In an ancient parable, a group of blind men encounters an elephant for the first time. Each touches a different part of the elephant and comes to a different conclusion about what elephants are like. One feels its trunk and concludes it must be like a thick snake. Another feels its leg, surmising it is like a tree. Still another feels its side and believes it is like a wall. Each man leaves with an incomplete concept of what an elephant is.
Community foundations can be a lot like that elephant. Often, people discover their local community foundation through one aspect of its work, and they base their understanding of the foundation on that limited experience.
For instance, students and their parents may discover a community foundation while looking for scholarship opportunities. Staff and volunteers for nonprofit organizations may discover a nearby community foundation while looking for local grants. And people looking to give to charity may discover their local community foundation through a fundraiser like Match Day.
As a result of how people discover and initially engage with community foundations, they often walk away with an incomplete picture of what the foundation does and can do. To help address that common issue, let’s take a high-level look at what community foundations do, how they are funded and operated, and what services they offer their local communities.
Table of Contents
What community foundations do
First and foremost, a community foundation is a foundation. Like most foundations, community foundations are primarily funders. Rather than offer charitable services directly to the public, foundations provide funding to the organizations that do so.
Community foundations accomplish their work through charitable funds, a series of financial accounts owned by the foundation, each of which has its own founder, donation history, investment strategy, and charitable purpose. Funds can be established by individuals, families, businesses, nonprofit organizations, or the community foundation itself.
Typically, community foundations’ funds can support nonprofit organizations and charitable causes in several different ways, including through:
Scholarships
Many community foundations offer financial assistance for students attending or planning to attend a college or university. These scholarships can have various eligibility criteria that students must satisfy—such as having graduated from a particular high school, maintaining a certain GPA, or majoring in a specific topic—but they must all be awarded as the result of a neutral and nondiscriminatory application and selection process.
Scholarships at CFSEK
CFSEK is home to more than two dozen scholarship funds. Our scholarship applications are typically available between January and March of each year. During 2023, our scholarship funds provided $102,000 in financial aid to 63 students. You can read our Summer 2023 Charitable Connection newsletter for a full list of recipients.
P.S. Check out our top five scholarship tips for SEK students interested in applying for one of our scholarships.
Competitive Grants
Community foundations are also home to competitive grant cycles. During a competitive grant cycle, nonprofit organizations in the community can apply for funding for a specific project or need.
How a grant cycle is structured varies from one community foundation to the next. Some foundations (like CFSEK) offer open application periods during which any eligible organization can submit a grant proposal. Others accept letters of interest from organizations, and then, based on those letters, invite select organizations to submit a full application.
Competitive grants at CFSEK
As of 2023, the Community Foundation of Southeast Kansas hosts six competitive grant cycles at different times throughout the year. In 2023, our combined grant cycles distributed $330,402.43 total to 81 Southeast Kansas organizations. Each of our affiliates, the Columbus Area Community Foundation, Fort Scott Area Community Foundation, and Girard Area Community Foundation, offers its own grant cycle for projects in its region.
Grants From Donor-Advised Funds
Grants from a donor-advised fund are a type of noncompetitive grant offered by community foundations. Donor-advised funds are funds in which the person who establishes the fund continues to play a role in it by donating to it and recommending grants from it over time.
Donor-advised funds at CFSEK
As reflected in our 2021 annual report, at the end of 2021, CFSEK hosted 36 donor-advised funds. Those funds accounted for about 32% of our grants by dollar amount that year.
P.S. Check out our list of DAF dos and don’ts—essential reading for anyone who has or is interested in starting a donor-advised fund.
Other noncompetitive grants
In addition to donor-advised funds, community foundations host other types of funds that make noncompetitive grants to local organizations. These can include designated funds, which always distribute grants to the same one or more organizations identified when the fund was originally created; field-of-interest funds, which can make grants to one or more organizations that work within a particular field of charitable interest; and agency funds, which are like designated funds but are established by a nonprofit to make future distributions to itself.
How community foundations are funded and operated
So, that’s where community foundations’ money goes, but where does it come from? The answer is right there in the name: the community! But that’s not the full extent of the local community’s involvement. In addition, community foundations are staffed by local residents, and local leaders volunteer to serve on community foundation boards.
Community foundations are funded by the general public
Many foundations are private foundations, meaning they were established and are primarily supported by one wealthy individual, family, or business. In contrast, community foundations are funded by many people in the communities they serve.
For example, CFSEK counts 32 individuals, couples, and businesses among its founders. During 2021, nearly 600 donors contributed to CFSEK, and more than 7,000 have since our founding in 2001.
This distinction goes beyond just the source of funds, though. Community members also help direct the work of the foundation by establishing new funds to address their own favored charitable causes. As we put it in our 20th anniversary newsletter, “Every new fund is a new opportunity for donors to pursue their charitable goals, and CFSEK to pursue its mission, in a new way.”
The distinction is also important for tax purposes, because it means that community foundations are classified as public charities. As a result, donations to a community foundation receive the maximum tax benefit permitted for charitable contributions under federal law. In contrast, donations to private foundations receive a reduced tax benefit.
Community foundations are staffed by local residents
Community foundations have a specific, limited geographic zone of interest. Because of this, they tend to attract employees and volunteers who live in and care about that area.
CFSEK’s Staff
The Community Foundation of Southeast Kansas employs five professional staff members, our Executive Director Devin Gorman, our Program Coordinator Sherri Stephens, our Accounting Manager Kim Lynch, our Donor Relations & Community Outreach Coordinator Joshua McCloud, and our Marketing Coordinator Matt Buck.
Community foundations are governed by community leaders
Community foundations are not only funded and staffed by members of the local community; they are also led by local community leaders. Every community foundation is led by a board of directors. These directors are typically volunteers from the community or communities served by the foundation.
The CFSEK Board of Trustees
At CFSEK, we call our board of directors the board of trustees, which emphasizes the trust our donors have placed in the Foundation. Members of our board of trustees are all local volunteers, and each serves up to three consecutive three-year terms.
The board’s Finance & Investment Committee and Executive Committee meet monthly (except during December), and the full board of trustees meets once a quarter, to oversee the Foundation’s operations.
How your community foundation can serve you
A community foundation’s unique role in a community means that it offers a wide range of services to members of the community.
Services for charities
These services are available not only for 501(c)(3) public charities, but also for government agencies, schools, and religious institutions.
- Competitive grants. Community foundations’ competitive grant cycles are an important funding tool for local organizations.
- Agency funds. Agency funds are a way that local organizations and community foundations can help each other. In an agency fund, a nonprofit organization donates to the community foundation to establish a fund that will be invested and provide ongoing support back to the nonprofit.
- Access to new donors. Community foundations and the charities they serve often appeal to different groups of donors. So, when agencies partner with the community foundation, they can gain exposure to new donors who wouldn’t know about them otherwise!
Services for students
- Scholarships. As noted earlier, community foundations offer scholarships for local students.
- Grants for school-sponsored projects. But scholarships aren’t the only service a community foundation can offer students. Because community foundations can provide grants to schools, schools can apply for grants to fund a student’s or student group’s special projects.
Services for charitable givers
- Benefit multiple organizations with one gift. Because community foundations house so many different funds with so many different charitable interests, donors can choose to benefit multiple organizations with a single gift.
- Create a legacy by establishing a fund. If none of the funds at a community foundation support the specific organization or charitable interest that a donor wants to support, he or she can establish a new fund at the foundation that does! In doing so, the donor can even select a name for the fund, creating a lasting legacy in the community.
- Join a giving circle. Some community foundations—including CFSEK—offer giving circles. A giving circle is a group of donors who come together to jointly decide where their charitable dollars should be used. Visit our Giving Circles page to learn more!
Putting it all together: What is a community foundation?
To summarize, as we put it on our FAQ page, a community foundation is a tax-exempt, independent, publicly supported, philanthropic organization established for the long-term benefit of a defined geographic area. Community foundations are an exciting tool for raising and saving money to improve a community long into the future through charitable giving.
In some versions of the parable of the blind men and the elephant, the men discuss their findings with each other and realize that they were each only getting a part of the full picture, that the elephant is more than any one of them had understood. Likewise, we hope this post has given you a more complete picture of what your local community foundation is and how you can use it to improve the quality of life in your area!
If you’re interested in learning more about the services offered by the Community Foundation of Southeast Kansas, please contact us today!