Community foundation

Community foundations (CFs) are instruments of civil society designed to pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place. Community foundations are a global phenomenon with 1400 existing around the world of which over 700 are in the United States.

Operation

Community foundations are independent registered philanthropic institutions serving geographically defined territory, typically a city or administrative area (county, region and the like). The six main characteristics of the CFs are:

1. Act as grant-making foundations – e.g. give grants to support development projects
2. Their mission broadly defined (e.g. to improve quality of life in a community)
3. Serve geographically defined communities – a city, state, region, district or province
4. Are supported by a broad range of private as well as public donors and seek philanthropic contributions primarily from inside the community
5. Are governed by multi-sectoral local boards reflecting the community
6. Build capital endowment, which is an important element of sustainability

It is a combination of all these basic characteristics what makes true CF, although there are many other types of community organizations that have some of these characteristics.

Families, individuals, businesses, and nonprofit groups establish funds within community foundations into which they can contribute a variety of assets to be used for charitable purposes. The people or organizations that establish the funds can then recommend that grants be distributed, in the name of the fund or anonymously, to qualified nonprofit groups and schools. In the USA the donor receives a charitable deduction in the year that gifts are made into their funds, but not all countries where community foundations currently operate provide such incentives for donors. Increasingly, community foundations are hosting giving circles as a way to further support giving in their communities.

The assets of community foundations are pooled and invested, with donors typically having a choice of investment products.

The funds established at community foundations can be non-endowed or expendable funds (i.e., the corpus of the fund can be spent in its entirety) or they can be endowed, which limit distributions to the interest earned on the assets and/or the amount granted by the foundation as long as the corpus is not spent. Endowments last in perpetuity due to the corpus never being able to be spent.

History of community foundations

The first community foundation was set up in Cleveland in 1914 by Frederick Goff and operates now as the Cleveland Foundation. Others soon followed including the California Community Foundation and the Chicago Community Trust. The first Community Foundation in Canada was established in Winnipeg in 1921. Since the 1980s, a number of private foundations in the United States have created initiatives to develop community foundations in various states. One of the earliest such initiatives was in Michigan and in Indiana the Lilly Endowment funded a program that has spurred development of community foundations in each of the state's 92 counties. On a smaller scale, the Grand Victoria Foundation supports development of Illinois community foundations and the Kansas Health Foundation operates a similar program in Kansas communities.

Notable Community Foundations

Canada

• Hamilton Community Foundation
• Vancouver Foundation

United States

According to the data available on July 18, 2011 on The Foundation Center website ^[1] the largest community foundations, with assets over $1,000,000,000 held, were:

1. Tulsa Community Foundation - $4,412,774,000
2. The Cleveland Foundation - $1,888,630,534
3. Silicon Valley Community Foundation - $1,749,109,000
4. New York Community Trust - $1,741,811,259
5. Chicago Community Trust - $1,503,434,485
6. California Community Foundation - $1,120,523,000
7. Greater Kansas City Community Foundation - $1,107,725,820
8. Oregon Community Foundation - $1,040,106,343
9. Marin Community Foundation - $1,014,427,025

In terms of annual giving, seven American community foundations gave more than $100 million in grants over the year according to the last data available on July 18, 2011 ^[2]. The Greater Kansas City Community Foundation gave out the most grants at $183 million, the Silicon Valley Community Foundation was second in grants made at $154 million, The Community Foundation for Greater Atlanta was third in grants made with $142 million, The California Community Foundation was fourth with $129 million, The New York Community Trust was fifth with $123 million, The Tulsa Community Foundation was sixth with $117 million, and The Chicago Community Trust was seventh with $110 million.

Statistics made available by the Foundation Center enable also financial comparison of the largest community foundations with the largest corporate and private foundations and illustrate the fact that community foundations in the United States tend to be larger than corporate foundations in both assets and grants given.

United Kingdom

• St Katharine & Shadwell Trust
• Two Ridings Community Foundation

Supporters of community foundations

• Bertelsmann Foundation
• Charles Stewart Mott Foundation
• Ford Foundation
• W.K. Kellogg Foundation
• Lilly Endowment
• King Baudouin Foundation

See also

• Occupational safety and health
• Civil society
• Charities
• Foundations
• Endowments
• Non-profit organization
• Public administration
• Social innovation

References

1. ^ Foundation Center 25 Largest Community Foundations by Asset Size. Retrieved October 6, 2011.
2. ^ Foundation Center 25 Largest Community Foundations by Total Giving. Retrieved October 6, 2011.

Publications

• Bernholz. L., K. Fulton, and G. Kasper. (2005). “On the brink of new promise: The future of U.S. community foundations.” Trade report. Funded by Charles S. Mott Foundation and the Ford Foundation.
• Gast, E. (2006). Community foundation handbook: What you need to know. New York: Council on Foundations.
• Hall, P.D. (1989). “The community foundation in America, 1914-1987.” In Richard Magat, ed., Philanthropic Giving. New York: Oxford University Press.
• Hammack, D. (1989). “Community foundations: The delicate question of purpose,” in Magat, R., ed. An agile servant: Community leadership by community foundations. New York: The Foundation Center.
• Magat, R., ed. (1989). An agile servant: Community leadership by community foundations. New York: The Foundation Center.