If Big Money Comes, Foundation Is Ready
North Central charity forms 'supporting foundation'
far, the foundation has never received a single gift so big that it dwarfs the rest of its assets, but if that ever does happen, it is now prepared to handle the windfall.
Keeping It In The Community
Late last year, the foundation created a new "supporting foundation," an entity that, among other things, makes it possible to accept any huge donations that come its way.
"Community foundations have to meet certain tests," said Foundation Board Chairman Thomas Bagley III, president of Anderson, Bagley & Mayo Insurance Agency in Leominster. "If most of your funds come from one individual, all of the sudden you're no longer a community foundation, you're a private foundation."
Bagley said the Fitchburg-based foundation, which is itself an offshoot of the United Way of Central Massachusetts, decided to create the new entity after researching common practices in community foundations.
Besides making it possible to accept large gifts, the supporting foundation helps deal with possible liability issues. If the foundation received a gift of income-generating property, for example, Bagley said, it could accept it through the supporting foundation without letting any liability for the real estate affect the main foundation.
"We did it for strategic purposes, and it just made sense to do it," he said. "We don't have anything on the horizon that we expect to come in as a result."
Bagley said the possibility of big or unusual gifts is increasing as the foundation becomes better known. He said many local individuals and families are already using the organization to distribute funds to worthy causes through "donor-advised" grants. The donor-advised distribution system can take the place of traditional private foundations, allowing a philanthropist to receive tax benefits from a gift to the foundation in one year and help distribute funds to various causes for many years to come.
"In six years, obviously, we've come a long way," Bagley said.
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