Designated Beneficiary Fund
What is it?

A fund created to provide annual support for one or more designated nonprofit organizations. Assets transferred to the fund are tax deductible and the donor can allocate fund income to the beneficiary organizations in whatever percentage desired.
When is it used? In charitable estate planning, when you have one or more nonprofit organizations you wish to support in perpetuity through a bequest.

When you want to provide annual support to a nonprofit organization, but have concerns about its ability to manage and invest a large endowment gift.

When a nonprofit organization does not want responsibility for endowment management and oversight.

When you wish to use an asset that your preferred nonprofit organization is not equipped to receive or manage.
How does it work? Assets transferred to a Designated Beneficiary Fund are earmarked for support of other charities. Often, a Designated Beneficiary Fund is established as part of a charitable estate plan. Instead of making separate bequest provisions for each charity you wish to remember, you make one provision establishing the fund. The fund agreement identifies your charitable beneficiaries and percentage of the income distribution each is to receive. If you change your mind, it's easy to amend the fund agreement without revisiting your will.

The Minneapolis Foundation has responsibility for investment and management of the fund. If one or more of your designated beneficiaries ceases to exist or can no longer fulfill its mission, The Minneapolis Foundation can redirect that portion of the fund's income to a similar organization.

Designated beneficiary funds are also used when a donor wants to support one or more nonprofit organization using an illiquid asset - perhaps real estate or closely held stock - and the selected charity is not equipped to dispose of the asset. The Minneapolis Foundation can receive the donated asset, liquidate it, and use the proceeds to establish a fund designated for support of the donor's selected charity.
  We're happy to help you find the charitable giving or estate planning option that works best for your situation. We can work directly with you or through your professional advisor. Call us today at (612) 672-3874 or e-mail us at development@mplsfoundation.org.