Community is Our Name, By Abby Madison Reeg, MA, CFRE

If you work in development for a nonprofit organization, you and your organization could benefit from working together with your local community foundation.

Why do donors support and appreciate the benefits of a community foundation?
• Tangible results
• Trust
• Expert local knowledge, personal service, connections, and understanding of needs and opportunities
• Commitment to improving the community through meaningful philanthropy
• Tax advantages
• Investment performance

A community foundation is a public charity that typically focuses on supporting a geographic area by facilitating, pooling, and investing donations used to address community needs and support local for-impact partners (nonprofit organizations and municipalities). Community foundations offer grant-making programs to improve and enhance the community.

There are approximately 600 community foundations in the U.S. According to a survey by the Michigan Council of Foundations, assets held by the 48 responding community foundations in Michigan range from $4 million to over $1 billion. Community foundations in Michigan grant to dozens of nonprofits with the top three categories including human services, education, and arts/culture/humanities.

Community foundation advancement staff work with donors to create endowed and non-endowed funds that fit with their philanthropic intent. The primary distinction between an endowed or non-endowed fund is that the principal of an endowed fund is preserved forever, with a portion of the earnings available for spending. In contrast, any or all of a non-endowed fund can be accessed. Community foundations offer a variety of giving options to donors and some community foundations may offer unique options that others don’t.

People, organizations, or businesses may give gifts of any size to existing funds at a community foundation (you might have given a gift in memory of a friend or loved one in this way). Donor advised funds are a popular choice for people who wish to donate and grant the funds to nonprofits over time. This acts like a “charitable checking account.” Endowed scholarships are a popular choice for donors who wish to invest in education. Nonprofit organizations start funds to diversify their revenue streams. Every community foundation enjoys the unrestricted gifts that help them rapidly respond to community needs. Finally, legacy gifts may be given to a particular fund or start a new fund. Bequests in a will or trust are the most popular ways donors leave a legacy gift to a community foundation.

Development professionals find it helpful to:

• Learn from potential donors about their philanthropic intent (what missions give them joy), the general amounts they give, and how they typically give (cash, Required Minimum Distribution from a retirement account, stock, donor advised fund, etc.).
• Ask donors who make grants from donor advised funds if they would consider supporting your organization’s mission. Many donors grant multiple gifts annually from donor advised funds.
• Check with your community foundation to see if they have a “for-impact partner wish list.” This list helps fund holders with donor advised funds learn about community needs. Make sure your organization is on the list.
• Partner with a community foundation to help a major donor start an endowed designated fund for your organization. This is a great way for your organization to create a forever funding stream.
• If writing a competitive grant, follow the organization’s granting guidelines and take advantage of any guidance opportunities the community foundation staff offers along the way. If your mission and project fits within the parameters, it might be helpful to write an outline of your proposal and review it with the program officer. The grants and program staff will be a helpful resource for you and may contact you if they find a future funding opportunity.
• Community foundation staff welcome meetings with you, your donor, and their professional advisors if they are considering an estate gift through the community foundation to benefit your mission.

Community is our name. Advancing the wellbeing of our communities is what community foundations strive to do by collecting donations, investing them, and granting to for-impact partners. Connecting with a community foundation will give you more tools for your fundraising tool belt, make a bottom-line positive difference for your organization, help your donors feel great about giving, and make the community a better place.

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