Foundation‑Owned Beneficiary Funds vs. Agency Funds: Which Is Right for Your Parish, School, or Cemetery?

Catholic institutions across our diocese are asking an important question: How do we protect the resources entrusted to us while ensuring they grow for the future? Whether you’re responsible for a parish, school, or cemetery, the need for long‑term financial stability has never been greater.

Two of the most effective tools available through the Catholic Foundation of Southern Minnesota are Foundation‑Owned Beneficiary Funds and Agency Funds. Both help you steward your assets wisely. Both provide professional investment management aligned with Catholic values. And both strengthen the long‑term mission of your institution.

But they serve different purposes. Understanding those differences will help you choose the right fit.

What Is a Foundation‑Owned Beneficiary Fund?

A Foundation‑Owned Beneficiary Fund is a fund legally owned by the Catholic Foundation but established for the benefit of a specific parish, school, cemetery, or ministry.

Key Benefits

• Strongest long‑term protection
  Because the Foundation owns the fund, it cannot be redirected, dissolved, or spent down by future leadership changes at the parish or school.
• Clear donor confidence
  Donors appreciate knowing their gift is permanently safeguarded and professionally managed.
• Ideal for endowments and legacy gifts
  This structure is especially helpful when donors want assurance that their gift will support your mission in perpetuity.
• Aligned with Catholic investment guidelines
  All assets are invested according to USCCB guidelines.

Best For

• Endowments
• Long‑term ministry funds
• Cemetery perpetual care
• Donor‑restricted gifts
• Parishes or schools seeking maximum protection and stability

What Is an Agency Fund?

An Agency Fund is a fund owned by the parish, school, or cemetery but managed by the Catholic Foundation. You retain ownership and full discretion over the assets, while the Foundation provides investment expertise and Catholic‑aligned stewardship.

Key Benefits

• You retain ownership
  The assets remain on your books and can be accessed when needed.
• Professional investment management
  You receive the same disciplined, mission‑aligned investment oversight as Foundation‑owned funds.
• Flexible for short‑ and medium‑term needs
  Ideal for capital projects, reserve funds, or savings you want to grow responsibly.
• Simplifies administration
  The Foundation handles investment oversight, reporting, and compliance.

Best For

• Capital campaign proceeds
• Building or maintenance reserves
• School operating reserves
• Cemetery operating funds
• Any fund you may need to access periodically

How Are They Similar?

Both fund types offer:

• Catholic‑aligned investment management
• Professional oversight and reporting
• Access to the Foundation’s investment pools
• Long‑term growth potential
• A partnership that strengthens your mission

In other words, both are excellent tools — the difference lies in ownership, access, and long‑term intent.

How Are They Different?

Here is the simplest way to think about it:

Foundation‑Owned Beneficiary Fund	Agency Fund
Owned by the Foundation	Owned by the parish, school, or cemetery
Designed for long‑term or permanent support	Designed for flexible access
Strongest protection for donor intent	Maximum control for the institution
Ideal for endowments and legacy gifts	Ideal for reserves and project funds
Cannot be spent down without following the fund agreement	Can be accessed as needed by the institution

Both are good. They simply serve different purposes.

Questions to Help You Decide

If you’re unsure which fund type is right for your institution, these questions can help clarify your direction:

1. What is the purpose of the fund?

• Long‑term or perpetual support → Beneficiary Fund
• Short‑ or medium‑term needs → Agency Fund

2. How important is long‑term protection?

• Want to safeguard donor intent permanently → Beneficiary Fund
• Want flexibility and access → Agency Fund

3. Will donors contribute to this fund?

• Donor‑restricted or legacy gifts → Beneficiary Fund
• Internal savings or reserves → Agency Fund

4. Do you want the fund on your balance sheet?

• Yes → Agency Fund
• No → Beneficiary Fund

5. Are you building an endowment?

• Yes → Beneficiary Fund
• Not yet or not sure → Agency Fund

Conclusion: Two Strong Options, One Mission

Both Foundation‑Owned Beneficiary Funds and Agency Funds help Catholic institutions protect their resources, grow their assets, and strengthen their mission. The right choice depends on your goals, your timeline, and the level of protection or flexibility you need.

If you’re discerning which fund structure best fits your parish, school, or cemetery, the Catholic Foundation of Southern Minnesota is here to help you think it through. Together, we can build a future where your mission is not only sustained, but strengthened for generations.

Reach out to us today.