Some funds are created to honor an individual or as a memorial to the memory of a loved one. Other funds are created by living donors and bear their names. Nonprofit organizations may create a fund to start a special projects or endowment fund. Donations may be made to many of these funds. Bequests to the Foundation are not subject to estate or inheritance taxes, thus ensuring the maximum benefit a donor's charitable fund.
Community foundations are often beneficiaries of complex deferred-giving arrangements.
One of the most commonly deferred gifts is the Split Interest Trust which is a trust fund established by will or bequest in which the income or assets are simultaneously split among one or more beneficiaries. Other arrangements can include Charitable Remainder Trusts and Charitable Lead Trusts . Charitable Remainder Trusts enable donors to transfer assets to a trustee to be held on behalf of specified beneficiaries during the trust's lifetime. An immediate federal tax deduction for the year the trust is established is received by the donor, subject to limitations by federal statutes. Distributions of income from the trust are made to beneficiaries for the life of the trust.