Community foundations are tax-exempt public charities serving thousands of people who share a common concern – improving the quality of life in their area.
They are designed to pool donations into a coordinated investment and grant-making facility dedicated primarily to the social improvement of a given place.
All community foundations are overseen by a volunteer board of leading citizens and are run by professionals with expertise in knowing their community's needs. Community foundations typically go beyond simply making grants that advance charitable activities and also identify current and emerging issues, stimulating resources to address those needs and help their region prepare for the future.
Families, individuals, businesses, and nonprofit groups establish donor advised funds within community foundations into which they can contribute a variety of assets to be used for charitable purposes. The people or organizations that establish the funds can then recommend that grants be distributed, in the name of the fund or anonymously, to qualified nonprofit groups and schools. The donor receives a charitable deduction in the year that gifts are made into the fund.
The funds established at community foundations can be expendable funds (i.e., grants can be made in any amount at any time) or they can be endowments, which limit distributions to the interest earned on the assets. Endowments last in perpetuity.