What is an endowment?
An endowment is a permanent fund (account) that is invested to earn a return of income and growth. Five percent of the value of each fund is annually available for distribution to charity.

Why build an endowment fund rather than give directly to non-profit organizations?
An endowment is a permanent investment that grows over time. Each year, a portion of each fund can be distributed to charitable causes. Rather than a one-time gift, an endowment continually generates resources that will be available forever, providing in perpetuity to the organizations that mean the most to donors.

Is it possible to make charitable distributions outside of Dane County?
Distributions may be made to any 501(c)(3) charitable organization in the United States. However, community impact grants directed by the Madison Community Foundation Board of Governors are focused on charities in Dane County.

How much does it take to create an endowment?
Most endowments require a minimum of $10,000 in order to begin to make distributions. Acorn Funds allow donors to build gradually to a $10,000 level with a minimum annual investment of just $1,000. The Red Balloon Club, designed for adults and children to save and make grant distributions side-by-side, offers an endowment level of $5,000 with a minimum annual contribution of $500.

Who can make contributions to an endowment or passthrough fund?
Anyone can contribute any amount to any fund at the Madison Community Foundation. Donors initiating funds often make annual gifts for further growth. In addition, contributions are made for life events such as birthdays, anniversaries and in memorium.
 
How is a fund created? 
A simple fund agreement is crafted by Madison Community Foundation staff for each new fund. 

For more information, contact Amy Overby, Vice President of Donor Relations, at (608) 232-1763 or aoverby@madisoncommunityfoundation.org.