Create Your Legacy
Don't judge each day by the harvest you reap but by the seeds you plant.
- Robert Louis Stevenson
Why Choose Us?There are many benefits of establishing a fund at Legacy Endowment:
Simple and Flexible
- You may contribute a wide variety of assets
- Give now, give later as part of your estate plan, or both
- Make grant recommendations to qualified organizations anywhere in the world
- You benefit from the most favorable tax deductions under IRS regulations
- Take your tax deduction in the year you make a gift and then recommend grants over time, effectively separating tax decisions from your charitable giving decisions
- We handle all administration tasks, so you free up your time and reduce your expenses
- We manage our investments through our experienced Investment Committee, rather than an outside manager, which reduces the fees charged to your fund
- We provide a low-cost alternative to opening and operating a private foundation
- Our Investment Committee is comprised of successful investment managers who bring their global perspective to the investment of community charitable assets
- Your contributed assets are pooled with those under management allowing for greater diversification and economies of scale
- Our Investment Committee is dedicated to preserving your contributed assets while enabling you to maximize your philanthropic giving
- We protect your charitable choices, fulfilling donor intent today and in perpetuity
- You may name your fund for yourself, your family, an organization, in memory of a loved one or choose a name that protects your privacy
- No matter what name you choose, you can remain anonymous if privacy is important when making any gift or a grant
- You may engage family members in the grant making process
- We are very knowledgeable about regional issues and needs, as well as the quality organizations addressing those needs, and can assist with informed giving decisions
- We are available to work with you to create grant agreements, monitor grant reporting, and arrange site visits with non-profit organizations
- As your interests may not always be local, we can research organizations to provide information that matches your charitable intent, nationally and beyond
Types of Funds
The Legacy Endowment makes it easy for individuals and charities to accomplish their goals and leave their positive mark on the community today and for generations to come.
Donor-advised funds give donors the chance to have a say in the decision-making process. The donor may make recommendations as to how much money goes where. Foundations will generally do their best to enact all suggestions (usually dependent upon whether the organization designated is a non-profit organization, classified as a 501(c)(3) by the IRS.)
Field of Interest Funds
These funds allow donors to specify a field of interest to be supported, without specifying individual charities. The foundations then make grants to appropriate local organizations serving the designated need.
Charitable Remainder Trust (CRT)
An arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living. The beneficiaries receive the income and the charity receives the principal after a specified period of time. The grantor avoids any capital gains tax on the donated assets, and also gets an income tax deduction for the fair market value of the remainder interest that the trust earned. In addition, the asset is removed from the estate, reducing subsequent estate taxes.
Designated (restricted) Funds
Agency Endowment Funds
These are established by nonprofit organizations in the interest of building their own endowments. Income from these funds provides the organizations with a source of revenue they can rely on, increasing self-sustainability and financial security.
Administrative Endowment Funds
These funds are ledged to support the community foundation itself, specifically day-to-day administrative operations. Donors set up this type of fund as a means of assisting the foundations in all of their projects, building up infrastructure and reducing the fees charged for fund management. Community foundations offer useful solutions for civic-minded donors looking to make a difference through philanthropy.
You can play a part in developing our future leaders by establishing an academic scholarship in the name of a family member, coach, mentor or other significant person. You set the selection criteria and appoint an advisory committee to oversee the application process.
How We Invest Your FundsThe Legacy Foundation currently distributes more than $500,000 annually for scholarships and to local charities. Since its inception, the Foundation has directed more than $9 million to those charitable endeavors as specified by our donors. One of the Foundation’s most important responsibilities is our stewardship of charitable funds entrusted to our care by donors large and small. We have a broadly diversified investment portfolio that is structured to first, preserve the capital of each gift, and secondly, to grow the gift sufficiently to maintain purchasing power and provide for future needs.
Investment Advisory Team
Investment Philosophy and Purpose Statement
Investment Policy Statement (ISP)
One of the Foundation’s most important responsibilities is our stewardship of charitable funds entrusted to our care by donors large and small. We have a broadly diversified investment portfolio that is structured to first, preserve the capital of each gift, and secondly, to grow the gift sufficiently to maintain purchasing power and provide for future needs. The ISP is designed to ensure prudent management of Foundation assets consistent with the long-term interests of its stakeholders while adhering to the State of California Uniform Prudent Management of Institutional Funds Act (UPMIFA).
The assets of the Foundation represent a pool of donations from individuals and organizations. The donations may be (a) unrestricted in purpose with investment earnings to be spent at the discretion of the Foundation, (b) restricted in purpose with the principle and/or investment return to be distributed as designated by the donor, (c) charitable remainder trusts and gift annuities, (d) pass-through, or (e) any other asset of the Foundation, subject to the provisions of the Articles of Incorporation and Bylaws of the Foundation.
The Foundation’s investment program is defined in the various sections of the IPS by:
- Stating in a written document the Committee’s attitudes, expectations, objectives and guidelines for the investment of the Funds’ assets.
- Setting forth an investment structure for managing all assets of the Foundation. This structure includes various asset classes, investment management styles, asset allocation and acceptable ranges that, in total, are expected to produce a sufficient level of overall diversification and total investment return over the long-term.
- Providing guidelines for any investment managers that moderate the level of overall risk and liquidity assumed in that investment portfolio, so that all the Foundation’s assets are managed in accordance with stated objectives.
- Encouraging effective communications and understanding regarding investment performance between the Committee, the Board, and investment managers.
- Establishing formal criteria to monitor, evaluate, and compare the performance results achieved by investment managers on a regular basis.
- Complying with all applicable fiduciary, prudence, and due diligence requirements that experienced investment professionals would utilize, and with all applicable laws, rules, and regulations for various local, state, federal and international political entities that may impact the Foundation’s assets.
The Foundation’s objectives, established in conjunction with a comprehensive review of the current and projected financial requirements, are as follows:
- Maintain a constant funding support ratio
- The Investment Committee is tasked to grow the Foundation’s invested assets in accordance with UPMIFA to maintain the level of programs and services currently provided. This can only be met if sufficient total return is reinvested and sufficient new funds are added to keep pace with cost increases and program expansions.
- Maintain the purchasing power of the Fund.
- Upholding the level of services and programs in relation to average cost increases is vital and necessary. This requires establishing an annual spending target of 5.5% (average of 4.5% for programs and 1% for administrative costs) and a target return rate of 7.5% (average of 4.5% for programs, 1% for administrative costs, and 2% estimated core annual inflation), at a minimum.
- Follow a spending policy based on portfolio performance.
- Adhering to a portfolio performance-based policy allows the committee to (a) map out a long-term investment strategy, and (b) employ modern investment management techniques.
- Apply a smoothing practice to mitigate the effects of short-term market volatility on spending.
- Since investment returns may vary dramatically from year to year, spending a constant percent of the Foundation’s market value could cause instability with fund distributions. Therefore, the following smoothing practice is to be applied:
- Moving Average – The annual spending rate will be determined by considering the average of the past three years (previous 12 quarters) of the Foundation’s endowment funds’ market values, in conjunction with a snapshot of the fiscal year-end audited financial statements.
For the purposes of planning, the time horizon for investments is greater than ten years. Capital values may fluctuate over shorter periods and should be viewed with appropriate perspective. Though the risk of principal loss does exist, the historical asset class return data suggest that the risk of such loss can be minimized with the long-term investment mix employed under this IPS. Additionally, the board believes a moderate risk position is appropriate and rates their own risk tolerance as moderate. The board intends that the portfolio should be managed in a manner that seeks to achieve the stated rate of return while limiting principal fluctuations over established horizon.
Limitations and Restrictions
The following categories of investments are not permitted for investment without the Board’s prior written approval:
- Unregistered or restricted stock
- Commodities and Futures Contracts
- Private placement debt – except as may be positioned in a commingled fund which does not specifically emphasize private placements
- Tax exempt securities – either state or federal
- Conditional sales contracts and mortgages
- Uncovered options
- Hedge fund or venture capital partnerships
- Trust Deeds
- Short sales or margin purchases or purchases with debt either directly or within a co-mingled fund
- Transferable certificates of participation in business trusts and limited partnerships
- Securities in firms associated with Committee or Board members, outside investment managers or their respective parents, subsidiaries or affiliates
- Securities in violation of California law
- Collectables- including art, coins and stamps
- Any investment which would give rise to Unrelated Business Income Tax “UBIT” as defined by the Internal Revenue Code
Investments in companies doing business not in accordance with the policy statements of the Investment Committee may be permitted if they are consistent with an existing trust instrument, upon approval of the Board of Directors.
The investment managers are responsible for asset allocation rebalancing with the board-adopted acceptable ranges, as needed. Periodically, the committee will review its target allocations to confirm or recommend adjustments.
If you are searching for IRS Form 990, you can find that at our Guidestar/Candid Profile.