape Cod Foundation important?
Being part of The Cape Cod Foundation brings many advantages to an endowment fund for the community. The Cape Cod Foundation has over twenty-five years of experience and service to the communities across the Cape in providing guidance and administrative assistance in grantmaking and handling tax and financial issues associated with managing an endowment. The Cape Cod Foundation’s experience and resources for professional investment management will enable the town funds to focus on their core missions of making grants to local organizations.
Why a Permanent Endowment?
Building an endowment will allow the town funds to progressively increase available charitable support to the community. As the endowment grows, grant levels will increase and the town funds will invest in more opportunities to improve their communities.
Why are the funds unrestricted?
Unrestricted funds are a community foundation’s most powerful tool in being responsive to changing community needs. Building unrestricted funds recognizes that a community’s future needs are unknown and that future generations will be better able to address them and prioritize giving accordingly. However, a donor may make a gift to a town fund earmarked for grantmaking in a specific area of interest (e.g. arts, human services, environmental, etc).
How will the grantmaking be funded before the endowment is big enough to support annual distributions?
Town funds have been established through donations and their advisory boards continue to cultivate relationships with businesses, organizations and individuals who wish to pledge their support. A portion of the funds raised will be earmarked for grantmaking and the balance placed in the endowment fund.
What will the town funds support?
Grant recipients must be designated 501(c)3 charitable organizations by the IRS and the proposals must serve the town fund’s community. With guidance from The Cape Cod Foundation, the local advisory boards and grant advisory committees set grantmaking levels and priorities. The funds will respond to diverse needs and innovative ideas, approaches and collaborations. A list of past grants the towns have awarded are available.
How are the town funds governed?
Essential to a successful area fund is the development of a strong local advisory board and grant review committee who bring in-depth knowledge of community issues to the grantmaking process. A list of the current town fund advisory boards is available.
Why would a donor give to the fund rather than directly to a local nonprofit?
Donating to a town fund is the right choice for those wishing to give one gift that will benefit many local organizations and who want the impact of their gift to be multiplied. Giving to a town fund is an effective way to leave a permanent legacy that remains responsive to the most pressing needs of the community.
How much money will the Fund distribute?
Through targeted fundraising and endowment development, the town funds will continue to grow. As endowments grow, annual grants from each of the town funds will continue to increase.
What are the overhead costs associated with the town funds?
The Cape Cod Foundation has been successful in keeping its overhead and investment fees low. Town funds benefit from being part of The Cape Cod Foundation and sharing the Foundation’s administrative staff and investment committee.