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.

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Foundation recordkeeping is an inherently dull topic—unless it’s done wrong. The foundation manager who has not kept adequate documentation regarding expenditure responsibility grants will surely find an IRS audit more exciting than he might like. Similarly, a foundation manager confronted with a trustee succession battle will find the situation even more nerve-racking if she cannot put her hands on copies of the minutes of the meeting held years ago at which the succession issue was addressed and resolved.

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.

On May 30, 2014, the Urban Institute’s Center on Nonprofits and Philanthropy conducted a survey of donor advised funds (DAFs) operated by community foundations. All community foundations with total assets of $5 million or more were invited to take the survey. When the survey closed on June 20, we had received complete or partial responses from 328 of the 607 eligible foundations. The results reported here are based on the 269 foundations (44.3%) that responded to most of the required questions on the survey.