Community Development
Information on how nonprofits can work together in a variety of ways and build strong community connections.
XII. C. Principle–Cost/Benefit of Collaboration
The needs for joint ventures are many as are the types of collaborators which include other nonprofit organizations, businesses and governments.
Practices
Charitable nonprofit collaborations with other nonprofits reduce costs and improve operations:
- by sharing management, financial, informational technology, and other administrative staff.
- by joint marketing public relations and promotion such as cultural alliances
- by sharing facilities.
- by delivering comprehensive service.
- by reaching new clientele
Nonprofit Mergers and Alliances (1998), Thomas A. McLaughlin.
Frequently Asked Questions about Community Development
Community foundations have “funds”, the money given by donors which are named for the donor or its purpose. Each community foundation adopts gift- and fund-acceptance policies that address minimum fund size, types of fund options, types of gift mechanisms, and policies and procedures for accepting various types of assets. Foundations offer several different types of funds that address the varied interests and concerns of individual donors. The different types of funds can be separated into four basic categories based upon the restrictions imposed by the community foundation or the donor: 1. An unrestricted fund gives the community foundation complete discretion to distribute the assets in the fund for charitable purposes; 2. Grants from a designated fund are restricted to a public charity that was named by the donor at the time the donation was made to the community foundation; 3. Field of interest funds restrict distribution to a particular charitable purpose; and 4. A donor is allowed to make recommendations regarding disbursement of assets from a donor-advised fund. Source: Christopher R. Hoyt, Legal Compendium for Community Foundations 5-6 (1996). Treas. Reg. sec. 1.170A-9(e)(11) Additional Information: Greater Cedar Rapids Community Foundation.
A fund is the basic building block of a community foundation; it acts as a foundation within a foundation. Funds are named for their donors, for their purposes, or as memorials. Most funds operate as permanent endowments, distributing only their net income; some allow for distribution of principal. Funds may have broad charitable purposes, providing unrestricted income to address community needs identified by the foundation or allow donors the privilege of suggesting grants when they wish to offer donor-advised support to particular organizations. Funds may support specified fields of interest, such as the arts or human services, support specific not-for-profit organizations designated by the donor, or offer scholarship support. Funds may even allow for a combination of these purposes. -- Long Island Community Foundation
Each community foundation adopts gift and fund acceptance policies that address minimum fund size, types of fund options, types of gift mechanisms, and policies and procedures for accepting various types of assets. A community foundation honors the charitable intentions of its donors consistent with community needs and applicable laws and regulations. Any foundation can forward you their policies upon request. -- Council on Foundations
The Council on Foundations recommends that community foundations “actively involve donors in identifying and responding to community issues and opportunities.” This is facilitated by distributing an annual report to interested parties. Items to be included in the report are the foundation’s mission, board of directors, activities, and financial operations. Interested donors should also have access to fund statements, though every attempt should be made to keep private information confidential. Annual audits should also be conducted by an independent public accountant.
Community foundations are dedicated to a specific geographical area. They typically serve a municipality, metropolitan area, or county but can also serve areas of other sizes. However, community foundations usually do not serve areas larger than one state. Membership in some professional organizations places an upper limit on the geographical area that is served by a community foundation. For instance, the Council on Foundations does not admit foundations that service a geographic area larger than three states. -- Council on Foundations
A community foundation is a tax-exempt public charity that can assist a community in maintaining and improving the quality of life enjoyed by its citizens. Contributions from individuals, corporations, government sources, and other organizations are used to create a collection of permanently endowed funds within the foundation. Community foundations distribute income from the endowments throughout the community by making grants to various organizations and projects that will benefit the community and reflect the wishes of the donors. Though the word "foundation" is in the community foundation name, its tax treatment is not that of a private foundation but of a public charity. The Iowa Council of Foundations has information on what community foundations are doing in Iowa.