What is a community foundation and what does it do?
A community foundation is a tax-free, non-profit, PUBLIC foundation [501(c)(3)]. The advantage offered by a community foundation is its ability to pool donated funds to maximize investment leverage and minimize administrative costs. A community foundation is set up to do any of the following things:
- Through unrestricted donations of any size, the Foundation allows a donor to support the community by adding their gift to the Unrestricted Grants Fund or the General Endowment Fund and empowering our Board of Directors to study local needs and make grants and gifts from the donations and earnings.
- Through the use of Donor-Advised Funds, the Foundation can allow the donor to suggest that disbursements from their fund to go to a specific non-profit group or groups or to a general field of interest (Youth, Education, Conservation, etc.).
- The Foundation provides gift-giving options for creating a fund that will keep on generating income for the community into the future.
- The Foundation saves significant legal and accounting expenses over the option of creating private trusts or foundations, yet it can often accomplish the same goals for the donor from a philanthropic as well as a tax and estate-planning standpoint.
- The donor’s gift is invested by the Foundation and the donor is relieved of having to make ongoing investment decisions.
- Using a Board of Directors chosen for their representation of different areas of the county as well as their knowledge and commitment to the area, a donor can be assured that community needs will be identified and considered thoroughly.
If I give money to the Shenandoah Community Foundation, do I have any say in how it is spent?
It depends on the nature of your gift. An undesignated gift of any size will be pooled with other gifts in the General Endowment Fund. The Foundation’s Board will make grants from this fund.
With a simple note of explanation accompanying your donation, it may be applied to any of our other existing funds.
When you establish a named fund, there is a great deal of flexibility in how your gift may be used. Please call us to discuss your particular preferences. See other questions in this FAQ.
What if I want all my charitable giving to be directed to one charity or field of interest?
You may contribute any amount to any existing fund at any time. There may already be a fund that serves a charity or area of need that you want to support.
By creating your own fund, you may either designate a specific charitable recipient (church or non-profit group) or you may prefer to make it a Field-of-interest Fund for general types of needs such as Youth, Education, Conservation, Arts, Emergency Services, etc.
With Field-of-Interest funds, the Board would make grants from your fund to meet community needs within your specified field of interest.
A Scholarship Fund would be for the benefit of individuals to be used to further their education, and you may specify certain criteria for qualified recipients.
With a Donor-Advised Fund, you may, from time to time, advise the Foundation Board to make distributions from your fund to the nonprofits of your choice, including regional and national interests you may have.
How much is required to establish a fund?
While $5,000 is the minimum balance for a fund, a fund may be established with a minimum gift of $500 and the understanding that this will be increased to at least $5,000 within five years. Contributions to an already-established fund may be made by anyone, so like-minded people can work together to reach this goal. A minimal fee applied to your fund’s balance per quarter is used for the Foundation’s operations..
Is my donation tax deductible?
Gifts of cash and securities are 100% deductible. Contributions to the Foundation made through such vehicles as charitable trusts are subject to IRS regulations.
What “community” does the Foundation cover?
The Shenandoah Community Foundation serves primarily Shenandoah County, but donors who have set up Designated or Donor-Advised funds may recommend that grants from their fund be made to qualified regional or national charitable interests.
Are there many options for giving?
Yes! Besides the ones already discussed, the Foundation can work with a wide range of estate-planning tools that include a gift through a will, a charitable remainder trust, a wealth replacement trust, a charitable lead trust, and various other combinations of tax-saving and income-producing options. The establishment of a fund in memory of—or in honor of—someone loved or admired is a concrete way to honor that person.
Is the Shenandoah Community Foundation just for individuals and families?
NO! There are compelling reasons why both BUSINESSES and NON-PROFIT ORGANIZATIONS should consider establishing a fund in their organization’s name. In both cases their name would be promoted through the Foundation literature, website, and annual report, increasing their visibility and reputation for good works.
- Business Example: The “Acme Widget Company Fund” could be established by the company and used for all of their charitable giving or for a designated purpose. The company receives a tax deduction, and the fund remains and grows as a testament to the company’s corporate responsibility to the community. It can be a general philanthropic fund, a scholarship fund, or a special field of interest fund. It promotes their business while supporting the community.
- Non-Profit Organization Example: This is called an Agency Fund and it is an affordable way for a small non-profit organization to establish a fund that will give back to the organization long into the future. Once the fund is established in the organization’s name, it will appear on Foundation literature that goes out to the public, to estate planning attorneys, and to CPAs, increasing the group’s name recognition. Click here for more information on Agency Funds.
If you have more questions about The Shenandoah Community Foundation, please call our office at 540.459.7737