One of the fastest-growing areas in philanthropy, community foundations are nonprofit, philanthropic organizations that help improve the lives of people in a specific geographic area. By pooling together the financial resources of individuals, families, and businesses, community foundations are able to generate sustainable and permanent assets to support charitable activities and local nonprofits. In many communities, they are a newer construct; however, in many parts of the country, they have quite a history. In 2014, the oldest community foundation, The Cleveland Foundation, turned 100.

In a 2008 publication entitled The Balancing Act, The Mott Foundation outlined the three main roles of a community foundation as follows:

“The community foundation enables people to leave a legacy that will forever benefit their community. ACF fund advisors are local residents who are very much involved in their communities. They see the needs and respond with funding solutions in a way that most benefits their homes the most.”

Paul Rupple – Fundholder, Donor and Past Member ACF Board of Directors

The Three Legged Stool — A Foundation for Leadership

Community foundations Relay on partners and donors to achieve the greatest impact.

Grantmakers

Community foundations build local capacity by raising charitable dollars that can be granted to other nonprofits in the community. Whether it is in the area of arts and culture, community development, education, environment, or health services, community foundations pool resources that can be used to address community needs or support a charitable activity. Community foundations are knowledgeable about local nonprofits and are in an ideal position to identify organizations addressing a need or making positive contributions to the community.

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Vehicle for Philanthropy

Community foundations help individuals, nonprofits, businesses, and communities fulfill their charitable goals. Instead of creating their own expensive infrastructure, many individuals and entities work with a community foundation in order to maximize the tax benefits, keep administrative costs down, and leverage the grantmaking knowledge of the community foundation. Many community foundations have hundreds or thousands of different charitable funds, each established to fulfill a different purpose or address a different need in a community.

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Community Leader

Community Foundations play a key role in identifying and solving community problems. Because community foundations work with a wide variety of nonprofits, donors, grantees, and government entities, they have special insight into community issues. They are able to leverage financial and human resources to provide community leadership when needed.
The community foundation field is diverse and vibrant; with over 700 community foundations across the United States, each one is a little different. The National Standards for Community Foundations is a national certification program that ensures a foundation is exemplifying best practices in each area of work.

Stories of Impact
Alaska Community Foundation offers many unique advantages over creating a private foundation. Here are just a few for you to consider:

A gift of cash to a charitable fund allows a deduction of up to 50% of a donor’s Adjusted Gross Income (AGI). A gift of cash to a private foundation only allows you to only deduct up to 30% of AGI.

There are fewer investment restrictions on a community foundation’s fun

By creating a charitable fund, you may deduct gifts of closely held long-term appreciated stock at its fair market value, up to 30% of AGI. If the same gift is given to a private foundation, deductions may be limited to its cost basis up to 20% of AGI.

No tax is imposed on the investment income of a charitable fund because it is a component of a public charity. Private foundations pay up to 2% federal excise tax on their investment income and net realized capital gain.

There are no minimum distribution requirements for a charitable fund at a community foundation. A private foundation must annually distribute at least 5% of its net investment assets, regardless of whether the amount is actually earned.

There are fewer IRS reporting requirements on community foundation grants and funds. Requirements that do exist are handled by the foundation’s staff at no extra charge to individual donors.

A charitable fund is easy and inexpensive to establish. Unlike a private foundation which requires you to create a new non-profit organization, apply for tax-exempt status, pay filing fees and incur legal and accounting expenses, The Alaska Community Foundation (ACF) takes care of everything.

You can choose to remain anonymous.
A private foundation must make available to the public the name and address of any substantial contributor.

By creating a charitable fund, you may deduct gifts of closely held long-term appreciated stock at its fair market value, up to 30% of AGI. If the same gift is given to a private foundation, deductions may be limited to its cost basis up to 20% of AGI.