The first community foundation was conceived and established in 1914 in Cleveland by a local lawyer who had become interested in philanthropy through his work with wills. The concept quickly spread throughout the United States, and moved to Canada in 1921 with the birth of the Winnipeg Foundation.

From the time of their inception, the goal of the community foundations was to build permanent unrestricted endowment funds that would be disbursed by representatives of the community at large to benefit the community in perpetuity. By pooling the contributions of donors, these foundations enabled people of modest means to engage in large scale
The notion that unrestricted assets would ensure flexibility and quick action in addressing community concerns was quickly accepted. Traditionally, community foundations have done little to fundraise other than develop and cultivate their relationships with individual donors and provide accurate up-to-date information about planned and charitable giving.
Over the years, rapid expansion has taken place in communities both large and small. Currently, there are over 165 community foundations in Canada. The service areas claimed by community foundations have expanded to include counties and provinces as necessary to give a viable base, for the same reason, smaller communities have joined efforts with bigger neighbors. Seed money for community foundations may have come from additional sources such as private foundations, various levels of government, corporations and a variety of community groups and service clubs. Professional staffing has increased, so have their pools of unrestricted funds.
The concept of a national self-help network of community foundations in Canada evolved from a national conference hosted by the Community Foundation of Ottawa-Carleton, supported by its counterparts in Metro Toronto, Vancouver, Winnipeg, Hamilton and Calgary, and convened by John Crow, Governor of the Bank of Canada. The Second National Conference was held in Winnipeg in May 1992 officially incorporated the national network as Community Foundations of Canada and further stimulated this nationwide interest in the whole movement. The mission of the CFC is to promote, support, and enhance the community foundation movement in Canada. They do that by providing information, technical support, networking opportunities and financial support. They organize a national convention every 2 years and regional meeting in alternating years.

What is a Community Foundation?

Broadly defined, it is a growing capital fund, the earnings from which are used to meet the whole wide range of local charitable needs and interests– arts and culture; scholarships; education; medical and scientific research; health; environmental concerns; social services and community development- or else to a specific charitable cause or organization as requested by the donors.
In more technical terms, a community foundation is an incorporated, non-profit organization that is officially registered with the Canada Revenue Agency (CRA) as a tax-exempt “public foundation” and as such allotted a charitable registration number. This approval by the CRA brings advantage of allowing for the receipting of contributions for income tax credits. It also carried with it duty to make its transactions public by filing an annual return with the CRA.
It has a governing body that is broadly representative of the public- appointed by an independent nominating committee. It solicits and accepts charitable gifts for the purpose of establishing and building up a perpetual endowment for the community. Gifts may be in cash, real property, securities or through life insurance, but in the long term they most commonly come as bequests from grateful citizens wishing to benefit, permanently, the community that  has been good to them. Gifts may be designated by the donor for a specific charitable cause or organization, or may be unrestricted, with the earnings being directed to meet the changing needs of the community.
It operates primarily as a grantmaking institution and not as a direct provider of charitable services. A community foundation may take on the role of a catalyst, bringing together providers of services and funding services.
Community Foundations are neutral in that either those who give or those who receive do not control them. They are free from control of the government- municipal, provincial or federal.
Community foundations are unique in other respects. They are flexible because they can accept various forms of assets, from all kinds of donors, in order to make grants for a wide variety of charitable purposes. They are flexible because they serve the entire spectrum of community interests and needs- seeking out and supporting innovative undertakings. They have the ability to be active in the search for donors and community partners. Their focus is the future. Their ultimate aim is to make the notion of  “community” work better in a given place.

Glossary of Community Foundation Terms

Endowment:An endowment is a pool of money, which is invested. the income derived from the investments is then used for the purpose intended by the donor. In all cases, the capital assets are owned by the Foundation. In all cases the income derived from the investments must be used for charitable purposes, as defined by the Canada Revenue Agency.

The General Endowment Fund: is the pool of money that has been donated by community members, giving the Foundation Board the discretion to determine how income from these funds will be used.

Designated Fund: The Red Deer & District Community Foundation will create endowment funds in which donors wish to have the income generated from the gift directed to a specific cause or organization. An open designated fund allows contributions from the community at large. A Closed designated fund limits the contribution to those from the original donor.

Field of Interest Fund: A donor may want the Board to have the decision making power, but may wish to specify that the income be directed to a particular interest, for example, youth. This type of fund permits the Foundation to respond to emerging needs of the community, which still honors the donor’s particular interest area.

Named Fund ( also known as a Family Fund): Donors often want to establish funds in memory of special people. Named funds can be established within the General Endowment Fund, as a Designated Fund or as a Field of Interest Fund.

Donor Advised Endowment Fund: These are the fastest growing funds in community foundations. The Foundation agrees to include the Donor in decisions regarding the use of the investment income, with the provision that the decisions are in keeping with the Mission and Principles of the Foundation.