The first community foundation was set up in Cleveland in 1914. Since the 1980s, a number of private foundations in the United States have created initiatives to develop community foundations in various states. Today there are 700 in the US and 1700 in the world.
The main characteristics of the CFs are: grant-making foundations with a broad mission in a specific geography supported by a broad range of private donors governed by a board seeking to build capital endowment.
The largest twenty-five foundations in the US have combined assets of over $33 Billion, which provides individuals setting up foundations great expertise. Source: FoundationCenter.org
Generally, it only takes $5,000.00 to start a fund, and given the credibility, supervision, and expertise that a community foundation offers; that is a big advantage compared to opening an individual 501c (3) corporation. There are five basic types:
Donor Advised Funds and Corporate Advised Funds® – Can be either endowment or spend-down funds; donors recommend grants to the Board for approval.
Field of Interest Funds – Created to support a particular area of interest, i.e. arts, environment, education.
Designated Beneficiary Funds – Created at the Foundation to support a specific agency or project.
Scholarship Funds – Parameters of giving are determined when the fund is established.
Organizational Funds– Assets of another organization are held and managed by the Foundation.
Community Foundations can accept gifts of almost any kind. Whether in cash, securities, real estate, life insurance, business assets or personal property, their staffs will work with an individual to convert resources into fuel to power philanthropy.
This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Consult the appropriate advisor prior to making any financial decision.
About the Author: Charles Marsala is a Financial Advisor with Benchmark Investment Group with Securities offered through LPL Financial, a member FINRA/SIPC. He can be contacted at Charles.Marsala@lpl.com. He established a Field of Interest Fund to promote Species Conservation with the NorthShore Community Foundation the mission statement is: “to support and promote awareness of the possible extinction of wild animals and to support organizations that care for orphan wild animals.”