What Is A Community Foundation?
Community foundations are tax-exempt public charities serving thousands of people who share a common concern-improving the quality of life in their area.
Individuals, families, businesses and organizations create permanent charitable funds that help their region meet the challenges of changing times. The foundation invests and administers these funds.
All community foundations are overseen by a volunteer board of leading citizens and run by professionals with expertise in knowing their community's needs.
A Growing Aspect of Philanthropy
Community foundations make up one of the fastest growing sectors of philanthropy in the United States today. Community Foundations build and strengthen communities by making it possible for a wide range of donors participate in creating permanent (and often named) funds to meet present and future needs. Community foundations have become catalysts for improvement within urban centers and in rural settings through philanthropy that is visionary, diverse and inclusive.
Community foundations are a sustainable aspect of philanthropy - providing leadership and problem solving in the present and preparing for the future with a permanent endowment.
There are nearly 700 community foundations in the United States and there are more than 90 community foundations and geographic affiliates in Michigan alone. The community foundation model has spread throughout the world. There are at least 470 community foundations in 41 countries outside the United States, with at least another 140 in development around the world.
Assets
Community foundations in the United States hold approximately $35 billion in assets and are located throughout the country. In 2003, community foundations gave grants of more than $2.5 billion to a wide variety of nonprofit activities, including urban affairs, the arts, education, environmental projects, health care and disaster relief.
A Focus on Service
Differentiating a community foundation from other philanthropic options is a high degree of personalized service for donors.
Foundation development staff routinely works with families and professional advisors to design gift plans that fit every situation and donor preference, ensuring that philanthropists receive the most benefit from their charitable contributions. Program staff conducts research, analyses and site visits to ensure that philanthropic dollars are maximized and well-used.
Gifts of All Sizes and Shapes
Community foundations can easily accept gifts of various sizes and types from private citizens, corporations, government agencies and other foundations. Nearly every type of gift-including real estate, closely held stock and artwork-can be contributed to a community foundation. Gifts are frequently made through bequests and also by living donors through various types of funds and deferred giving vehicles. In most cases, a gift to a community foundation is made part of a permanent endowment and thus the intention, the asset and the name of the donor are preserved forever.
Community Foundations
- know their communities
- help you achieve superior tax benefits
- make set-up and administration easy
- share your interests
- care about the future
A Brief History of Community Foundations
1914
The first community foundation was established in Cleveland, Ohio. Within five years, community foundations formed in places like Chicago, Boston, Milwaukee, Minneapolis, Rhode Island, and Buffalo.
Growing Years
In the years that followed, other local community foundations were established, and hundreds of thousands of individuals across the United States – from all economic backgrounds – joined with their local community foundations to create permanent charitable funds to meet the needs of their communities.
1931
The first Donor Advised Fund was established by a community foundation in Winston-Salem, North Carolina.
1969
While many factors contributed to the rapid growth of community foundations, one strong impetus was the Tax Reform Act of 1969. These changes resulted in private foundations becoming more strictly regulated and made community foundations a more attractive option for many donors, primarily because:
Lifetime gifts of certain kinds of appreciated property, such as real estate and interests in closely-held businesses, to a community foundation can be deducted at full fair-market value.
The annual deduction limit for individual gifts is higher for a community foundation gift than for those to a private foundation.
Community foundations also are free from excise tax and other requirements that apply to private foundations, enhancing their appeal to many donors.
Today
There are more than 650 community foundations serving urban and rural communities throughout the United States. Collectively we hold approximately $31 billion in combined assets and make local grants of approximately $2.6 billion annually. And we're growing fast!
The community foundation concept is also rapidly expanding worldwide with over 365 community foundations in 37 countries outside the United States. Find out more at www.wings-cf.org.
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