Key Term

What is Community Foundation?

Definition

A Community Foundation is a tax-exempt, nonprofit, autonomous, publicly supported, philanthropic institution composed primarily of permanent funds established by many separate donors for the long-term benefit of the residents of a defined geographic area. These foundations pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place.

Significance

Community Foundations play a vital role in charitable giving by serving as local philanthropic hubs that connect donors with community needs. They offer donors the advantage of local expertise, professional fund management, and tax benefits while providing nonprofits with a stable source of grant funding. Their unique position as permanent institutions with deep local knowledge allows them to respond effectively to changing community needs, serve as catalysts for important initiatives, and provide leadership during times of crisis. They also offer donors various giving options, from donor-advised funds to scholarship programs, making them essential vehicles for strategic charitable giving at the community level.