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When a public charity establishes an agency endowment at a community foundation, which organization owns the contributed funds?

April 26, 2017agency charity endowment establishes foundation organization owns public

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When a public charity establishes an agency endowment at a community foundation, which organization owns the contributed funds?

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The community foundation has legal ownership of funds contributed to an agency endowment. As such, the community foundation’s board has fiduciary responsibility over the funds. The legal ownership of the funds is a frequent a source of confusion between agencies and community foundations. Therefore, the ownership should be clarified in the fund agreement at the start of the relationship. The confusion arises, in part, because accounting rules (FAS 136) require that an agency recognize a beneficial interest in assets held by a community foundation as an asset on the agency’s books. This leads some agencies and their advisors to believe they maintain legal ownership over the funds. However, FAS 136 only affects the accounting treatment of the funds, not the legal ownership.