What is a Community Foundation?
Community foundations are specialized non-profit organizations designed to serve the local community as the mechanism for establishing endowment funds - a method of ensuring a steady source of income for community support - while offering the benefits of achieving excellent investment yields through pooling of funds. Community foundations are the fastest growing sector of American philanthropy. There are over 400 across the United States, and several in Canada, Great Britain and Australia.
Community foundations provide local donors with an opportunity to engage in philanthropy in various ways and offer a variety of services. They help existing organizations build endowments; hold funds designated by donors for specific agencies; and make grants to charitable organizations for operations, special projects and capital campaigns. Community foundations also establish and increase flexible permanent funds that can be used at the discretion of the foundation board of directors to meet needs within the community. At times, a community foundation may initiate research to identify needs and convene community leaders to design new solutions to problems.
History of the Community Foundation Serving Southwest Colorado
During the mid-1990s, individuals involved with several non-profit organizations in Southwest Colorado had become aware that the “traditional” forms of funding on which they relied to support their various causes were becoming strained: Federal and State governments had reduced or eliminated funding for many programs local community members needed and desired; and local businesses and citizens were growing weary of being asked to contribute to numerous community fundraisers. Many of these organizations were successfully generating some revenue through fundraisers, but their efforts to do so were requiring a larger amount of staff time than they could commit - and they were still struggling to pay the bills.
The concept of community foundations was introduced to the local community by large organizations and through sharing information with community members in other areas who had developed endowed funds to provide earnings year after year. These non-profit professionals were drawn to the idea that a community foundation could provide them with a fiduciary board to oversee foundations assets, freeing them to focus on the mission of their respective organizations. They were encouraged to learn that donors of large gifts are often more willing to contribute to a foundation that is developed primarily to assure that community assets are managed according to donor wishes and invested to maximize their earnings potential than they are to donate directly to a non-profit organization which could experience frequent changes in management and board governance.
In the fall of 1997, various avenues for creating or joining an existing community foundation were researched. After many long discussions and public meetings, the decision was made to create the Community Foundation Serving Southwest Colorado as a Colorado 501(c)(3) non-profit organization. Wells Fargo was contracted with to provide professional services for the donor and the Community Foundation to assure the best financial tools were made available to maximize assets. With these tools, and through the generosity and passion, which many individuals possess for particular causes, the supporters of the Community Foundation are confident they have planted a seed from which abundant fruit will grow.