What is a community foundation?
A community foundation is a tax-exempt, independent, publicly supported, philanthropic organization established for the long-term benefit of a defined geographic area. It also encourages and distributes non-permanent philanthropic funds.
Who runs a community foundation?
An independent governing body representing the broad interests of the community with members of the board serving limited terms runs a community foundation. The board is responsible for seeing that a reasonable rate of return is achieved on all funds entrusted to the foundation along with a few other obligations.
How does the foundation get its funds?
A community foundation actively seeks new contributions from a wide range of donors and provides assistance to those donors in fulfilling their philanthropic interests.
Who receives grants from a community foundation?
The unrestricted funds of the foundation are awarded in a competitive process to non-profit agencies in the community. These agencies must be qualified 501 (c) (3) organizations.
Who invests the foundation’s money?
Generally, the foundation will hire professional management for its portfolio investment. In the case of Fort Scott Area Community Foundation, the Greater Kansas City Community Foundation (GKCCF) fulfills this need for FSACF as an affiliate of the Community Foundation of Southeast Kansas. Fort Scott Area Community Foundation establishes the philosophy and policies for investments, but the professionals handle day-to-day decisions.
Will the foundation ever change donor’s instructions?
A fund agreement covers all gifts and funds in the foundation. This agreement includes a “variance power” to modify the use of restricted funds if such restrictions become unnecessary, incapable of fulfillment or inconsistent with the charitable needs of the community or area served. Those are the only conditions under which a foundation modifies the terms of a gift.
What happens if the community foundation goes out of business?
The community foundation is a public charity and as such, is under the supervision of the Attorney General of the State. If something happens to the community foundation, it would be the decision of the Attorney General.
To whom is the community foundation accountable?
A community foundation files an annual return with the IRS, which is a publicly available document. In addition, most states require a state information return, which is also publicly available.
Do I need a lawyer to talk to a foundation?
The fund agreements that establish donor-named funds in the foundation are made available to each donor during preliminary conversations with foundation. It is always recommended that the donors’ individual counselors review charitable gift plans.
How much money do community foundations spend?
In 1993, the grants from community foundations were about $1 billion, based on total assets of almost $10 billion.
How would I use my local community foundation?
A family may choose to establish a named fund that bears their family name and continues their community giving in perpetuity. A community group may decide to establish a fund in honor of, or memory of, a friend or community leader. A business may choose a community foundation to help with its grant making, thus saving time and personnel for the business, yet assuring support for their selected charitable interests. Some donors choose to make their community philanthropy anonymous and the foundation is a perfect partner to help them. Nonprofit agencies often establish their endowments within a community foundation to guarantee their endowment donors that the principal of the gift is never disturbed and the earnings will forever come to the agency.
How long does it take to establish a fund?
It is a simple process involving a meeting with a representative of the foundation and the donor to review the fund agreement form and determine the donor’s desires and the most suitable way to accomplish them. Once the donor and other appropriate counselors of the donor approve the form, the initial contribution is made and the fund is established. Generally the fund needs to be approved and accepted by the board of the foundation at its next meeting.
How much does it take to establish a named fund?
For the Fort Scott Area Community Foundation, the minimum fund is $10,000. This may begin with a contribution of $2,500 and the donor has three years until the fund totals $10,000.
There is no minimum contribution that may be made to the foundation. For funds that are less than the required amount to establish a named fund, any amount may be added to our existing funds. We also have an endowed unrestricted FSACF fund from which our grant committee makes yearly grants to charitable organizations.
Must all gifts be cash?
No. The foundation is able to accept gifts of appreciated securities (which are particularly advantageous to the donor), real property, or in some cases, personal property. Some foundations also accept business and partnership interests. The community foundation offers the maximum charitable deduction available for estate and gift planning opportunities. The foundation is generally able to provide information on giving techniques and assist donors to evaluate the most effective ways to accomplish their charitable goals.
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