What is a Community Foundation?
Community foundations make up one of the fastest growing sectors of philanthropy in the United States today. Community Foundations build and strengthen communities by making it possible for a wide range of donors to participate in creating permanent (and often named) funds to meet present and future needs. Community foundations have become catalysts for improvement within urban centers and in rural settings through philanthropy that is visionary, diverse and inclusive.
Community foundations are a sustainable aspect of philanthropy - providing leadership and problem solving in the present and preparing for the future with a permanent endowment.
There are nearly 700 community foundations in the United States and there are more than 90 community foundations and geographic affiliates in Michigan alone. The community foundation model has spread throughout the world. There are at least 470 community foundations in 41 countries outside the United States, with at least another 140 in development around the world.
- An endowment is a philanthropic tool that is forward-looking and sustainable. It is sustainable because it renews itself through smart investing and preservation of the principal.
- Endowment allows for immediate gifts because people have given to it in the past. There are funds available at any time to help with a variety of causes.
- An endowment speaks to the future of a community and the desire of people in the present to make sure that generations are ensured the same or better quality of life.
An endowment can be compared to a savings account or a retirement savings plan. People make donations to an endowment and the funds are invested with growth as a goal. From the income, grants are made and the principal of the gift always remains intact.
In the case of the Community Foundation the gift remains whole forever and a portion of the income - about 5 percent a year - is spent on grantmaking. This "spending rule" allows for continued growth of the endowment through reinvestment of earnings and new gifts.
A focus on service
Differentiating a community foundation from other philanthropic options is a high degree of personalized service for donors.
Foundation development staff routinely works with families and professional advisors to design gift plans that fit every situation and donor preference, ensuring that philanthropists receive the most benefit from their charitable contributions. Program staff conducts research, analyses and site visits to ensure that philanthropic dollars are maximized and well-used.
The Grand Rapids Community Foundation operates in compliance with the National Standards for Community Foundations as set forth by the Council on Foundations.
Gifts of all sizes and shapes
Community foundations can easily accept gifts of various sizes and types from private citizens, corporations, government agencies and other foundations. Nearly every type of gift-including real estate, closely held stock and artwork-can be contributed to a community foundation. Gifts are frequently made through bequests and also by living donors through various types of funds and deferred giving vehicles. In most cases, a gift to a community foundation is made part of a permanent endowment and thus the intention, the asset and the name of the donor are preserved forever