What is a Community Foundation?

 

We invite you to watch this brief video for an quick explanation of how a community foundation works, and how you can be part of it!

A community foundation is an independent nonprofit organization that focuses on giving back to its community for the betterment of its people. Most community foundations are geographically defined and give back to their local communities in the form of grants to charitable projects and organizations. Supported by a broad variety of donors and governed by a volunteer board, a community foundation uses funds from many sources – such as individual donations, gifts from businesses, or bequests – to address vital needs and opportunities in the community.

A community foundation allows donors to directly support their own community by partnering with the community foundation to realize their charitable goals and address community needs in lasting ways. Community foundations assist in not only educating donors on local needs but also providing personal, informative and reliable recommendations for effective charitable planning, giving and implementation.

One key way community foundations support the local area is through building endowments. An endowment is an investment within the community foundation where the principal of a gift is held in perpetuity. The endowment dollars are invested to provide both income and growth, and a portion of the income is made available each year for spending on charitable purposes. After a period of time, the amount paid out of the endowment in grants is larger than the original gift, which continues to be preserved in perpetuity. This multiplying effect is the power of a permanent endowment.

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