What is a Community Foundation?

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A community foundation is a simple but ingenious concept…a registered charity that pools large and small gifts and places them in a community endowment fund, the income from which is distributed in support of charitable causes.

In 1914 Frederic H. Goff, a Cleveland banker and lawyer, started the Cleveland Foundation. Mr. Goff developed the idea of a community foundation as a way to ensure endowments would perpetually benefit a community. The community foundation would be vested with a variance power to use funds for other purposes, as close as possible to a donor’s original intent, should that purpose become obsolete. Thus the foundation could avoid costly court proceedings, continue to carry out the donors’ wishes and benefit the community in perpetuity.

Canadians, always willing to borrow a good idea, didn’t take long to adopt this one. The Winnipeg Foundation was started in 1921 and now has assets of $210 million. The largest Canadian community foundation, in fact the largest foundation of any kind in Canada, is the Vancouver Foundation, started in 1943 and now holding assets of $600 million.

Community foundations do not themselves provide direct charitable services but, instead, award grants from the charitable trust funds to charities in the community that can best carry out donors’ interests and meet community needs. Grant making decisions are made by a volunteer community-based Board of Governors representative of the general public and knowledgeable of community needs and the charities that address those needs.

Community foundations are one of the fastest growing and most dynamic networks dedicated to building and strengthening communities in Canada.  Since 1990, the 32 Canadian community foundations have grown to over 160 today, with combined assets of nearly $2 billion.   They give well over $100 million in grants annually to support local and national causes across the country.

The ultimate mission of a community foundation is to “enhance the quality of life in the community.” There are three ways a community foundation can do this:

  • effective grant-making: the most visible and well-known function of a community foundation is to make financial grants to local charities. Local volunteers evaluate funding applications and make decisions based on the needs of the community and funds available. Grants are made to a wide variety of sectors, from health to heritage, education to environment, and many others.
  • endowment building and donor services: the perpetual nature of a community foundation, combined with its local focus, makes it an appealing place for donors who want to strengthen their community. A community foundation has the skills and tools to work with donors to help them achieve their charitable wishes.
  • community leadership: as an autonomous, volunteer-driven, and locally focused organization, a community foundation can work with charities, local government and citizens to identify community needs and encourage collaboration and cooperation amongst stakeholders.