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Terms to Know The County Endowment Fund Program focuses on countywide community foundations in 85 counties across<br />
the state. In many counties, these organizations are referred to as affiliate community foundations because<br />
they work closely with a host community foundation which has been confirmed in compliance with the national<br />
standards for US community foundations. The illustration below provides a brief overview of several terms<br />
important to the implementation of the County Endowment Fund Program: community foundations, affiliate<br />
community foundations, endowed funds and expendable funds. To learn more about terms used by community<br />
foundations, please visit www.<strong>Iowa</strong>CommunityFoundations.org/Terms-to-Know.aspx.<br />
Community Foundations<br />
<strong>Iowa</strong> community foundations are tax-exempt, nonprofit organizations established to meet the current and future needs of local<br />
communities. Community foundations are trusted and valuable resources to individuals, families, businesses, nonprofit organizations<br />
and professional advisors working to build local philanthropy with a focus on creating endowments for the long-term benefit of<br />
charitable projects and programs. Community foundations provide grant support to a broad range of community needs such as arts<br />
and culture, health, human services, historic preservation, etc. Because a community foundation carries the status of a publicly<br />
supported nonprofit, they also grow assets through contributions from many donors. A community foundation often has numerous<br />
funds as part of its total assets; funds such as scholarship funds, agency endowment funds and donor-advised funds all allow donors<br />
to make a charitable impact in the area of interest to them. Collectively, nearly 1,500 <strong>Iowa</strong>ns volunteer their time and energy in the<br />
community foundation movement right here in our state.<br />
Affiliate Community Foundations<br />
An affiliate is a component of a community foundation that is, by most simplistic accounts, a fund or collective of funds that is advised<br />
by a group of leaders in a specific geographic area. For example, there may be eight community leaders in XYZ County who advise<br />
grants from a charitable fund and rely on a “host” community foundation to be responsible for all of the administrative requirements of<br />
those charitable funds. Most commonly in <strong>Iowa</strong>, community foundations that have affiliate funds approach the administration of those<br />
funds similar to administering an entire community foundation but as a component of the larger, host community foundation. These<br />
funds are then monitored in some way by a local collective of people from the geographic area being served.<br />
Endowed Funds<br />
An endowment fund (for the purpose of the legislative programs) is a charitable fund that<br />
provides grant support to <strong>Iowa</strong> charitable causes yet does not allow the annual spending rate<br />
to exceed 5 percent. Any contributions made to an endowment fund are irrevocable gifts held<br />
as an asset of the community foundation receiving the contribution. The intent of the fund is to<br />
grow by reinvesting the principal to create even greater impact in the future.<br />
Expendable Funds<br />
Expendable funds are charitable funds where the contributions are not endowed and, instead,<br />
both the principal and interest are available for grants to charitable purposes in the community.<br />
Community foundations that hold expendable funds may also interchangeably reference<br />
expendable funds as pass-through funds.<br />
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