Since adding new board members last fall, the Community Foundation of Grundy County has been conducting mini lessons at board meetings to review the basics of community foundations, the role of the board, and the legal and ethical responsibilities of both board and staff.
We decided that we should also take a step back and offer the same service to the public, too, so we will spend a few columns reviewing community foundation basics with you. We also invite you to submit questions that you would like us to answer in future columns. Community foundations are unique not-for-profits and we are not easy to understand in one sitting!
What is a community foundation?
According to the National Standards for U.S. Community Foundations, a community foundation is a tax-exempt, not-for-profit, autonomous, publicly-supported, nonsectarian, philanthropic institution with a long-term goal of building permanent, named, component funds. These funds are established by many separate donors for the broad-based charitable benefit of the residents of a defined geographic area, typically no larger than a state.
How did community foundations start?
The Cleveland Foundation brought the model of the community foundation to life in 1914. Before that, private foundations dominated formal philanthropy and giving was limited to individuals or families with vast personal wealth. Within five years, community foundations formed in places like Chicago, Boston, Milwaukee, Minneapolis, Rhode Island, and Buffalo. By 2010 there are more than 800 community foundations, over half of which are found in the Midwest alone.
How is a community foundation different from other public charities?
Most public charities provide direct and specific social services to the community, such as feeding the hungry, counseling for addictions, or mentoring for at-risk kids. Donations to these not-for-profits support their direct service work. A community foundation, while also a public charity, is primarily a grantmaker and convener rather than a direct service provider. Like the old commercial, we don’t provide the direct services, we support area not-for-profits to make those direct services better.
However, we do offer specific and customizable services to donors as part of their charitable giving plans. Community foundations can be an integral part of the discussion when a donor is consulting with other professionals in order to develop an intentional giving plan designed to implement their charitable goals now and after their lifetime. Examples of these donor services include Donor Advised Funds, Designated Funds, Field of Interest Funds, Agency Funds, and Scholarship Funds – any of which can be endowed to forever fund the causes the donors care about. A community foundation is designed to always be here to safeguard the intent and wishes of the donors from generations past to generations in the future.
How is a community foundation governed?
All community foundations have volunteer boards of directors of varying sizes and makeup to reflect the community they serve. The Community Foundation of Grundy County currently has a board of nine and has the ability via our bylaws to have as many as 13. We meet monthly on the third Thursday at 7:30 am and have committees that meet mid-month to focus on Finance, Investments, and Grants & Programs. Our terms are three years long.
At the national level, we have the Council on Foundations to provide leadership and association management. One program of the Council is National Standards, developed in response to the Sarbanes-Oxley Act requiring private corporations to improve their governance. The Community Foundation of Grundy County “passed” National Standards in 2008 which means that our governance and policies are in place to assure that we are conducting ourselves in a professional, legal, ethical, and transparent manner. In addition, we are current with all of our state and federal filing requirements, which include the annual IRS 990, IL-AG 990, and the Illinois Secretary of State’s certificate of good standing.
That covers that basics of what a community foundation is. In future columns we’ll reflect on how the Community Foundation got started as well as answer any questions you may have. Please feel free to submit questions to us at 941-0852, or via e-mail to [email protected] or mail your question to 102 Liberty Street, Morris, IL 60450.
We look forward to hearing from you!