What is a Community Foundation?
There are so many worthy causes in need of help. But where do you start? Your Community Foundation has the answer.
A community foundation is a tax–exempt, nonprofit, autonomous, publicly supported, nonsectarian philanthropic institution with a long–term goal of building permanent, named component funds established by many separate donors to carry out their charitable interests and for the broad–based charitable interest of and for the benefit of residents of a defined geographic area, typically no larger than a state.
Community foundations are conveners and leaders in their communities – they help identify solutions to community issues then leverage the resources of individuals, families, and businesses to support projects and initiatives led by high-impact local nonprofits. Community foundations pursue the long-term goals of:
BUILDING permanent, component funds established by many separate donors to carry out charitable interests;
SUPPORTING broad-based charitable interests and benefitting the residents of a defined geographic area; and
SERVING in leadership roles on important community issues.
A community foundation:
- Is officially recognized by the Internal Revenue Service as tax-exempt under Section 501(c)(3) and passes the public support test as a public charity under sections 509(a)(1) and170(b)(1)(A)(6).
- Has or is developing a history of broad support in the form of contributions from the community it serves.
- Serves as a leader and convener with respect to community issues.
- Has an independent, nonsectarian, governing body broadly representative of the public interest and that is not appointed by a single outside entity.
- Has an annual independent audit that is open to inspection by members of the public.
- Has the power to modify any restriction or condition on the distribution of assets, if circumstances warrant (variance power).
- Operates primarily as a grantmaking institution and may also provide direct charitable services.
- Focuses its primary grantmaking and charitable services within a defined local geographic area that constitutes, in some meaningful sense, a “community”.
- Maintains a broad grants program to multiple grantees that is neither limited by field of interest nor limited to serving only parts of the population.
- Is structured primarily as a collection of named funds that carry out the diverse charitable purposes specified by the governing body and donors, and has a long-term goal to increase the assets held as unrestricted endowment.