What is a community foundation?
Community foundations are the best way to ensure your donation (gift) stays within and supports your community forever. In Canada, the community foundation model began in Manitoba in 1921 and is now stronger than ever. Today, Manitoba has more community foundations, per capita, than anywhere in North America. Each one is committed to supporting its community’s needs and opportunties.
Community foundations are charities that use endowment funds to ensure continuing community impact. A volunteer board manages the investments and grants to the community.
Endowment funds are investments established by community foundations to provide grants to their communities.
Gifts to a community foundation are held in endowment funds and invested. A portion of the income generated by that investment is distributed as grants into the community each year. The initial gift is never spent so it will continue to support and benefit your community forever.
Types of endowment funds
Community or unrestricted funds allow community foundations to support their community’s current needs and emerging opportunities. The community foundation accepts and reviews grant applications, and makes grants to local charitable charities and municipalities. Your gift to a community fund is a long-term investment that will have the greatest impact in your community.
Donor Advised Funds
Donor advised funds combine the benefits of making a gift that will help your community forever with the ability for you to determine where you want your grants to have an impact. You work with the community foundation to choose the grants to local charitable organizations and municipalities.
Agency funds are endowment funds, administered by the community foundation, dedicated to a specific charitable organization. Anyone can make a gift to an agency fund. Your gift is pooled and invested, and a portion of the generated income is distributed as grants to the charitable organization to be used at their discretion.
An agency endowment fund is a tremendous asset for any organization providing them with a stable, annual revenue stream.
Scholarship funds are endowment funds that provide financial assistance to students instead of making grants to local charitable organizations. Establishing a scholarship fund with a community foundation will allow you to distribute scholarships or bursaries to deserving students in your community year after year.
Community foundations are able to accept gifts on behalf of other qualified organizations. Community foundations do not hold these gifts in endowment funds but transfer them directly to the qualified organizations.
Recipients of flow-through gifts must meet the requirements of a qualified organization.