COMMUNITY FOUNDATION 101
An endowment is a type of fund that is established to produce income for charitable purposes. A typical endowment fund will distribute only the income generated from investments; its principal will never be distributed. This is to ensure that endowment funds remain permanent as long as the principal is never invaded and as long as the distribution rate reflects the long-term growth patterns of investment.
No. Some donors prefer to see a greater percentage of their gift distributed annually.
Yes. All community foundations are independently organized and operated. There are 17 community foundations in Connecticut, each serving a defined geographic area.
A community foundation is supported by the public – individuals, families, businesses and organizations. Private foundations, by contrast, are generally supported by a single individual, family or business. Because of a community foundation’s broad base of support, community foundations are classified by the IRS as publicly-supported charities, thus giving them tax advantages not enjoyed by private foundations.
Community foundations are committed to maintaining a focus on the perpetuity of its funds and are responsible for providing a stable source of funding for organizations in the local communities. Most community foundations seek the services of outside investment professionals, selected and monitored by the community foundation’s Investment Committee, who manage the endowment in compliance with the Foundation’s Investment Policy Statement.
Community foundations offer the best tax advantages for charitable donations available under law. Community foundations are a publicly-supported nonprofit organization, qualified under section 501(c)(3) of the internal revenue code.
Contact Susan Sadecki, President & CEO of Main Street Community Foundation, at 860.583.6363 who would be happy to answer any questions.