A community foundation is a vehicle for people of all means to make a lasting difference in their community. The central purpose of a community foundation is to serve the needs and philanthropic aims of donors who wish to better their community, now and in the future. Community foundations do this by providing donors with flexible, efficient, and tax-effective ways to ensure their charitable giving achieves the greatest possible impact.
The concept of a community foundation is as ingenious as it is simple - it is a means to build community resources dedicated for charitable purposes, over time, potentially creating endowment funds for program sustainability.
Because endowed funds are never spent, they are permanently invested to produce income. The income earned is then used to help meet the community's charitable needs. So, gifts to a community foundation continue to benefit a community forever.
A community foundation does not usually conduct programs of its own. Instead, it supports new or existing programs of other nonprofit organizations and agencies. It can also serve as a neutral convener, bringing diverse opinions and players together for the good of the whole community. A community foundation's principal function remains serving donors and their community.
Donors may set up individual funds in their name or the name of a loved one and have as little or as much control as they wish in determining which charities benefit from the fund. Or a donor may choose to contribute to various existing funds to serve particular purposes.
A community foundation is governed by a local board of directors chosen for their knowledge of the community and designed to be representative of a broad cross-section of the community. The directors further possess expertise in the many areas of management necessary to carry out the stewardship functions of the foundation.
A community foundation is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. All contributions are tax-deductible to the maximum amount allowable for gifts to a public charity. Community foundations are classified as public charities under the tax code. Some donors can claim larger tax deductions on gifts to community foundations than gifts to their own private foundations.
A community foundation represents a wide variety of ideas and interests of individual donors who have united in a common purpose - bettering their community both now and in the future. Whatever the charitable intentions, there are ways to achieve them through gifts to a community foundation.
