“Community foundations” is a perfect descriptor. They are foundations for the delivery of generosity and work, like well-planned and poured concrete foundations, seating and securing the community that sits atop them.
Sue Bornick, executive director of Eau Claire Community Foundation, explains that its mission is to strengthen its community by assisting donors in establishing charitable legacies, by making grants, and by serving as a catalyst to address community needs.
“Our vision is that we will be widely recognized in the area as the leading community resource promoting philanthropy, collaboration and innovation, and building endowments,” she said.
Eau Claire, Chippewa Falls and Menomonie are all graced with community foundations, which are funded by local folks to serve local folks. Here is a look at the Chippewa operation.
The Community Foundation of Chippewa County provides manifold ways to manifest gratitude. Permanently-endowed funds enhance the area’s quality of life now and for generations to come, and the foundation allows people to pool their donations, yet give to causes they care about in the form of grants and distributions to nonprofit organizations.
“It also provides a great way to always be involved with, and remembered for, one’s investment in the community,” said Melinda Haun, CFCC executive director.
The foundation is the largest of the three in the Chippewa Valley, with more than $12.6 million in assets under management and 187 funds. Big assets mean big giving. The foundation has granted and distributed more than $3.8 million back to Chippewa County communities since 2001, Haun said, noting that for those wanting to give, there are myriad ways to contribute.
Instruments of giving
Through CFCC, people can give at different points in their lives and for different purposes. Options include:
- Designated funds to a specific nonprofit organization or purpose
- Field of interest funds aimed at a broad area, such as the arts, youth programs or animal welfare
- Unrestricted funds to address ever-changing community needs
- Seedling funds allowing donors or tax-exempt groups to start a named fund, bringing it to the endowed level over time with lifetime or estate gifts
- Agency funds, where nonprofits may establish an endowment fund to serve its purposes.
There’s also a heap of charitable instruments via CFCC.
“You can make an outright gift of cash, stocks, bonds, real estate or other assets to the foundation. Your charitable gift qualifies for tax advantage under federal law,” Haun said.
“You may bequest by will, where you designate a gift or portion of your estate to the foundation, and in some cases receive a substantial reduction in federal gift and estate taxes.”
Other methods include a charitable gift annuity that allows donors to get immediate tax benefits and ensures the donor or a loved one receives fixed quarterly or annual income payments for life.
A charitable remainder trust brings income tax benefits the year it is established, with your cash or property paying annual income to you or another beneficiary for life. After your death, the rest of the trust transfers to the foundation and goes into a charitable fund of your choosing.
Lastly, there’s a charitable lead trust that pays a fixed amount to the foundation for a predetermined number of years, before the assets are transferred to the beneficiaries. In some cases there is a substantial reduction in federal gift and estate taxes.
The best dividend
Whichever instrument a philanthropist might choose, the best dividend isn’t a reduction in taxes or being able to dictate where the money goes, but honoring the community where one flourished.
“I love that we are able to provide an opportunity for people to give back to the community in a permanent, lasting way — investing in causes they care most deeply about,” Haun said.
“It is also very gratifying to be able to work with families who have gone through a loss by helping them honor the memory of someone close in a permanent, meaningful way. What makes community foundations unique is that we are able to provide a simple, effective and highly personal approach to giving, tailored to each individual’s charitable and financial interests.”
Haun also loves that the giving rises and rises, like a tree in rich soil and full sun.
“I love our growth,” she said. “In just three short years, the Community Foundation of Chippewa County has grown from $5.4 million to $12.6 million in assets under management; this is a very positive reflection on our community.”
The four principles
The difference between charity and philanthropy via community foundations is due to how the foundations were founded. The first community foundation was started in 1914 by Frederick Goff, president of a Cleveland bank. The four principles he identified 100 years ago are the same ones that exist today and form the basis of the community foundation concept.
“That they’re essentially unchanged over all these years amazes me,” said Georgina Tegart, executive director of the Community Foundation of Dunn County.
She described the four principles as:
- Variance power (to ensure someone’s legacy can be updated for the times)
- Economy of scale (by pooling everyone’s dollars)
- Democracy (foundations aren’t just for the Rockefellers of the world, but for everyone)
- Community ownership and governance (a board of directors oversees all of a community foundation’s giving).
Through the giving and the perks of the four principles, this area grows richer in all ways.