Community foundations are grantmaking public charities dedicated to improving the lives of people in a defined local geographic area They bring together the financial resources of individuals, families, and businesses to support nonprofits in their communities Community foundations vary widely in asset size, ranging from less than $100,000 to more than $5 billion
Unique Attributes of Community Foundations
Community foundations play a key role in pursuing ways to make donations of all sizes have a larger and longer impact than they would otherwise have on their own. Community foundations serve as vital hubs for philanthropy, bringing together donors and local organizations to address community needs, foster impactful change, and build a stronger, more resilient community
The Community Foundations National Standards Board confirms operational excellence in six key areas mission, structure, and governance; resource development; stewardship and accountability; grantmaking and community leadership; donor relations; and communications Foundations that comply with these standards can display the official National Standards Seal
The First Community Foundation
A banker, Frederic Goff, established the first community foundation in Cleveland, Ohio, in 1914 His goal was to create a permanent endowment that would benefit the citizens of greater Cleveland for years to come More than a century later, The Cleveland Foundation awards grants worth over $100 million each year to a variety of projects and programs in that region
Today, there are nearly 800 community foundations operating in the United States.
Grantee Encuentro
About Our Community Foundation
Community is Our Foundation
Albuquerque Community Foundation administers a permanent community endowment composed of many gifts, large and small, and uses the earnings from the endowment to make grants to other nonprofit organizations Since our establishment in 1981, our total grant distributions are nearly $102 million, and we have funded over 14,000 grants to nonprofit organizations serving the Greater Albuquerque Area Our mission is to serve our community by mobilizing and stewarding resources to create equitable opportunity for all We pursue ways to make donations of all sizes have a larger and longer impact than they would otherwise have on their own
Our Values
Trust
We work to build relationships based in authenticity, actionable change, adaptability, and cultural humility
Unique Features
Personalized Service
For individuals, families, and private foundations, we offer efficient stewardship of their philanthropic funds, professional grantmaking and due diligence, and the most generous tax benefits provided by law
We will address ongoing injustice and work to change systems of oppression and harm
We commit to providing high quality service with humility and respect
Equity Integrity Accountability
We will be responsible for and transparent in all the ways we learn, strive, and adapt in our journey toward becoming our community’s foundation
Local Expertise
Our professional staff has an in-depth understanding of the nonprofit work, opportunities, and resources that shape our community We monitor all areas of community need and can help you learn more about the organizations and programs doing good work in the areas you care about
Community Leadership
We are focused on bringing people and organizations together to address local work and opportunities Community is our foundation
Endowment
Investing in the community, forever.
An endowment refers to a financial asset or donation that is invested with the goal of providing grantmaking in perpetuity The principal amount of the endowment is typically preserved, and a portion of the investment returns is used to fund specific activities, such as supporting an organization, funding scholarships, or maintaining a charitable cause. Endowments are often established by donors, businesses, or organizations to ensure the long-term sustainability of their philanthropic efforts.
How it Works
Endow your gift to Albuquerque Community Foundation in the minimum amount of $25,000 ask us about options for making gifts over time and adding up to the minimum amount.
The principal of your fund is never spent. The fund will grow over time to generate an increasing stream of funding devoted to your interest areas and the community Earnings are used to make grants that meet community needs Your gift and all future income from your gift is a permanent source of community funding in perpetuity
We handle all the administrative details You receive tax benefits for the year your gift is made
Your Legacy of Giving
When you choose to endow your gift, you can make a difference during your lifetime and provide for the community for generations to come As needs change over time, your original intent is preserved
A Nonprofits Source of Stability
Leaders of a nonprofit organization may also look to Albuquerque Community Foundation to hold their organization’s endowment to create a constant source of funding Earnings can be used for whatever the organization decides
Together for Greater Impact
Gifts endowed by Albuquerque Community Foundation are pooled with others to achieve maximum investment efficiency and return. They grow and benefit the community with guidance from experienced local leaders and expert investment managers.
Grantee Manzano Mountain Art Council
Donor Advised Funds
Donor Advised Funds keep giving personal, long after you’ve made your gift Establish a fund, and make ongoing suggestions for how grants from that fund are used to improve life in our community
How it Works:
Make a gift to the Albuquerque Community Foundation - you can give cash, appreciated stocks, real estate or other assets
We set up a special fund in your name, in the name of your family or business, or in honor of any person or organization you choose
You receive tax benefits in the year your gift is made
You recommend uses for the fund - working with our professional program staff to support the causes and organizations you care about most
Your recommendations go through a due diligence process conducted by the Community Impact department and are presented to our community foundation board for approval
We handle all the administrative details and issue grants to charities in the name of the fund you establish (if you prefer, grants can be made anonymously)
Earnings from your fund are used to make grants that benefit the community Your gift - and all future earnings from your gift - is a permanent source of community capital, helping to do good work forever
Endowment Fund Administrative Fee Schedule
Endowment Funds
All endowment funds of the Albuquerque Community Foundation are combined for investment purposes and allocated their pro rata share of the investment income, net of the investment fee. The Foundation maintains the same investment strategy for all funds.
Administrative Fees
Each fund shares the cost of a professional staff, along with the cost of investment advice provided by the combined expertise of the Foundation’s Investment Committee, investment consulting firm, and fund managers providing the services of a multi-million dollar foundation to individuals, families and organizations The Foundation monitors a fund’s investments, pays out grants from the income, files the tax return (if applicable), and handles all other administrative requirements Administrative fees are charged quarterly
Donor-Advised Fee Schedule:
From $0 to $25,000 (Grow a Fund)
Above $25,000-$1,000,000
Above $1,000,000 to $2,500,000
Above $2,500,000 to $5,000,000
Above $5,000,000
Student Aid Fee Schedule
From $0 to $50,000 (Grow a Fund)
and above
Field-of-Interest Fee Schedule
From $0 to $25,000 (Grow a Fund)
Above $25,000-$1,000,000
Above $1,000,000 to $2,500,000
Above $2,500,000 to $5,000,000
Above $5,000,000
For example, the annual administrative fee for a fund with an average balance of $4,000,000 would be computed as follows: the first $1,000,000 at 1.50%, the next $1,500,000 at 1.25%, and the remaining $1,500,000 at 1.00%, for a total annual administrative fee of $48,750 or 1.22%
Benefits of a Donor-Advised Fund
If you are looking for a highly personal way of giving without all the guidelines, responsibilities and costs of establishing a family foundation, a Donor-Advised Fund could be right for you
Donor Advised Funds vs Private Family Foundations
Set-Up Procedure
Initial Costs
Ongoing Costs
Closely held stock
Simple agreement, set up by ACF staff in a short time period
Must incorporate and apply for IRS tax-exempt approval
$250 one-time set up fee A range of fees
Pooled administration fee to lower costs
Up to 50% of adjusted gross income
Up to 30% of adjusted gross income
Deduction at fair market value
Up to 30% of adjusted gross income
Up to 20% of adjusted gross income
Deduction limited to basis
ACF
Donor-Advised Funds
Private Family Foundation
Grantmaking
Grant management
Distribution requirements
ACF staff educates donors on community needs, and provides information on qualified giving opportunities
ACF verifies potential grantee’s tax status and does due dilligence on organizations
No distribution requirements. Donors can make grants at their di ti
Must research and identify agencies and/or programs to fund
Must ensure all recipients are qualified 501c3 organizations
Required distributions must be made, regardless of the Foundation’s investment gains or l
Investment Management
Serve a broad range of charitable purposes in the Greater Albuquerque Area
Albuquerque Community Foundation is a public foundation established in 1981 to serve a broad range of charitable purposes in the Greater Albuquerque Area. Because we expect to operate in perpetuity, wise stewardship of the funds entrusted to the Foundation is essential to its mission. Therefore, the Board of Trustees of the Foundation has adopted policies and procedures to ensure its accountability to donors, beneficiaries and Greater Albuquerque
The Foundation structured its investment philosophy around the concept of complementary Investment Managers who are responsible for specific asset categories and management styles In implementing its philosophy, the Foundation uses separate accounts, commingled funds, and mutual funds to accomplish its objectives Management of the funds is a long term responsibility Therefore, long-term objectives of at least 20 years’ duration are the standard to be observed
Our investment strategy is to be invested for the long-term with a full diversification through all viable investment categories This means that some years will have negative return, but our philosophy is that over the long term, this will result in stronger returns We consider our portfolio’s performance to be highly competitive For the calendar year 2023, the total return was 8.87% net of fees.
Investment Management
Serve a broad range of charitable purposes in the Greater Albuquerque Area
Philosophy
The central objective of our investment philosophy is to provide a stable and increasing stream of income for our funds’ charitable beneficiaries. Long-term, full diversification through all viable investment categories is desired in order to eliminate dependence on one or two categories, which is an approach that could adversely impact returns.
This means that some years will have negative returns, but our philosophy is that over the long term, this will result in stronger returns We consider our portfolio’s performance to be highly competitive For the calendar year 2023, the Foundation’s total return was 8 87% net of fees
Investment Committee
The Investment Committee of the Foundation consists of 10 members, with at least three members appointed from the Board of Trustees. Other Investment Committee members (those not also on the Board) serve at the discretion of the President of the Board of Trustees, who appoints all Investment Committee members. Members serve three-year terms and may serve a maximum of three consecutive terms. The Investment Committee meets at least on a quarterly basis to review investment performance, asset allocation, and all other matters related to fiduciary oversight of investment assets.
Investment Objective
The objective of the total return investment management program is to produce growth and income sufficient to support both donor goals and fund objectives Specifically, the long-term objective shall be a total return (the sum of earned interest and dividends and realized and unrealized gains or losses less all investment management costs) greater than or equal to the administration fees plus the product of the current principal amount multiplied by the sum of the rate of inflation (as calculated based on the Consumer Price Index) and 4 0% Significant emphasis is placed upon the preservation and enhancement of the purchasing power of the amount of principal assets in the investment account
Distribution of Funds
Our distribution policy recognizes the inherent conflict between serving current community needs while maximizing the growth of Foundation assets The current annual distribution percentage is 4 0% of the average balance (during the fiscal year) of each fund
Investment Management
Serve a broad range of charitable purposes in the Greater Albuquerque Area
Investment Consultant
The Investment Committee has engaged an independent investment consulting firm to assist the Committee’s activities The Consultant is expected to be proactive in recommending changes in investment strategy, asset allocation, and Investment Managers as situations warrant change
As of November 1, 2016, the Foundation began utilizing the services of RVK RVK is registered with the SEC under the Investment Advisors Act of 1940 as an Investment Advisor with no affiliation with any bank, brokerage firm, or money manager.
Established in 1985, RVK is one of the few remaining full-service investment consultants that is 100% employee owned and solely focused on non-discretionary strategic investment consulting. RVK maintains a strict, no-conflict of interest policy that is well known throughout the investment community Client fees are the only source of revenue for the firm RVK has extensive experience serving endowment and foundation clients and currently serves several other endowments and foundations in New Mexico, in addition to the Albuquerque Community Foundation RVK serves as a trusted advisor committed to exceptional and proactive client service with a long-term investment focus
RVK will work with the Foundation to design and deliver a portfolio tailored to the funds’ mission-critical objectives and tolerance for volatility and strives for the portfolio with the highest return for the level of acceptable risk
Asset Allocation
The Investment Committee has evaluated the various investment asset classes available, considering the historical rates of return and relative levels of risk associated with each The Investment Committee recognizes that, over the long-term, the allocation among various asset classes may be the single most important determinant for investment performance An asset allocation policy was developed using appropriate best practice tools such as a mean/variance optimizer or other tools as appropriate
Asset Allocation Policy amended March 2023:
Target Range
Investment Performance
Investing in the community, forever.
Annual Rates of Return
The Albuquerque Community Foundation changed its fiscal year end from June 30 to December 31 in 2008 From 1990 through 2007, the fiscal year period is July 1 of the previous calendar year through June 30 Beginning in 2008, the fiscal year period is January 1 through December 31
*This represents the return for the eighteen-month period of July 1, 2007 through December 31, 2008 The twelve (12) month return for July 1, 2007 through June 30, 2008 was 1% (The average return for the Foundation’s peer group for the same period was
) The six (6) month return for July 1, 2008 through December 31, 2008 was –23 8%
Average Returns (through December 31, 2022)
Spending Policy
Fund’s Distribution Amounts: Allocation of Earnings and Fees
Albuquerque Community Foundation recognizes the inherent conflict between serving current community needs while maximizing the growth of the Foundation assets. In seeking to maintain a balance between these diverse objectives, the Foundation has adopted the following rules, which constitute its Spending Policy, for determining funds’ distribution amounts:
Except as provided below, the recommended standard spending policy will be 4 0% of the time-weighted average balance of each fund for the previous twenty quarters. If a fund does not have historical fund balances for twelve quarters, then its distribution amount shall instead be calculated based on the total number of historical quarterly balances that the fund has, until such time as it has a twenty-quarter history; provided, however, that a fund generally must have a minimum of four historical quarters before a distribution is made A fund’s time-weighted average balance will be computed by averaging the fund’s monthly ending balances, after allocation of investment gains or losses, and fees, during each quarter, and then averaging the quarter-ending balances The Foundation will allow nonprofit organizations to receive a distribution up to 5.5% of the time-weighted average balance of a fund. Nonprofit organizations which want to take a distribution higher than the recommended standard spending policy must contact the Foundation to discuss the decision The nonprofit organization Board Chair would be required to sign a form acknowledging the discussion of its options and must attach the nonprofit’s board minutes which show the board approved decision Donor-advised and organization fund agreements allow additional distributions above the 4 0%, with certain conditions as detailed in the agreements
If provided for in the endowment agreement or other gift instrument, a distribution may be made during the first twelve months following the establishment of a fund The distribution percentage can be modified by a vote of twothirds of the Trustees by May 31st of any year Investment gains or losses from pooled investment accounts are allocated to each endowment fund on the last day of each month The allocation is determined by dividing each fund’s daily average number of units for the month by the total of the daily average of all units in the pool and applying this fraction to the earning/losses in the investment accounts for the month. Any remaining distributions will be added to principal for purposes of determining distributions the following calendar year. The management fee will be charged quarterly based on the time-weighted average balance of each fund after allocation of investment gains or losses
Why Fees?
The Foundation is a tax-exempt public charity primarily serving the Greater Albuquerque area.
The Foundation encourages philanthropists to easily and effectively support the impact areas they care about through a variety of charitable instruments immediate and planned. We invest the endowment pool for a targeted average annual return of 5 2% plus CPI The central objective of the Foundation’s investment philosophy is to provide a long-term total return that covers all fees, the Consumer Price Index and facilitates the distribution of a certain percentage of the time-weighted average balance of each fund each year (per the Foundation’s Spending Policy)
The Foundation offers excellent endowment management for a modest fee. For an endowment fund of up to $1,000,000, the Foundation’s annual management fee is 1 5% of the average daily balance of the fund The fee is assessed quarterly This fee is much lower than the cost of creating and administering a separate private or public foundation Management fees for organization funds are calculated differently
Approximately 50% of the Foundation’s operating budget is supported by management fees. Each fund shares the cost of a competent staff providing the services of a multi-million dollar foundation to donors whose funds may start with as little as $10,000 Each endowment fund is also allocated its proportionate share of the investment consultant fee which is currently approximately 0 155% The management fee and investment consultant fee are shown on the fund statements mailed quarterly
All of the Foundation’s investments are managed by outside advisors. The investment returns of the funds reflect payment of those advisors’ fees. Currently, these fees are approximately .957%. These various fees enable the Foundation to provide the high-quality customer service, financial acumen and investment performance philanthropic donors deserve
Variance Power
A unique attribute of community foundations granted by the IRS
By United States Treasury Regulation,
the governing body of a community foundation must have the power to modify any restriction or condition on the distribution of funds for any specified charitable purpose or to any specified organization if, in the sole judgment of the governing body, such restriction or condition becomes, in effect, unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community or area served. The governing body must be able to modify the restriction without obtaining the approval of any participating trustee, custodian, or agent of the community foundation
This requirement is commonly referred to as the “variance power” and has historically been the hallmark of community foundations: the ability of the governing body to exercise the function of cy pres without having to first obtain court approval. Under cy pres, a court will change the purpose of a charitable trust to the nearest similar purpose when the trustor’s purpose cannot be achieved because it is impossible, impracticable, or illegal The standards which the regulations set forth for when a governing body should exercise the variance power are slightly broader than the standards that a court would use when exercising the doctrine of cy pres An advantage of allowing a community foundation to make the change is that it, unlike a probate judge, is a charitable specialist and it is better able to identify the best charitable use of the funds for the community.
The easiest case for exercising the variance power is when a charity that was the beneficiary of a designated fund goes out of existence Through its monitoring function, a community foundation can exercise the variance power if it determines that a charity has significantly changed the nature of its operations It can also exercise the variance power if an activity is no longer a worthy charitable purpose (e g , a trust to fund research to find a cure for polio or AIDS after such a cure is found).
Our Staff
Meet the People of Albuquerque Community Foundation
We are the people who are proud to partner with our community to make a difference
We employ a highly skilled staff with two things in common:
A passionate belief in the Albuquerque community and in the power of local people to achieve a brighter future
A commitment to personally collaborate with our donors and organizations using the most effective and financially prudent approach available
With extensive knowledge of Albuquerque and its changing needs, our staff members are partners with you in your charitable and community goals
Meet the People of Albuquerque Community Foundation
Our Board of Trustees is composed of investment professionals, small business owners, community leaders, foundation directors and corporate CEOs who share one central goal: to fortify the well-being of the Albuquerque community
The Board of Trustees governs the organization, establishes policy, collaborates with staff to set priorities and approves grant recommendations All members are volunteers and invited to serve by the Foundation’s Governance Committee Trustees serve three-year terms and can serve up to a total of nine years
Foundation trustees are extraordinarily committed to building a strong community and are an active partner in our work at the Foundation
