Community Foundations

Community foundations are grantmaking public charities that are dedicated to improving the lives of people in a defined local geographic area. They bring together the financial resources of individuals, families, and businesses to support effective nonprofits in their communities. Community foundations vary widely in asset size, ranging from less than $100,000 to more than $1.7 billion.

Community foundations play a key role in identifying and solving community problems. In 2011, they gave an estimated $4.3 billion to a variety of nonprofit activities in fields that included the arts and education, health and human services, the environment, and disaster relief. The Community Foundations National Standards Board confirms operational excellence in six key areas—mission, structure, and governance; resource development; stewardship and accountability; grantmaking and community leadership; donor relations; and communications. Foundations that comply with these standards can display the official National Standards Seal. Right now nearly 500 community foundations have earned the seal.

More than 750 community foundations operate in urban and rural areas in every state in the United States; currently, more than 570 belong to the Council on Foundations. The community foundation model also has taken hold around the world. According to the 2010 Community Foundation Global Status Report, there are 1,680 community foundations in 51 countries. Forty-six percent exist outside of the United States. You can use our Community Foundation Locator to view a list of community foundations in the United States.

Below is everything on our site for community foundations. You can use the filtering options on the right to narrow these results.

Since the terrorism attacks of September 11, 2001, grantmakers and other charitable organizations have become quite familiar with the work of the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) in the area of anti-terrorism concerns. OFAC has been one of the key U.S. government agencies seeking to shut down terrorism funding around the world and, in conducting that activity, has focused considerable attention on charities.

Since the November 7, 2002 publication by the United States Department of the Treasury of its “Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities,”1 grantmakers have grappled with the problem of how to comply with their legal obligations under Executive Order 13224, the USA Patriot Act, and other laws and regulations that prohibit financial transactions with terrorists and their supporters.2 The Treasury Guidelines map out one route to compliance, but both grantmakers and operating charities have criticized them for failing

In existence since the 1930s, donor advised funds have been one of the fastest growing charitable giving vehicles of the past decade.[1] Capitalizing on this growth and on the increasing interest in international philanthropy among donors in the United States, a number of public charities have developed expertise in international grantmaking and have offered donor advised funds as a giving vehicle to individual donors, companies, and foundations.

This list highlights some of the ways that private foundations and public charities (including community foundations) may engage in public policy without lobbying. Public charities have further flexibility and may engage in lobbying activities not described below.

1.Direct communications with legislators or their staff about a general issue of concern. To use this lobbying exception these direct communications may not either refer to specific legislation or legislative proposal, or if specific legislation or proposal is referenced, no view may be expressed on such legislation.  

As organizations that seek to do good, community foundations understand the problems and needs in their communities and address these needs by raising funds and awareness. However, beyond grantmaking and charitable opportunities, you can benefit your community—as well as the charitable field—by participating in the public policy process. As a leadership organization and a community expert, you have a powerful voice that can create far more impact than any one grant or program you offer.

Grantmakers can legally participate in the political process by following guidelines established by the IRS. Here are some tips.

The Treasury regulations that limit lobbying make no specific reference to community foundations. Thus, the rules generally applicable to all public charities apply to community foundations, and those rules will differ accordingly depending upon whether or not a community foundation has elected to be treated by the "expenditure test."

If the community foundation elects, all actions excluded from the lobbying definition may be carried out in-house by a community foundation without fear of any legal violation, and the special exceptions to the lobbying rules will apply.

Sabbaticals are not too uncommon in the nonprofit world for foundation executives or senior management. It can be a useful time to reflect on past accomplishments, revitalize, and gain renewed inspiration for future work. Sabbaticals for board members likewise can have similar positive effects but should be approached with care.

When to Think Twice

This article focuses on conflicts of interest around foundation investments. May foundation board members (or other closely affiliated individuals or businesses) manage foundation investments? May they be paid for this service? What factors should foundation managers consider before they select an investment manager who has a close relationship with the foundation? When is it a bad idea? What special procedures should be followed when a board member or other close affiliate is also an investment manager.

With Congress and the media focusing on corporate governance and foundation administration, it is a good time to make sure that all grantmakers have a strong conflict of interest policy in place. Both private foundations and public charities (such as community foundations) should have clear guidelines on financial or other interests that must be disclosed and transactions that must be scrutinized or avoided. The policy should cover both board members and foundation staff.

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