Community Foundations: Defined and Compared
Central Carolina Community Foundation
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What is a community foundation?
A community foundation is a tax exempt, nonprofit, publicly supported, philanthropic institution with the long term goal of building permanent, named funds for the broad-based charitable benefit of the residents in a given area.
The common mission of every community foundation is to enhance the quality of life in the local area. Community foundations carry out this very broad mission by building a permanent endowment fund and using the annual income to support a variety of local nonprofit organizations through grants and special projects.
Most community foundation assets are held in separate funds established by local individuals, families, businesses or charitable institutions. Each fund may have a special purpose, but the foundation board of trustees, representing the community, oversees them all. The IRS recognizes community foundations as public charities in part because they receive support from the general public and their boards broadly represent the areas served.
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How does a community foundation work? Individuals, families, businesses and organizations create permanent charitable funds that help their region meet the challenges of changing times. The foundation invests and administers these funds.
Community foundations also award competitive grants to meet the needs within their service area. Community foundations are governed by a board of trustees of community leaders and are administered by professional staff. Operating expenses are paid from management fees, through grants and partnerships with local foundations, and from gifts designated by donors to cover foundation operating costs.
How do community foundations differ from private foundations? A community foundation is supported by a broad and ever-widening group of unrelated individuals, families, corporations and institutions. The only thing that connects all of our donors is a desire to improve local communities.
Because of their broad base of support, community foundations are classified by the IRS as publicly-supported charities. This gives community foundations tax advantages not enjoyed by private foundations.
Community foundations are also allowed to treat all funds within their control (known as "component funds") as part of a single corporation. This gives them administrative advantages over private foundations as well.
Private foundations, by contrast, are generally supported by a single individual, family or business. Rarely does it make sense to establish a private foundation if the principal endowment is not large. Today, of course, the world's largest foundations -- Gates, Ford, Kellogg -- are all still private foundations.
To prevent abuse and self-dealing, private foundations have been subjected to numerous penalty taxes and legal requirements by the IRS since the 1970s. Because community foundations are controlled by large, diverse and unrelated board of trustees and the possibility of abuse is slim, the IRS does not impose any tax penalties or burdensome legal requirements on community foundations.
How do community foundations differ from other nonprofit organizations? Most nonprofit organizations have a specific mission. By contrast, a community foundation’s mission is very broad: to improve the quality of life in a given area. This breadth of mission reflects our ability to make grants in any field of interest with a charitable benefit to local communities.
This flexibility allows us to serve a wider group of potential donors on the one hand and, on the other, a wider group of nonprofit organizations whom we consider our partners in improving local communities.
Area nonprofits benefit from having a local community foundation because the community foundation helps money stay in a community. Community foundations benefit local nonprofits in other ways, too: besides having local grant money available, some nonprofits ask the community foundation to manage an endowment on their own behalf. We call such funds "agency endowment funds."
As it grows, a community foundation gradually becomes the center for all charitable giving in a community. We help make connections between the people who want to give and the people who need their support.
How do community foundations differ from the United Way? The United Way is the community's ‘checking account’ obtaining monthly or annual contributions primarily through the workplace to benefit human services organizations. The contributions are distributed to approved United Way agencies. The Community Foundation is the community's ‘savings account’ attracting both outright and deferred gifts to benefit organizations in all charitable fields including education, health and human services, arts and culture, civic projects, conservation and natural resources.
What is Central Carolina Community Foundation? Central Carolina Community Foundation is a nonprofit organization serving 11 counties in the Midlands by distributing grants and scholarships and linking the resources of donors, nonprofits and community leaders to areas of need.
What is the mission of Central Carolina Community Foundation? Our mission is to promote, facilitate and increase philanthropy to create a sustainable impact on our community through responsible giving.
How is the Community Foundation funded? Our operating expenses are paid from management fees, through grants and partnerships with local foundations, and from gifts designated by donors to cover foundation operating costs.
Where is the Community Foundation located? Central Carolina Community Foundation is located at 2711 Middleburg Drive, Suite 213, Columbia, SC 29204. Click here for a map and directions.
What is an endowment? An endowment is a type of fund that is set up to produce income for charitable purposes. A typical endowment fund will distribute annually an amount deemed prudent by the board of trustees. Distributions will be based on the spending policy adopted by the board of trustees. A typical distribution rate is 4% to 5% of the 12 to 20 quarter rolling average of the fund balance.
An endowment fund is likely (though not, of course, certain) to remain permanent as long as long as the distribution rate reflects the long-term growth patterns of investments.
How does a community foundation invest its funds? If funds are designed for long-term use, we invest our funds in common stocks and fixed income securities in accordance with a prudent, long-term asset allocation strategy. We do not manage our investments from day to day; we hire professional managers to do that for us. Our responsibility is to balance our overall investment program in light of our long-term investment goals; to monitor performance regularly; and to review and change management as necessary to ensure that we meet or exceed our performance benchmarks.
If funds are designed for shorter-term use, we design an appropriate short term investment strategy. Short-term investment vehicles include certificates of deposit, fixed income securities and money market funds.
What are the tax advantages of donating to a community foundation? We offer the best tax advantages for charitable donations available under law. We are a publicly-supported nonprofit organization, qualified under section 501(c)(3) of the internal revenue code. By avoiding classification as a private foundation, we are able to offer greater tax advantages than a private foundation.
In addition to the tax advantages, donating to a community foundation also offers a donor more flexibility in the timing of gifts. A tax deduction is available the year of the donation, but the ultimate distribution to a 501(c)(3) organization may be requested at any point in the future.
Who are the current board members? A complete list of our board of trustees along with their biographies and photographs are listed in the Who We Are Section of our website.
How are board members chosen? The Foundation takes great pride in its diverse and talented board of trustees. Board members are selected whose unique perspectives and abilities, and dedication and commitment to the Foundation, help foster success. Their selection is is based on their willingness and availability to serve.
Who are the current staff members? A complete list of our staff members along with their job descriptions and photographs are listed in the Who We Are section of our website.
Is Central Carolina Community Foundation a "charity"? The Community Foundation is a charitable organization that fosters philanthropy for the lasting good of the community. The Foundation does not run programs. We help support those who do. People give through the Foundation to the community.
Why should I establish a fund with Central Carolina Community Foundation instead of giving directly to a favorite charity? By creating an endowed fund, you can support one or more charities you value each year and every year – in perpetuity. If you want broader oversight and a sense of the long-term benefits for a charity or a cause, an endowed fund is the ideal choice.
What does the foundation charge? The Foundation provides a variety of administrative services to donors, including investment management, gift acceptance and receipt, and filing of tax and legal documents. The fees vary depending on the type and size of a fund. Foundation staff will be happy to discuss this with you.
Is the Foundation set up to serve only wealthy people? Anyone can be a philanthropist by making a donation to their favorite Foundation grantmaking fund. There are more than 400 funds to choose from. Also, separate, named funds of $10,000 or more can be built over time.
How do I create a fund? Whether your interests are in the arts, education, health care, the elderly, youth, the environment or human services, Central Carolina Community Foundation can connect you with the most important issues and needs of our community, and help you realize your philanthropic goals.
A community foundation is a unique way to make a difference. Since 1984, the Community Foundation has been making the important connection between individuals personal memories, passions and dreams, and the fulfillment of their charitable goals.
How much money does it take to start a fund? The minimum contribution to establish a named fund is $10,000, but this can be built over time.
What happens to my fund? Donations to your fund become part of our permanently endowed funds, continuing to benefit the community in perpetuity. These funds are carefully invested, and every year, income from the investments is distributed through grants to nonprofit agencies serving the Midlands community. Grants can be made in the name of your fund or they may be given anonymously.
The income from your fund creates a lasting legacy that addresses the needs of today and challenges of tomorrow in the greater Columbia area. Your contribution establishes a tradition of philanthropy and develops community capital to improve the community's quality of life now and well into the future.
I want to make a difference now. How do I get started? To begin the process, contact our Foundation staff. You may know precisely which organizations you want to support, or you may need help with your selections. In either case, we can help you shape a grantmaking program that fits your needs today and carries out your charitable intent forever.
We look forward to showing you how easy, flexible and effective your charitable giving can be, and, how you can make a significant impact by giving something back to our community.
Click here to find out how easy creating a fund can be.
Who can apply for a grant? We fund organizations that have been determined as charitable under Section 501(c)(3) of the Internal Revenue Code, public entities or other charitable, educational or faith-based organizations. These organizations must also provide services in one or more of the following counties in South Carolina: Calhoun, Clarendon, Fairfield, Kershaw, Lee, Lexington, Newberry, Orangeburg, Richland, Saluda or Sumter.
What kind of projects do you fund? Any project that would qualify with the IRS as charitable spanning the fields of dropout prevention, homelessness prevention and literacy will be considered eligible for an impact grant. We also fund capacity building projects for organizations that provide services in those same fields.
We have additional grant programs that the Foundation oversees and each of these programs have their own criteria. For additional information regarding those programs, visit the Nonprofit section of our website.
Who decides which proposals to fund? Veronica L. Pinkett-Barber, Program Officer, reviews all proposals for impact grants to ensure that organizations and their programs meet the criteria and requirements established by the Community Foundation oard. The Program & Grantmaking Committee then evaluates all proposals received and makes recommendations. Their recommendations are then forwarded to the Foundation’s Board of Trustees for action and a vote of approval.
Additional grant programs have their own decision-making committees, but all grants must be approved by the Community Foundation’s Board of Trustees.
How large are your grants? An organization can request up to 50% of their total project budget for our Impact grants. Other grant programs have different criteria, so please be sure to check each program's grant criteria.
When can I submit a proposal, and when will I be notified of a decision? Impact grant proposals are accepted throughout the year and are reviewed according to the following dates.
Grant Cycle Proposals received between… …will receive notice in:
Winter January 16 and July 15 December
Spring July 16 and January 15 June
Other grant programs have different guidelines. Please refer to the grant guidelines specific to the grant program for which you are applying.
Does having an endowment with Central Carolina Community Foundation, help or hurt a nonprofits chance to receive a grant? Having an endowment with the Community Foundation has no bearing when it comes to receiving a grant. If you have an endowment with us but your organization needs a grant, go ahead and apply. You will be on even footing with all other applicants.
Do you make grants to capital campaigns? No.
Do you fund salaries and operating expenses? Specific requests for funding salaries and operating expenses under Organizational Impact are not usually granted; however, under Community Impact, if salaries and operating expenses are necessary for the success of the program for which you are seeking funding, they may be funded.
Do you award multi-year grants? Because there are so many projects in the community that deserve and need funding, we limit our grants to one year. An organization may reapply for a grant in a consecutive year, but no guarantees can be made that funding will be sustained the subsequent year. It is our hope that organizations with effective and important programs can find other support or decide to include the expense in their organization budget so that the Foundation may help start or enhance other community projects.
Does the number of people who will be affected by a grant matter? It is certainly something that the committee considers, but our efforts to positively impact the community are measured qualitatively as well as quantitatively.
Should we have a professional grant writer prepare our proposal? Utilizing a professional grant writer is not necessary. We have a simple process, and those who read the proposals are more interested in the reality of the need and the quality of the plan for addressing it than in the elegance of the grant request language. Program staff is always available to provide guidance whenever you have questions.
Can our organization submit a proposal to both grant programs (Community Impact & Organizational Impact) during the same grant cycle? Yes.
Can our organization submit a grant proposal to the Community Foundation and an affiliate fund, or other grant program during the same grant cycle? Grantees are permitted to submit grants to multiple entities during the same grant cycle.
Can our organization submit a grant proposal if it already has a current grant with the Community Foundation? Yes, if the grant request is for a different program; however, we do try to diversify funding over each fiscal year and will take into consideration any current grants.
Can an organization submit two proposals under the same grant program? No. Given the competitive nature of all grant programs, we believe your organization would be best served by focusing on one proposal.
Can I e-mail or fax my proposal? We do accept e-mail proposals, but not fax transmissions.
Do I need to mail all of the items listed on the checklist? No. Simply select the boxes that apply to your organization. However, please be prepared to provide proper documentation of this information to the Program & Grantmaking Committee upon request.
If we are pursuing our 501(c)(3) nonprofit status, can we still apply for a grant? Organizations which have not received a tax-exempt, nonprofit status can only apply for a grant through a fiscal agent that is a 501(c)(3). The proposal would need to indicate this collaboration has taken place.
Who is eligible to apply? Each scholarship has different criteria based on the donor’s philanthropic interests and goals. The criteria outline the qualifications necessary to apply for each award and can be accessed by visiting the Scholarships section and clicking on the name of the scholarship.
How do I apply for a scholarship? Applications must be submitted by each scholarship’s deadline. With four exceptions, all scholarships are due on March 15 each year. All required documents must be received by the stated date. Incomplete applications will not be considered.
Is there an application fee for Foundation scholarships? There is no charge to apply.
Can I apply online? At this time, we do not have an online application process.
May I apply for more than one scholarship at a time? You are encouraged to apply for every scholarship where you meet the eligibility requirements.
How are recipients selected? Each scholarship has a committee of people who review the applications and make award recommendations to the Foundation’s Board of Trustees for final approval.
If I receive an award, when will I be notified? All award recipients will be notified no later than June 30.
How many awards will be made and what is the value of each award? Each scholarship has a different amount of available resources so the number of awards and the value of each award will differ. Awards typically vary from $100 - $5,000.
Does everyone who applies for a scholarship from Central Carolina Community Foundation receive a scholarship award? The Foundation is not able to assist all applicants due to ineligibility issues or limited availability of funds.
If I receive an award, will it be renewable? Some scholarships are one-time only awards and some are renewable by application. You will find that information on the scholarship criteria sheets.
If I am a recipient, how will I receive my payment? All scholarship payments are sent directly to the educational institution upon the receipt by the Foundation of all required enrollment documents. We are unable to send payment directly to a student.
If I have questions about a scholarship who should I contact? You should contact Veronica L. Pinkett-Barber, Program Officer, at 803.254.5601 x331 or veronica@yourfoundation.org.
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