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.

This booklet focuses on how donor-advised funds at community foundations strengthen and improve American communities. These funds are also versatile tools that other charitable organizations effectively employ to provide support to communities with shared interests in the arts, education, health, religion, and social services both inside and outside the United States.

This handy flowchart can help foundations determine which funds should be classified as donor advised under the Pension Protection Act of 2006.
Remember, a fund is only a donor advised fund if:

  • A donor or person appointed or designated by the donor has, or reasonably expects to have, advisory privileges with respect to distributions or investments;
  • The fund is separately identified by reference to contributions of donor(s); and
  • The fund does not fall within an exception established by the Act.

The Pension Protection Act (PPA) was signed into law by President Bush on August 17, 2006. The PPA was designed to improve pension plan funding requirements of employers, as well as 401(k), IRA and other retirement plans. The PPA also included numerous provisions that affect charitable giving.

The legal and tax implications for community foundations accepting donations from private foundations, and qualifying distributions of taxable expenditures. Additional insight into converting a private foundation into a supporting organization of a community foundation.

Most states have registration and/or reporting laws that apply to nonprofit organizations soliciting contributions within the state. Information about registration is available through individual states or the Multi-State Filer Project.

Community foundations occasionally consider conducting a raffle as a way to raise money for a particular fund. The plan may be to do a raffle as a standalone fundraiser or as part of another community foundation event. In many cases, donors approach community foundations asking to conduct the raffle on their own. Whether the raffle is run by the foundation or by interested donors, here are some key issues to think through in advance to ensure compliance with applicable rules.

Historical information around non-component and donor-directed funds.

Community foundations occasionally receive a request for money back from donors of advised funds and organizations that have established designated funds or agency endowments. This article discusses why the proper answer is a firm "no"—and some polite ways to communicate the community foundation's policies. The community foundation need not and should not refund donors' and designees' funds, and it should be clear from the start of any relationship that transfers to the community foundation are irrevocable.

Community foundations are often faced with requests from donors or local volunteers who wish to express their support by raising money for the community foundation or for a particular fund. Allowing individuals or a group of volunteers to engage in fundraising activities on behalf of the community foundation (a practice called donor-initiated fundraising) can be a great way to increase foundation assets and boost name recognition in the community. However, this approach to fundraising also comes with risks.

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