FAQs

A community foundation is a tax-exempt public charity made up of funds that have been established by individuals, families, and businesses. The community foundation invests the assets to generate income and then distributes the income to bona fide charities according to donors' suggestions, areas of interest, or through competitive grants made by the Foundation. One special appeal of a community foundation is its ability to respond quickly, effectively, and flexibly to both the donor's interests and the community's needs, now and in the future. Another is the maximum tax advantage afforded to donors. Although a major goal of the Long Island Community Foundation is to provide a permanent source of private funding for Long Island's charities, a donor can use the Foundation to achieve virtually any charitable objective anywhere in the United States or around the world through qualified nonprofit organizations.

LICF is an operating division of The New York Community Trust (NYCT) — one of the country’s oldest and largest community foundations, with assets in excess of $2 billion and consisting of almost 1,800 individual charitable funds. The NYCT has been helping charitable individuals, businesses, and private foundations with their philanthropy since 1924. We make philanthropy convenient, professional, and lasting.

The Long Island Community Foundation is one of more than 700 community foundations around the nation:

• We manage and administer charitable funds for individuals, families, and businesses, allowing donors to focus on their philanthropy, not on the paperwork.
• We award millions of dollars in grants to support nonprofit organizations located throughout Long Island, the region, and the country.

Charitable giving through a fund in the LICF offers donors maximum tax benefits without the bother of administration. The LICF staff performs all of the administrative work — bookkeeping, accounting, and check writing — and assures that only bona fide charities are supported. The New York Community Trust oversees investment of the LICF funds in order to generate income for charitable giving now and into the future.

A fund in the LICF accepts a broad range of assets and it only takes a gift of $5,000 or more to start a fund.

In addition to cash and publicly traded securities, the LICF accepts contributions of closely held or restricted stock, copyrights, and paid up life insurance interests upon a case-by-case review of those assets. In addition, through one of our bank trustees, we will consider gifts of real estate. Transfers of assets held in IRA's and Keoghs also will be accepted.

• More economical than a private foundation — When the costs of establishing and maintaining a private foundation outweigh its philanthropic and tax benefits, a fund in the LICF might make better sense for a client.
  • As a public charity, the LICF can receive a broader array of assets and affords greater tax benefits.
  • LICF fees are low, much lower than the costs of administering a private foundation, and The New York Community Trust oversees the investments of the funds.
  • No matter the size of the initial gift, whether $5,000 or $5 million, the donor gains access to the LICF and Trust staffs to perform all administrative functions associated with philanthropy, including due diligence to ensure that only bona fide nonprofit organizations are supported.
  • The LICF offers a range of fund types that afford varying levels of donor participation to suit your client's inclinations.
  • Donors may appoint successor advisors to carry philanthropy into the next generation.
  • In a year of unprecedented gain, a client may open a fund that allows charitable giving from both income and fund principal. By authorizing use of both income and principal for grantmaking, donors can enjoy the benefits of philanthropy even in sparer years.
  • Unlike the time and effort required to establish a private foundation, setting up an LICF fund can be accomplished by a simple letter agreement. The savings to donors are considerable, both in set-up and on-going administrative fees.
    
    The benefits of charitable giving through an LICF fund accrue, no matter the size of the initial gift. All LICF donors gain: immediate and favorable tax advantages; investment and management of funds by The New York Community Trust; freedom from the burden of filing annual reports with the IRS and New York State Office of Charities; and relief from excise taxes, penalty taxes, and a mandatory annual payout.

• More advantageous than a commercial gift fund — In addition to investment and fund management, unlike most commercial gift funds, LICF donors have the added bonus of access to an entire staff knowledgeable about the local nonprofit sector. Even donors with a well-articulated philanthropic vision benefit from the LICF staff's expertise. Through forums, newsletters, and site visits, LICF donors can learn more about the region, its nonprofit community, and its changing needs.
  
  The LICF is one of more than 700 community foundations and a member of the Council of Foundations, which permits access to a network of information about nonprofit organizations and issues throughout the country.
  
  Although it's the "Long Island" Community Foundation, donors may direct their philanthropy nationally and internationally as well as locally.

• Investment strategies to enhance donors' giving — LICF donors benefit from the affiliation with The New York Community Trust with investment management services to assure that assets are wisely invested. Managing more than $2 billion in assets in over 1800 funds allows The New York Community Trust to keep its administrative fees low, much lower than commercial philanthropic funds. Donors are given investment choices — preserving fund size, anticipating growth of the endowment, or making funds immediately available for grants.
  
  The LICF staff and board have deep roots in the Long Island community, bringing their education, experience, and knowledge to help donors refine and implement their individual philanthropic goals. Many LICF donors have come to rely on staff to research and recommend charities for support.
  
  LICF advisory board members are experienced philanthropists, educators, business and professional leaders, and community activists from across Nassau and Suffolk who use their acumen to guide the work of the LICF.

A fund is the basic building block of a community foundation; it acts as a foundation within a foundation. Funds are named for their donors, for their purposes, to afford anonymity in giving by using a name unaffiliated with an individual donor or family, or as memorials. Most funds operate as permanent endowments, distributing only their net income and a portion of principal; some allow for distribution of income and principal over a period of five years or more. Funds may have broad charitable purposes, providing unrestricted income to address community needs identified by the Foundation, or allow donors the privilege of suggesting grants when they wish to support particular organizations. Funds may support specific nonprofit organizations designated by the donor, or offer scholarship support through local high schools. Funds may even allow for a combination of these purposes.

Establishing a fund can satisfy a number of financial and estate planning concerns. Any of a variety of assets, including cash, securities, life insurance, IRAs, real estate, rights in intellectual property, and limited partnership interests, can be used to establish a fund in the LICF. Additional contributions may be made to the fund at any time. A donor can establish a fund at any point during his or her lifetime and enjoy the pleasure of watching your good intentions turn into steady support for charitable organizations. You can establish a fund through a bequest in your will, or even arrange, through a trust, for income to be provided to someone for a length of years before the fund is established. Contributions to the LICF receive an immediate tax deduction, the maximum allowed by law, and can yield significant income and estate tax savings.

LICF offers four types of funds:

Unrestricted funds leave discretion to the LICF’s governing board to use the donor’s gift to meet contemporary needs, forever.

Predicting the future is a risky business. If you want your philanthropy to continue after your lifetime, you're probably concerned whether your gift will meet the unimagined needs of generations to come.

An unrestricted fund is your insurance that your generosity will remain relevant. Future LICF boards and staff—who have a tradition of excellence to stand on — will make grants in your name in perpetuity that effectively deal with contemporary problems.

You can also set up an unrestricted fund now. If you want to give back to Long Island, but don't have the time to research the thousands of nonprofits that work here, our grantmaking staff is happy to do the legwork for you. We know the many needs on Long Island, and we know where private money can make a real difference. After our board approves grants, we'll let you know where they went.

Field-of-interest funds - we make grants to nonprofits to tackle issues of concern to the donor, such as education, affordable housing, or the environment.

Field-of-interest funds are for people who have a particular area of charitable interest. They name the area—such as troubled youth—or choose a more specific focus—such as drug abuse or prevention of teen pregnancy. They might create a fund to benefit the arts, or, as one donor did, further narrow the purpose to support training for talented, disadvantaged young artists.

Then we go to work, researching and preparing a grant spending plan for that field of interest. Our board double-checks proposed grants against your fund's purpose and any other guidelines you've given us. After we make each grant (with a voucher bearing the fund's name), we carefully monitor the results.

The advantage of a field-of-interest fund is that it keeps up with the times.  Many of the issues facing Long Island were not around 40 years ago, and neither were many of the nonprofit organizations addressing these new issues. Therefore, rather than locking your charitable contribution into a few specific charities, a field-of-interest fund will always be able to meet contemporary needs.

Donor-advised funds are legally unrestricted funds, but the donor recommends the organizations to receive grants.

Donor-advised funds allow donors to make grant recommendations to charities of their choice. While the recommendations cannot be binding (under Internal Revenue Service rules, the NYCT board has the final say), we take the suggestions very seriously. Under board guidelines, our staff reviews basic information provided by the charity to ensure that its fiscal affairs are in order and that it is actively serving the public. The NYCT board has established broad guidelines for suggestion approval, assuring rapid processing of each grant, which bears the name of your fund. We take care of all the record keeping and reporting.

Donor-advised funds offer several advantages. They give you:

• the services of professional grantmaking, financial, and investment staff of a $2 billion institution.
• an immediate tax deduction without having to make quick decisions about which charities you want to support.
• the maximum deduction allowed by law.
• the opportunity to build an endowment over time.
• very modest fees.

Designated funds name specific nonprofits to receive grants, subject always to our board’s variance power, which ensures that the fund remains relevant over time.

If you are firmly committed to supporting specific charities, you should consider making your gifts directly to those charities. But a designated fund may be preferable for some donors. You may name the charity or charities you'd like to benefit; we take care of the investments, and regularly pay grants to the charities you've named.

If the charity goes out of business, changes its mission, or should a future board determine that circumstances have changed so as to "render unnecessary, undesirable, impractical, or impossible continued support," we'll redirect funds to other charities without losing time or depleting the fund by expensive court proceedings. This authority of our board, called the variance power, is an attractive feature to donors who have established funds in perpetuity and donors who have set up funds for narrow purposes but understand that the future is unpredictable. A committee of the NYCT board will carefully review the facts before recommending any change to the full board.

LICF donors can establish a fund during their lifetime through outright gift, a variety of deferred payment plans, and by will or trust. This flexible timing maximizes tax benefits and tailors giving to fit into an overall planning strategy. LICF accepts a variety of deferred giving instruments, including a charitable remainder trust as well as gifts of paid up life insurance policies and IRAs. We are glad to discuss proposed contributions with you. We may not be able to accept assets that cannot readily be converted to the financial benefit of charity or that carry unusual potential liability.

LICF provides personal service through our professional staff that is committed to knowing Long Island. The New York Community Trust staff is available to assist donors with information about New York City, national, and international charities.

The Long Island Community Foundation is an operating division of The New York Community Trust, one of the largest community foundations in the country. Established in 1978, the LICF — guided by a BOARD OF ADVISORS composed of community leaders — provides donors with maximum tax savings, professional staff support, in-depth knowledge of Long Island, and permanence within the community. LICF donors benefit from the investment and financial management services of The New York Community Trust, an 85-year-old institution with assets exceeding $2 billion.

What is known to the public as “The New York Community Trust,” is in fact two organizations. The first, The New York Community Trust, is organized as an unincorporated association of trusts. Each component fund is held in trust with a bank trustee that is a member of our Trustees Committee, and every gift instrument incorporates by reference The Resolution and Declaration of Trust creating “The New York Community Trust” (the R&D).

The second entity is Community Funds, Inc., a New York not-for-profit corporation. No bank trustee is required; rather, component funds are invested by money managers retained and overseen by our distinguished Investment Subcommittee.

The two entities share a board and staff and operate as one. They file a combined Form 990 with the Internal Revenue Service.