What is a Community Foundation?
A community foundation is a tax-exempt public charity, commonly referred to as a 501(c)(3) – a nonprofit. Contributions to a community foundation are tax-deductible to the fullest extent of the law. Community foundations connect people with causes they care about– education, the arts, human services or any other area of concern.
The first community foundation was founded in 1914, when Cleveland banker Frederick Goff created an organization that would manage permanent funds for charitably-minded citizens and, on their behalf, distribute grants to help local causes. Community foundations spread coast to coast as the virtues of Goff’s concept became evident to civic leaders. Today, more than 700 community foundations put over $4.6 billion to work each year, serving 86% of the United States population.
A community foundation is a permanent philanthropic endowment. As a grantmaking organization, it brings together the financial resources of individuals, families, and businesses to support worthy endeavors of nonprofits in a specific geographic area. In addition, a community foundation uses these financial resources to support scholarship opportunities for deserving students.
A community foundation is defined six key characteristics by the Council on Foundations.
- A flexible, yet permanent collection of funds supported by a wide range of donors
- Relative independence to determine the best use of those funds to meet the community needs
- A governing board of volunteers, knowledgeable of their community and recognized for their personal involvement in civic affairs
- A commitment to provide leadership on pervasive community problems
- A commitment to assist donors to identify and attain their philanthropic goals
- Adherence to a sense of “community” that overrides individual interests and objectives
The Community Foundations National Standards Board provides oversight of community foundations, confirming operational excellence in six key areas—mission, structure, and governance; resource development; stewardship and accountability; grantmaking and community leadership; donor relations; and communications. A community foundation that complies with these standards earns the official National Standards Seal. The Coastal Bend Community Foundation is confirmed in compliance with National Standards.