FREQUENTLY ASKED QUESTIONS
Community foundations are independent philanthropic organizations working in specific geographic areas which, over time, build permanent collections of endowed funds contributed from many donors. With more than 700 community foundations nationwide holding roughly $45 billion in assets, they comprise one of the fastest-growing sectors of philanthropy in the United States today.
A community foundation offers a number of important financial benefits through charitable giving. Briefly, one foundation managing many funds is more economical than individually-administered funds. As a 501(c)(3) public charity, gifts to the community foundation are eligible to receive the maximum tax advantage currently allowed by law. For more information, see the Benefits page.
Community foundations differ from private foundations (family foundations) in that they are supported from a broad group of individuals, families and corporations versus single individuals, families or businesses. Because community foundations are classified by the IRS as a publicly-supported charities (donations from a large group of supporters), they receive tax benefits not enjoyed by other types of foundations
No. The relationship between community foundations and professional advisors is crucial. As part of the estate-planning process, community foundations work very closely with professional advisors to create a personalized, simple giving strategy for donors at all income levels.
No. Because funds are combined and operating expenses shared, even modest donations can have an impact.
A community foundation handles all fund-related tax reporting and accounting and various administrative tasks. As well, it helps benefactors create criteria for grants and scholarships; generates awareness of donor funds; identifies potential grant and scholarship recipients for fund-eligibility, and follows up to ensure the proper use of the grant or scholarship. A community foundation helps identify community needs and matches them to the donors’ interests.
Yes. NBCF has an obligation to operate as efficiently and conscientiously as possible and a fee is assessed to help cover the community foundations’ operating expenses. But that cost usually is a relatively small portion of the interests on investments.
Absolutely. Benefactors may be involved to the degree they desire. See “Funds” for more information.