What are community foundations?
Community foundations are philanthropic organizations whose mission is to enhance the quality of life in a local area. They 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. Community foundations also assist local nonprofit organizations in other ways, including helping them grow over time by managing assets for their benefit.
Most community foundation assets are held in separate funds established by individuals, families, charitable organizations, or corporations. Each fund may have a special purpose, but the foundation board of directors, representing the community, oversees them all. The IRS recognizes community foundations as public charities in part because of the support they receive from the general public and in part because their boards broadly represent the areas served. This special recognition gives community foundations certain privileges and tax advantages that private foundations do not enjoy.
Currently, Montana has over 100 community foundations across the state. The Anaconda Community Foundation has based its framework on best practices recommended by the National Council on Foundations.
How do community foundations work?
A community foundation is governed by a board of directors of community leaders and is administered by professional staff. Operating expenses are paid from management fees, through grants and partnerships with local and national foundations, and from gifts designated by donors to cover foundation operating costs.
How does a foundation impact Anaconda?
If in the late 1800’s Marcus Daly had started a Foundation with a donation of $50,000 and directed that 10% of its earnings were to be reinvested and 90% of its earnings be spent in the community, by the year 2000 the $50,000 would have grown to $85,000 and $290,000 would have been spent in the community. If at the same time 50 of Mr. Daly’s fellow citizens had each put $1,000 into the Foundation, and directed that 50% of the earnings be reinvested and 50% of the earnings be spent in the community, by the year 2000 the $50,000 would have grown to $500,000 and $530,000 would have been spent in the community.
Between the two the original $100,000 would have grown to $645,000 and $820,000 would have been spent in the community. Of more importance is that original gift would continue to grow and give forever….
In brief, what is the Anaconda Community Foundation?
The Anaconda Community Foundation was established in 2007. It is registered with the Montana Secretary of State’s Office and has been granted IRS 501(c)(3) Status. The
Anaconda Community Foundation is:
- A publicly-supported tax-exempt organization formed to attract, manage and distribute the income from gifts of various assets for community needs and community development.
- A grantmaker and adviser available to help quality nonprofit groups provide and improve much-needed services, e.g. in health, education, the arts, and social services. It is a builder of communities that aims to strengthen our sense of community.
- A philanthropic services corporation designed to help individuals, businesses, nonprofit organizations, and private foundations more effectively support the needs of Anaconda/Deer Lodge County and beyond. People do not only give to the Anaconda Community Foundation; they give through the Anaconda Community Foundation.
What is the Anaconda Community Foundation mission statement?
The mission of the Anaconda Community Foundation is to cultivate generosity to
build Anaconda’s future. The Anaconda Community Foundation is established to build a permanent financial legacy to support charitable work in the Anaconda area forever.
We accomplish this by:
- Promoting philanthropy at all levels of giving
- Seeking permanent endowment funds and pass through funds from a diverse and ever-widening group of donors;
- Helping donors achieve their charitable and financial goals by offering services that make charitable giving easy, effective and satisfying;
- Providing responsible and effective financial management;
- Distributing earnings from investments according to community needs and donor intent; and,
- Championing good works in the community of Anaconda/Deer Lodge County.
What are the goals of the Anaconda Community Foundation?
The Anaconda Community Foundation’s purpose is to support organizations that work in various ways to strengthen the communities in Anaconda/Deer Lodge County. Our primary goal is to build, with the help of many donors, permanent endowment funds and pass through funds that will be a steady and perpetual resource for local charities. We and future generations of community foundation leaders will use the income from this endowment fund to make grants and provide other forms of support to nonprofit organizations that do essential or innovative work in our county.
Secondly, we hope to increase the level of local giving by making it easier for people to act as philanthropists.
Thirdly, we aim to initiate grants when it appears that a major community issue can be addressed by showing leadership in giving.
We try whenever possible to cooperate with numerous individuals, corporations, private foundations, and other local non-profit organizations to bring different competencies and resources to bear on local problems. Where we can bring people together to focus on shared problems, we aim to do so.
How is the Anaconda Community Foundation funded?
Our major source of support comes from contributions of cash, securities, and real property from local individuals, families, and foundations. Such contributions may be made as gifts and some may be set up as bequests or as planned gifts. Annual fees are determined by the board for handling funds in order to cover administrative expenses. In addition, some gifts are designated to support our operating costs.
What kind of participation has the Anaconda Community Foundation experienced to date?
As of January 2020, the Anaconda Community Foundation has just under $1 million in assets. Over $350,000 is endowed, $10,000 is available for grants in 2020 and $20,000 is available for programs.
Is the Anaconda Community Foundation in competition with other charities in Anaconda/Deer Lodge County?
No. The Anaconda Community Foundation is established to serve all the needs of Anaconda over the long term. The Anaconda Community Foundation awards grants to those very organizations since their success adds to the betterment of our community.
Recipients will be identified on a semi-annual basis through the foundation grant program. The foundation will rely on our community’s citizens to identify those needs.
How does the Anaconda Community Foundation differ from the United Way or other charitable groups?
We differ in three principle ways:
1. Most nonprofit organizations have a specific mission. The Anaconda Community Foundation’s mission is very broad: to improve the quality of life in Anaconda/Deer Lodge County. This breadth of mission reflects our ability to make grants in any area with a charitable, economic, or community purpose.
2. Most nonprofit organizations must conduct annual fundraising drives to support their current operations and funds raised during a given year are generally used that same year. Community foundations, by contrast, do not depend on annual campaigns. A community foundation’s grantmaking and operations are supported by annual income from endowments and pass through funds.
3. We may award grants to other charitable organizations under United Way.
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 only a portion of the income generated from investments. Any contribution made by any donor that is not specifically designated will be deposited in the general endowment fund and a receipt will be given to the donor advising them of that contribution.
What happens to a contribution to the Anaconda Community Foundation?
The Foundation has three categories of funds, an Endowment Fund, a Betterment Fund, and a Pass Through Fund.
Endowment Fund: In an endowment the principle can never be withdrawn, only the interest may be spent. The Foundation’s policy is to allow 50% of the interest to be withdrawn and spent and the other 50% to be added to the principle for it to grow
perpetually. This is the foundation’s core for its long term growth.
Pass Through Fund: In the Pass Through the money is available to be spent immediately or over a period of months or years, depending on the purpose of the fund. 100% of the funds may be spent at any time.
For donations less than $5,000 the money will be deposited into one of the Foundation’s
designated funds as requested by the donor. This can be to either an endowment or a pass through fund.
For donations of $5,000 or more, the donor may open a personal fund if he/she chooses. The donor may name the fund and designate it for a particular purpose (area of interest) e.g., education, mental health, etc., or leave it open for the donor to distribute the money in any way the donor wishes (donor-advised fund). All distributions must meet the IRS 501(c) (3) requirements for charitable use.
How does a community foundation invest its funds?
Community foundations invest their funds as recommended by their investment committee in consultation with outside professional investment advisers. Endowment funds are invested for long term growth. Pass through funds are invested short term as this money must be readily available for distribution at the donor’s request. Our Investment Policy spells out the details of our investment policies and procedures. An annual report will be available to the public and will be provided to each participant in the year’s operation. The annual report will demonstrate projects funded, donations received and all expenses incurred.
Why contribute to a community foundation?
Community foundations are defined, in part, by the specific geographic areas that they serve. They are, therefore, permanent local institutions. Note: donor advised funds may be donated to any qualified 501(c) (3) in the USA, i.e., a university, through a foundation. Within the local area served, community foundations support the broad interests of
communities. The Anaconda Community Foundation will support the most urgent needs throughout Anaconda/Deer Lodge County, even as those needs change from generation to generation. The flexibility and some of the powers granted to community foundations are unique. A gift to the Anaconda Community Foundation is truly a gift that keeps on giving.
Is the Anaconda Community Foundation only for those who wish to donate large amounts of money?
No. As the example of Marcus Daly and his fellow citizens showed, large amounts and small amounts when combined can have long lasting benefits on an annual basis for our community. The Anaconda Community Foundation exists to assist any individual or family or organization who has a desire to be a financial partner in Anaconda’s future.
What are the tax advantages of donating to the Anaconda Community Foundation?
The Anaconda Community Foundation is an IRS-qualified 501(c)(3) organization and is not a private foundation as defined by 509(a)(1), which means that all contributions are eligible for maximum tax deductions, whether made by an individual or a business. As a publicly-supported charitable organization, the community foundation offers certain tax advantages to donors which a private foundation cannot offer. To give just one example, a gift of cash to a community foundation permits a deduction up to 50% of adjusted gross family income, while a gift of cash to a private foundation permits a deduction only up to 30% of adjusted gross family income.
Working with your accountant, the Anaconda Community Foundation is also able to handle more specialized forms of giving, including gifts of stocks, bonds, mutual funds, real estate, insurance policies, and many other types of assets.
Who are the current board members?
The Anaconda Community Foundation has an eleven member Board of Directors representing a broad cross section of our community. The terms of office for board members is three years and vacancies are filled by the board. The board is divided into five standing committees: Executive, Development, Finance, Public Information and Awards.
Where does the Anaconda Community Foundation get its money for grants?
Grant money comes from the endowment interest and from pass through funds which is money donated by the community.
How do I donate to the Anaconda Community Foundation?
Simply contact our office at 406.563.5259 or email email@example.com
Is it complicated to start a fund?
Just fill out a simple form and we do all the rest.
How can an organization apply for a grant from the Anaconda Community Foundation?
Complete grant guidelines are available on-line at the foundation website: http://www.anacondacommunityfoundation.org,
or from the community foundation office, which is located at 118 E. Seventh Street on the Third Floor. An organization must submit a grant application that describes the nature of their organization, their general business, and the specific details of their project. It should also address the other questions outlined in our grant guidelines. Organizations are strongly encouraged to contact the foundation directly to get feedback from staff on the potential fit of a proposal with the mission of the foundation.
How does the Anaconda Community Foundation select grant recipients?
An interested non-profit submits a completed application to the Awards Committee who will determine if the request meets the criteria of the Foundation. Applicants may be requested to make a five to fifteen minute presentation to the Awards Committee. The Awards Committee submits its recommendation to the Board for approval. Grants are usually awarded in the spring and fall of each year.
What size grants are reasonably likely?
At the present time from $500 to $1,000.