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Acorn Funds Acorn Funds build charitable endowments in much the same way individuals build retirement plans or investment accounts: through regular contributions invested for growth and income. But there are some significant differences:
"The beauty of an Acorn Fund is that it gives
donors a way to make a big difference with small amounts of money," says
Jon Barsanti, a retired Ernst & Young partner in Milwaukee who
created the Acorn Fund approach. "Prior to the Acorn concept,
there was no vehicle through which donors could contribute small amounts
and allow them to compound. Now, with the advent of changes within
community foundations, we are able to offer people this option." The Community Foundation of Northern Illinois is now offering this option to donors in our area. Donors name their own fund - for an individual, a family, a particular cause, such as the environment or animal rehabilitation, or for the benefit of one or more nonprofit organizations. Donors then make regular, tax-deductible contributions of at least $100 per month, $250 per quarter, or $1,000 annually. Some donors establish Acorn Funds to honor parents, children, or grandchildren, then make contributions to commemorate a special event in the honoree's life. Acorn Funds grow through the reinvestment of interest and dividends. When the fund balance reaches $10,000, the donor can begin making grants from the income. Even nonprofit agencies can set up Acorn Funds, as a way to build endowments over time. "This is a wonderful way to encourage philanthropy in your family or to build your dream of creating a charitable legacy," notes Gloria Lundin, Executive Director of the Rockford Community Foundation. "From seed to mighty oak, Acorn Funds enable donors to make a permanent and positive impact on their communities." How Acorn Funds Work Suppose you start an Acorn Fund today with annual contributions of $1,000 and a goal of providing support for nonprofit organizations in your community. Your can begin to award grants from your fund when it reaches $10,000 in value -- in about 6 years, based on the Foundation's average historical investment returns and assuming you make regularly scheduled contributions. Based on average investment returns, in 20 years your fund will have generated more than $14,000 in grants to your favorite charities and will reach a value of more than $41,000. After 25 years, your Acorn Fund is a mighty oak, having generated more than $50,000 in grants and carrying a value of about $75,000. The growth in grants and fund value will continue forever, helping your favorite charities continue the work that is so important to the quality of life in our communities. Downloads
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