Create a Legacy: Tools & Resources for Donors

Frequently Asked Questions

• What is a community foundation?
• How does a community foundation work?
• What is the purpose of The Catholic Community Foundation?
• What is the relationship between the Archdiocese of Milwaukee and the Foundation?
• Can Foundation monies be used at the discretion of the Archbishop or Archdiocese? What controls exist over the use of Foundation funds?
• How does the Catholic Community Foundation help individual donors?
• How does the Foundation help the Catholic non-profit community?
• What kind of causes does the Foundation support? Will it consider funding non-Catholic activities?
• Who decides which organizations receive grants?
• How are the Foundation's funds invested?
• Who manages the Foundation's investments?
• What investment strategy does the Foundation follow?
• Is the Foundation a civil or canonical corporation?

What is a community foundation?

A community foundation is a collection of grant-making funds established by charity-minded individuals, families and groups who wish to set aside money to provide long-term support to a defined community.

Instead of incurring the great expense of setting up their own private foundations and hiring staffs to screen grant requests, administer donations, monitor investment results, and handles all the other "back office" work involved, donors set up funds within the community foundation so these expenses can be shared and almost all of their charitable dollars can go to the causes they wish to support.

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How does a community foundation work?

A donor creates a fund by making a gift to the community foundation. Most gifts come in the form of cash, appreciated stock, charitable remainder trusts or bequests Ð all very advantageous from a tax standpoint. The donor establishes the fund and its purpose. The assets in the fund are invested in a pool along with other funds administered by the foundation. Every year, a portion of the return earned on the donor's fund is used to award grants in accordance with the fund's purpose. The rest of the money earned is retained to keep the fund growing.

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What is the purpose of The Catholic Community Foundation?

The Foundation's ultimate purpose is to sustain and spread Catholic values by increasing the amount and effectiveness of philanthropy flowing to causes that support the mission of the Church in Southeastern Wisconsin.

The Foundation provides assistance to three groups:

• Individuals, families and groups who wish to provide long-term support to organizations and causes that perpetuate Catholic values.
• Catholic parishes and other organizations that can benefit from having the Foundation manage their endowments and long-term investments.
• Non-profit organizations that are advancing the mission of the Church.

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What is the relationship between the Archdiocese of Milwaukee and the Foundation?

The Catholic Community Foundation is a separate, freestanding entity. Under church law, it is known as an autonomous pious foundation -- a collection of assets to be used for the work of the Church. The Foundation is guided by its own Board of Directors.

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Can Foundation monies be used at the discretion of the Archbishop or Archdiocese? What controls exist over the use of Foundation funds?

Only funds established with the express wish that they be expended at the Archbishop's or Archdiocese's discretion may be used in this manner. Both canon and civil law require all funds placed with the Foundation to be administered and distributed in accordance with the wishes of the donor. The Foundation Board has the final authority to approve all grants.

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How does the Catholic Community Foundation help individual donors?

The Foundation assists donors in five ways:

1. It provides an easy, tax-advantaged way for individuals and families to provide long-term support to charitable causes that are consistent with their personal values.
2. It provides socially responsible, sophisticated, professionally-monitored investment management to protect and grow contributed assets.
3. It provides professional evaluation of grant requests to ensure donors' charitable contributions support organizations that meet important community needs.
4. It enables interested donors and/or their families to remain involved in directing funds to organizations they desire to support, both in and outside Southeastern Wisconsin.
5. It works with organizations that request funding to establish clear performance expectations and hold recipients accountable for results.

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How does the Foundation help the Catholic non-profit community?

By calling attention to the wisdom and convenience of establishing charitable funds, charitable remainder trusts and other giving mechanisms, the Foundation helps to bring about a net increase in charitable giving, with most of this new philanthropy flowing to Catholic non-profit organizations.

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What kind of causes does the Foundation support? Will it consider funding non-Catholic activities?

In all cases, grants are made from a fund in accordance with the donor's specifications. Given the diversity of interests within the Catholic community, the Foundation provides funding to a wide range of organizations and causes. Most recipients share at least two common bonds. First, most grants go to organizations and causes within the Archdiocese of Milwaukee, although donors are able to direct a portion of their annual contributions to recipients outside this area if they so desire. Second, most grants go to organizations that are affiliated with the Catholic Church, although donors are able to direct a portion of their contributions to other charitable causes they wish to support.

From time to time, the Foundation Board approves grant requests from non-Catholic organizations whose work supports the mission of the Catholic Church, such as sheltering the homeless. However, given the large number of charitable organizations in Southeastern Wisconsin that are affiliated with the Church, the large majority of funds are directed to organizations with Catholic ties.

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Who decides which organizations receive grants?

That depends on the type of fund involved. Some donors choose to remain involved in the grant-making process by establishing donor-advised funds. Every year, they (or someone they designate to represent or succeed them) will recommend grant recipients. In other cases, donors may choose to specify one or more categories of organizations or causes they wish to support and allow the Foundation staff to see that their contributions are wisely made within this field of interest. Other donors may establish unrestricted funds, knowing that community needs change over time and directing that their philanthropy go to wherever needs are greatest.

Organizations seeking grants from field of interest and unrestricted funds must submit applications and supporting documentation (non-profit status, budgets, board list, etc.). Foundation staff will review and summarize grant requests and make site visits as appropriate. A committee established by the Foundation's board of directors will then review the requests and make approval recommendations to the board.

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How are the Foundation's funds invested?

The Foundation prudently invests the funds with the objective of achieving a return that exceeds inflation by at least five percent. The Foundation's Investment Committee has worked with professional advisors to carefully develop investment goals and guidelines that outline risk parameters and define the socially responsible criteria that are applied to investment selections. Investments are made in publicly-traded equity and fixed-income securities by several investment managers chosen by the Foundation Board. The performance of the investment managers is reviewed regularly and compared to benchmarks selected by the Board's Investment Committee. All funds received from donors or parishes and agencies are pooled for investment purposes, but each donor/parish/agency fund is separately accounted for and reported on.

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Who manages the Foundation's investments?

Professional investment managers make investment decisions in accordance with Foundation guidelines. Different managers are employed for each asset class in which the funds are invested (fixed-income securities, large company stocks, small company stocks, etc.). The Foundation Board's Investment Committee follow a disciplined evaluation and interview process and enlist the advice of an independent investment consultant for selecting investment managers who have successful track records in their specific areas or asset classes. Each manager's performance is monitored against a predetermined benchmark. Securities owned by the Foundation are held in custody by an independent third-party bank or trust company.

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What investment strategy does the Foundation follow?

The investment strategy has a conservative bias overall, with an emphasis on limiting risk through diversification of assets and the use of several investment managers. The Foundation takes very seriously its stewardship responsibilities to invest prudently, yet achieve a reasonable rate of return so that the philanthropic goals of the donors can be achieved.

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Is the Foundation a civil or canonical corporation?

The Foundation is recognized in both civil and canon law. Under civil law, it has corporate status as a charitable foundation. Canonically, it is what is known as a public juridic person, the canon law parallel to a civil corporation.

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