What is a Community Foundation?

Charities, historically, were established by a group of individuals interested in making a difference in a particular area of people’s lives; for example, curing a disease or helping the sick, protecting the environment, improving children’s education or focusing on the challenges of the elderly. Each charity could be labeled by its specific mission.
 

Today, the communal needs are so vast that many charities exist to address these numerous priorities. However, in order to foster a sense of community in charitable giving, the Jewish community established UJA Federation of Greater Toronto, the parent of United Jewish Welfare Fund of Toronto, as the one-stop-shop not-for-profit charitable equivalent of a retail superstore. Providing donors the ability to pinpoint their philanthropic efforts on whatever needs exist at any given time throughout their community is accomplished through the Federation’s endowment and planned giving arm, the Jewish Foundation of Greater Toronto.



How Community Foundations Work


Community foundations have a number of valuable features. Because foundations are essentially local entities, they have deep roots within the particular community they serve. Both foundation employees and the outside professional advisors that work with them have a wide range of expertise in assisting prospective donors to get the most from their giving, providing personalized service and tailoring solutions based on understanding the unique motivation of each donor and the current communal needs.
 
A donor can make arrangements with a foundation that leave the donor flexibility in the timing and distribution of gifts to particular charities. Also, while smaller charities may be unfamiliar or uncomfortable with taking as donations certain types of assets, such as real estate, collectibles, and other property that is difficult to convert to cash, foundations usually have the experience necessary to help donors and charities unlock the value of unusual gifts.
 
Foundations can tap into multiple sources of funding for a given cause by coordinating grants, matching funds, and utilizing other resources.
 
When it comes to sophisticated charitable planning, foundations often have a depth of knowledge that smaller charities might lack. For example, a community foundation will work with an outside lawyer to create a charitable trust that will benefit both the donor’s family and a local charity. Another might set up an endowment fund designed to allow donors to support both a charity’s immediate and future needs.
 
They also offer a diverse set of funding vehicles for charitable giving. Gifts to unrestricted funds give the foundation the ability to deploy assets where they are needed most. On the other hand, more hands-on methods, including donor-advised funds and designated funds, allow the donor to recommend where money will go and the purposes for which it will be used.
 
With professional advisory committees, including estate planning lawyers and accountants, foundations are usually familiar with the most recent advances in estate planning. Charitable trusts, gift annuities, estate bequests, and outright gifts are quite familiar to these foundations.
 
Community foundations offer a great opportunity for donors to make charitable gifts while retaining the highest possible amount of flexibility and effectiveness.