Community foundations are not necessarily the object of donors’ philanthropy but provide the vehicle to fulfill their charitable objectives. Community foundations develop their assets for, and in cooperation with, all the charitable causes that go to make up a community’s quality of life. The Community Foundation’s role is as a charity of charities!
Community foundations don’t fundraise in any usual sense; rather, they attract wealth. The major focus is planned giving, gifts of assets rather than income. Following are some of the ways in which a community foundation can be particularly useful.
Community foundations retain staff who can assist donors in several other ways in addition to establishing a fund or making a donation:
research the best organizations working in donor’s field of interest;
make recommendations on particular funding proposals and opportunities;
organize site visits so the donor can meet a prospective grantee’s leaders, observe the services being provided and make an informed decision about whether or not to support the group;
lost meetings for donors to interact with one another and share experiences and ideas.
Community foundations truly belong to the community they serve. Though they appeal to the wealthy, they are not just for the rich. Through a community foundation, philtanthropy is accessible and available to all. Most gifts come from people of modest means. Most community foundations permit a donor to establish a fund with as little as a few thousand dollars. In Red Deer, the minimum donation required for most funds is $5,000. This can be built over time, through annual contributions or added to a deferred gift such as life insurance or a bequest.
In this way, donors can have their names linked forever to the kinds of causes they cared about during their lifetime. Those generous gifts for retired milk horses would be kept viable in support of current animal welfare issues.
The community foundation option also appeals to people who wish to support a particular organization but only for a specific period of time. For example, the XYZ Family Fund earnings can be directed to support the ABC organization for 25 years.
Cost Effectiveness
The foundation looks after the paperwork for the funds under its care, ensures conformance with government regulations, makes the official reports, does the accounting and undertakes the annual audits. The costs are kept low by a variety of means such as subsidies, donations and its own endowment fund earnings. In Red Deer, a modest administrative fee, capped at 1.5%, is charged to the funds- which includes our professional fund management fees. As the assets grow, the fee is generally reduced as it can be spread over a larger pool.
Types of Gifts
Nearly every kind of asset can be contributed to the community foundation. Most non-cash gifts are liquidated immediately and the proceeds transferred to the investment portfolio. Variations are posssible, within the confines of the law, depending on the nature of the asset and the wishes of the donor. Flexibility and responsiveness are the basis of the gift acceptance policies of most community foundations.
With one notable exception, the whole variety of planned giving vehicles can be used to establish a fund at a community foundation. The one exception is annuities, which are considered a form of debt. In Canada, public foundations are precluded from incurring such debt obligations.
Donors to community foundations generally establish one (or more) of several kinds of fund, any of which can bear the donor’s name or memorialize a family, an individual or a cause:
Unrestricted Funds
These funds allow for the desired flexibility to meet emerging opportunities and address issues of importance to the community as they change over time. These funds make grants possible in areas not adequately covered in a particular year by designated and advised funds. In this way, the community foundation balances its overall support to the community in all its diversity. A person who wants to give a certain amount to charity each year or by way of planned gift or bequest, but has no cause especially close to his/her heart, might do so through an unrestricted fund.
Field of Interest Funds
The donor identifies a general idea such as music, education, health or environmental causes and leaves it to the foundation to select the particular grantees.
Donor Advised Funds
The donor or the designated individual or group, advises the foundation each year on which grants are to be made and in what amounts. Designated Funds are for donors who want to support a particular organization and wish that support to extend beyond their lifetime. Within this category are several types, including organizational endowments and scholarship funds.
Contact the Community Foundation
Suite 108, Scott Block,
4818-50th Avenue
Red Deer, Alberta T4N 4A3
T: 403.341.6911
F: 403.341.4177
E: info@rddcf.ca