Community foundations

By Fran Walker
Manager, Information and Publications
Community Foundation Network (CFN)

Community foundations are charities committed to supporting projects that engage local people in making their communities better places to live. To that end, they target grants that make a genuine difference to the lives of local people. They manage funds donated by individuals and organisations, create endowments, and act as a vital link between local donors and local needs connecting people with causes, and enabling individuals to achieve far more than they could by themselves. Since the 1980s, a nationwide network has developed and today there are around 60 community foundations covering 90% of the UK population, from inner cities to remote rural communities.

One of the country's fastest growing forms of philanthropy, community foundations are endorsed by many major public figures and leading companies. They work with many kinds of donors - individuals, families, businesses, charitable trusts and statutory bodies.

Importantly, they are independent and 'cause-neutral'. By providing expert advice and using their in-depth local knowledge, they help your giving make a lasting impact in the areas that you care about most.

Rewarding experience

Giving to your local community can be a rewarding experience. There's a unique sense of satisfaction in knowing that you are making a real difference to the lives of others, especially close to home. Other benefits include:

• Maximum impact - the foundation's expert guidance and in-depth local knowledge mean that you can achieve far more with your giving than would otherwise be possible.
  
• Minimum hassle - the community foundation takes care of time-consuming administration, while you focus on the causes you care about.
  
• Flexibility - you're free to set the terms of your own fund, and to decide on the level of involvement that suits you.
  
• Regular feedback - you will be kept up to date with exactly how your money is being spent, and what recipients have achieved.
  
• Active engagement - you have the opportunity, if you wish, to meet and be involved with the people and projects supported by your fund.
  
• Cost-effectiveness - community foundations help you to give tax efficiently, while keeping administrative costs to a minimum.
  
• Long-term effectiveness - by setting up an endowed fund, you can make a real difference to people's lives, now and for years to come.

Furthermore, community foundations can help improve the effectiveness of your charitable giving by differentiating between the hundreds of charities and community groups that compete for your attention.

How to engage with a community foundation

Donors have several options in giving through a community foundation:

• Donations can be pooled in a single, general fund, so that donors can contribute to a wide variety of causes in a specific area.
  
• Donations can be directed to themed funds, which address issues such as children or older people.
  
• Donors can establish a separate, tailor-made named fund.

Setting up your own named fund at a community foundation opens up new opportunities for making a real difference with your giving, and is simple with minimum administrative hassle. It allows you the freedom to achieve your charitable objectives, while the community foundation takes care of all the administration, from seeking out projects that match your charitable aims to ensuring your gift is tax-efficient.

As a first step, you should discuss with foundation staff what you want your fund to achieve, and how it should be structured. You will be guided through a variety of options, depending on whether you have a lump sum immediately available or whether you plan to build an endowed fund (usually of at least £25,000) over a longer period.

Once your fund is up and running, it is up to you to determine your level of involvement with funding decisions as you lever the foundation's local knowledge to direct your money to those organisations and projects that have been assessed for their value to the community.

The community foundation will continue to monitor recipients of grants on your behalf and keep you informed of their progress. If you wish, you can engage more closely with the causes you care about by giving time and other resources.

Meanwhile, professional investment managers will be applying their expertise to build the value of your fund.

Each community foundation is governed by a board of trustees from a wide variety of backgrounds with a broad range of skills and experiences who guarantee efficient delivery of grants and manage and apply financial resources in an ethical, professional and constructive manner. Comprehensive grant-making policies and procedures, combined with extensive knowledge and understanding of the local community and its needs, ensure grants are targeted responsibly and carefully.

Established in 1991, Community Foundation Network (CFN) is the national network linking, promoting and supporting over 60 community foundations in the UK. For more information, or to locate your nearest community foundation, please visit CFN's website, www.communityfoundations.org.uk.