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CREATE A COMMUNITY FOUNDATION

A community foundation can be an extraordinary tool for strengthening local community ties and building a platform for growth. A community foundation can positively affect economic development, faith-based programs, conservation initiatives, education enhancement, health outreach, and more.

Rather than one donor's gift, a community foundation depends upon donors from its community, creating one large endowment. However, each donor names their fund, and may stay involved with grantmaking, creating a legacy in personal or family giving, forever.

See sample variance language.

A community foundation is a public nonprofit organization, and its paperwork and policies are dedicated to meet public review and disclosure. As with any new nonprofit, core documents, like Articles of Incorporation and Bylaws, must be drafted. For community foundations, it is critical that these documents include a "variance power" statement. A variance power is the hallmark of a community foundation to govern its assets. In a nutshell, it provides the board with ongoing authority to modify donor fund restrictions—a critical function when a donor's purpose can not be achieved because it becomes "unnecessary, incapable of fulfillment, or inconsistent with charitable needs." For example, a donor might create a fund restricted to a treating a disease or illness, that, in the future, is cured or eradicated. The variance power would be appropriately invoked by the board to shift the focus of the fund to a similar health or disease-related grantmaking focus.

Getting Organized. Typically, a group or steering committee (at least 5 and as many as 20) local citizens work together to begin a community foundation. Creating a focused, educated future board of directors is paramount with a range of interests and abilities:

• influential leaders with community visibility
• affluent citizens who are willing to work
• diversity in gender, race, and community leadership who have a commitment to building community ties
• professionals, especially legal, financial, and marketing positioned to share time and knowledge
• political leaders invested in their community's long-term legacy
• geographic representatives who understand their community
• people who are willing to help raise money

Groups who can frequently serve as an incubator for a community foundation include:

• Neighboring community foundations
• United Ways
• Chambers of Commerce
• Rotary Clubs
• Private Foundations
• Banks and Trust Companies
• Economic Development Groups
• The West Virginia Community Foundations Consortium

Time invested in early discussions that focus on the ideas and values of a community foundation and educating its future leaders about its legal nature is time well spent.

Philanthropy Index. Leaders who are thinking about the merits of creating a community foundation are often also concerned about that same community's capacity to give. The West Virginia Community Foundations Consortium works with the Southern Philanthropy Consortium using its new tool, the Philanthropy Index designed to measure a community's potential to build a local or regional fund. The Philanthropy Index combines charitable assets data from your county or region with your steering committee's personal insights and "gut" knowledge about the area.

For more information, learn more about the Philanthropy Index at its Web site. You should also contact members and leaders within the West Virginia Community Foundations Consortium.

Become an "Affiliate" Community Foundation. A growing trend among America's community foundations—and within West Virginia—is to create a community foundation as an "affiliate" organization. An affiliate community foundation operates much like a stand-alone community foundation, but relies on a neighboring community foundation to provide accounting and financial services, as well as all legal oversight, documents, and structures. While affiliate community foundations typically have their own board of advisors, they operate similarly to a large, geographically based donor-advised fund. This model is especially attractive and successful in rural and smaller communities. The affiliate is responsible for local grantmaking and developing local assets, while the nearby community foundation is responsible for financial management, legal expertise, and other centralized services. In other words, an affiliate does not have to create or file for 501(c)(3) status, file annual tax returns, or handle other weighty administrative functions; these are borne by the nearby community foundation. In West Virginia, 7 of the state's 26 community foundations operate as an affiliate to a larger, nearby community foundation.

Plan Your Personal Giving | Why Give to a Community Foundation
Find Your Local Community Foundation | For Professional Advisors
Create a WV Nonprofit | Information for Grant Seekers
West Virginia Statistics | Grantmakers Membership Forum

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all rights reserved.