- What is a Community Foundation?
The Community Foundation for the Alleghenies is one of approximately 600 community foundations across the country and around the world. They are set up by people, corporations, and families dedicated to improving the quality of life in a specific region.
A community foundation is a tax-exempt public charity that allows people to establish permanent endowment funds within the confines of one large foundation, and offers an inexpensive, value-added way to establish a named family foundation. The income from these separate funds—and the principal if the donor desires—is available to respond to emerging problems and opportunities in the community.
- What does a Community Foundation do?
The Community Foundation for the Alleghenies was established in 1990 to serve donors who wish to support charities in our region. The Foundation encourages philanthropy and creates opportunities to improve the quality of life for present and future generations. Within the last five years alone, the Foundation has granted more than $6 million to qualified nonprofit organizations serving the county in the areas of the arts, education, economic development, children & youth, health & human services, heritage programs, civic affairs, religion, and environmental programs. The Foundation also provides non-financial support to community groups by offering technical assistance and capacity-building work. Finally, the Community Foundation provides philanthropic leadership in the community.
- What “community” does it cover?
The Community Foundation for the Alleghenies serves Bedford, Cambria, Indiana, and Somerset counties.
- Where does the Community Foundation get the money it donates?
Donors to community foundation range from people of relatively modest means to those with large financial resources. By establishing a fund or donating to an existing fund within the Community Foundation, donors can contribute their gifts of cash or appreciated property toward a permanent named endowment or an advised gift fund. Many donors are interested in planned giving and have the Community Foundation in their charitable remainder trusts, charitable lead trusts, or bequests.
- Why do people become donors to the Community Foundation for the Alleghenies?
Donors to the Community Foundation are people with a strong sense of community and personal commitment to making a contribution to the communities in which they live. Some donors want to support worthwhile causes in their communities, and the Community Foundation, which offers considerable expertise and familiarity with the community, can help them find the best way to commit their funds. Other donors appreciate the speed, flexibility, and ease of using the Community Foundation. Because the legal apparatus is already in place, existing forms are available so that a fund can be established quickly and easily.
- Who governs the Community Foundation?
The Foundation is governed by a Board of Directors that is representative of the region.
- How do people apply for grants?
Charitable organizations with a 501(c)(3) status may apply for grants through the Common Grant Application Format created by the Grantmakers of Western Pennsylvania. The application provides a logical order of information and clear, concise communication of the proposed project that will result in a well-informed decision regarding the grant request. A copy of the application is available from the Foundation office and can also be downloaded from our website. There are two grant deadlines—the last Friday in January and the last Friday in August.
- What are the financial benefits and tax advantages of gifting through the Community Foundation?
The Community Foundation approach to planned giving offers a number of important financial benefits to donors. Because the Foundation manages a large number of unrestricted discretionary funds, administrative costs and service fees for any one fund are minimized—meaning less overhead cost to the donor’s fund. Another important advantage is that the Federal tax code provides significant incentives for contributions to a community foundation.
The Community Foundation for the Alleghenies also has a number of different types of funds to accommodate donors who prefer the long–term strategy of endowments as well as those who want to give more actively each year. Donors can choose to establish one of these funds, which allow them to recommend grants, or can choose to contribute to an existing fund that is flexible to respond to emerging needs in the community.
- How can people give to the Community Foundation?
Individuals may choose to give now, enabling them to support local charities during their lifetime and in perpetuity. This can be done with gifts of cash, stocks, real estate, or other assets.
Those who choose a deferred gift can take advantage of key elements in estate planning. These planned gifts allow for tax advantages now for the commitment of a charitable gift later. Charitable Remainder Trusts, Charitable Lead Trusts, Qualified Terminable Interest Property Trusts, gifts of life insurance and retirement plan assets may all be used to establish a fund.
Donors may also include provisions in their wills for contributions to an established fund or to create a new fund at the Community Foundation. A contribution will save estate taxes as well as ensure the donor’s charitable interests will be supported. And with the Foundation’s Legacy Society, a donor’s will can be recognized in advance.
- What is the difference between a private, family foundation and a fund with the Community Foundation?
Often, people establish a private, family foundation because they don’t know that in many cases working through a community foundation offers an easier alternative. In addition to the tax benefits, setting up a fund through the Community Foundation has an extremely short turn around time. Additionally, the staff of the foundation becomes available to help with grants, screen applications, and take care of auditing and financial reporting requirements. Many community foundation donors are also pleased by the fact that community foundations have none of the annual payout requirements of family foundations. That means donors may leave their funds dormant when they lack the time to focus on it in any given year.
Community Foundations combine the tax advantages of a public charity with the lasting quality of a private foundation. Gifts of cash and ordinary income property to a community foundation are deductible up to 50% of adjusted gross income versus 30% for a private foundation. Gifts of appreciated property can be credited for 30% versus 20% for a private foundation. There is no exise tax on community foundations as there is on private foundations.
- How are the Foundation funds invested and managed?
Foundation funds are invested and managed in accordance with a formal investment policy. A committee made up of experts in the field continually monitors investments and advises the Foundation of any suggested changes to investment policies and procedures.
- What services do donors receive and what fees apply?
The Community Foundation provides all IRS reporting, accounting, and accountability. The Foundation does extensive grant review and site visit work and all their recommendations and evaluations are always available to donors. The Foundation assures that all grant and scholarship recipients meet the test to assure tax-deductible status. When appropriate, the Community Foundation can help donors solicit proposals to fund certain categories of interest to the donor. Donors are kept apprised of special community needs on a regular basis. We can also help donors publicize their funds or, conversely, act as a community liaison to provide anonymity for donors.
Most endowment funds are charged an annual fee of 90 basis points, which covers all money management and administrative services. Scholarship funds are charged an annual fee of 120 basis points, and flow-through funds are charged an annual fee of 4%.
- How do I contact the Community Foundation for the Alleghenies?
You may contact the Community Foundation by calling us at 814-536-7741 or toll free at 1-888-280-7741, or by emailing us at cfalleghenies@atlanticbb.net.
