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What is a Community Foundation?
A community foundation is a tax-exempt public charity created by and for people in a specific local area. It enables individuals to easily and effectively support the causes they care about with contributions while they are living, or after death through their will or estate plan.
Any donor may give to an existing fund or establish a new charitable fund at a community foundation by contributing cash or other assets. Those assets are then carefully invested by the foundation. As the fund earns interest and dividends over time, a portion of the earnings is distributed annually to support designated nonprofit organizations or specific areas of interest. |
Kallie Villeneuve enjoys a day at the Wiscosnin Rapids Zoo. She is holding an iguana as part of an interactive learning class funded through the Helen Mead Fund to support the Wisconsin Rapids Zoo. |
What is is an endowment?
The principal amount of a fund is invested and earns interest and dividends over time. This makes it an "endowment fund." Or in other words, the fund is endowed, and proceeds are used for charitable purposes. While the principal is never spent, it is invested to ensure that it will grow over the years and continue to do good things forever.
Why is a permanent endowment important?
Donors rely on endowment funds to help ensure that the charitable intent of their donations is carried out forever. The community foundation makes the distributions to meet the donors' intentions, and it takes care of all administration of the fund for donors. Donors' gifts to a community foundation are tax-deductible as allowed by law, and a donor's professional advisor can help an individual or family with large gifts to fit their personal financial or estate planning. However, it important to know that anyone can donate to funds at a community foundation; you may contribute as little as one dollar. Every dollar adds up and helps nonprofit organizations serve the community.
Organizations rely on endowment funds to help ensure that their purpose, operations, and programs are carried out forever. Charitable groups often allocate their fund's annual distributions for operating expenses to support their ongoing work in the community. Organizations count on endowment funds and annual distributions because they can be assured of the income in good economic times and bad.
What is Community Foundation of Greater South Wood County (CFGSWC)?
Community Foundation of Greater South Wood County (CFGSWC), founded in 1994, is a nonprofit charitable organization that enhances the quality of life in and around South Wood County, Wisconsin. Our mission is to build charitable endowments, provide grants, and serve as a catalyst to strengthen our community - for good, forever. Through funds entrusted to our stewardship by generous donors, we make grants to nonprofit organizations and governmental agencies to fulfill the charitable intent of our donors and help fulfill the unmet needs of our area. These grants impact social, educational, arts and cultural, health and human service, and community development issues.
Who does Community Foundation of Greater South Wood County serve?
CFGSWC serves six local communities in South Wood County and one in northern Adams County: Nekoosa, Pittsville, Port Edwards, Rome, Rudolph, Vesper, and Wisconsin Rapids which includes Biron, Grand Rapids, and surrounding townships. While most funds support charitable activities locally, some donor advised funds support organizations around the nation.
Our board of directors, made up of business and community leaders, oversees the management and policies of Community Foundation of Greater South Wood County.
What organizations are supported by the Community Foundation?
Grants are made to a variety of nonprofit 501(C)3 organizations and to community projects in areas such as education, youth, arts and culture, health and human services, and community development. For a complete list of grants made to local organizations, please see our most recent Grants Report.
How is the Community Foundation different from other nonprofits?
Generally, nonprofit organizations raise money for themselves. The operation of community foundations differs slightly. CFGSWC operates more as a type of savings account, with most of its money in an endowment, earning interest that is given as grants to other nonprofits. Most nonprofit organizations raise money, which in turn is given completely to their own cause for annual expenses.
Who are CFGSWC's donors?
Our donors are individuals, families, corporations, private foundations, and charitable organizations who wish to make a difference in the lives of others and to make the community a better place. Donors range from people of modest means to those with substantial financial resources.
Why should I become a donor?
Becoming a donor enables you to help your community in your own way for generations to come. Community Foundation of Greater South Wood County helps you meet your charitable objectives. You also have the benefits of flexibility and efficiency with the Community Foundation. Because our legal status as a public charity is already in place, you may establish your own fund and secure maximum tax advantages in a very short time.
What are the financial benefits and tax advantages of gifting through Community Foundation of Greater South Wood County?
CFGSWC offers you a number of important financial benefits through charitable giving. Because we manage many funds, administrative costs and service fees for your fund are minimized. Another important advantage is that the federal tax code provides significant incentives for contributions to a community foundation.
What services do I receive as a donor?
CFGSWC provides the IRS reporting, fund accounting, investment management, and financial accountability for funds. The Community Foundation assures that all grant and scholarship recipients meet the IRS criteria for tax-exempt status. Where appropriate, the Community Foundation helps advise recipients of the donor's intent to request proposals or fund certain categories of interest. Donors receive fund statements and are kept informed of special community needs, grant opportunities, and high quality organizations.
What tax benefits can CFGSWC offer to me?
Gifts to the Community Foundation during your lifetime are deductible to the maximum extent permissible under current tax law — for gifts of cash, that's 50 percent of adjusted gross income (and if in any year donations exceed the percentage limitations set by law, the excess may be carried over the next five years).
There's also a considerable tax benefit for gifts of appreciated property to CFGSWC. The full market value of such gifts to community foundations (long term capital gain property such as stocks and bonds, or real estate) is deductible up to 30 percent of adjusted gross income.
How do I set up a fund?
Starting a fund is simple and can easily be done in a day. You can set up an unrestricted fund to help meet a variety of needs within the community, or specify a purpose or area of concern to support with a field of interest fund. Some donors choose a designated fund which identifies a single charitable organization to support. With a Donor Advised fund, you can be actively involved in the grant-making decisions. You also name the fund you create -- for yourself, a spouse, family members, a company, or a friend.
What can I give to the Community Foundation?
We can accept cash, publicly-traded and privately held securities, real and personal property, bequests, charitable lead and remainder trusts, gift annuities and other assets. Giving real estate or securities that have appreciated in value increases the worth of your donation. Selling the property yourself would result in a substantial tax to you on appreciation, whereas a gift to the Community Foundation incurs no tax and also entitles you to a tax deduction for the full value.
Gifts to the Community Foundation may be made as part of life income agreements. An irrevocable gift that can provide an annual income paid to you for the remainder of your life. Dependent on individual circumstances, this gift can create substantial income plus inheritance tax benefits. Options include Charitable Remainder Trust or Charitable Gift Annuity.
What is the difference between a private foundation and a community foundation? Does this have importance for my taxes?
Community foundations have the tax advantages of a public charity and the personal quality of a private foundation. Gifts of cash and ordinary income property to a community foundation are deductible up to 50 percent of adjusted gross income versus 30 percent for a private foundation. Gifts of appreciated property are deductible up to 30 percent for a community foundation versus 20 percent for a private foundation. There is no excise tax on community foundations or 5% distribution requirement as there is on private foundations.
How much must I contribute to have a fund named?
Named endowment funds start at any level, and contributions may be added at any time, but the fund balance must reach a minimum of $1,000 within five years through our Build-a-Fund program.
May I give anonymously?
Yes. The Community Foundation respects the donor's privacy if he or she does not wish to be recognized publicly.
How are funds invested? Can I tell CFGSWC how and with whom to invest my funds?
The Community Foundation Finance Committee selects investment managers and monitors their performance in the CFGSWC Investment Pool. Talk to a Community Foundation representative to learn more about our Investment Policy. You may also view our Investment Policy online.
Can you help me find effective charities to support?
Yes. Our professional staff is knowledgeable about many nonprofits and is happy to help.
What if I don’t have a favorite charity or cause?
You can give to the CFGSWC Community Grants Fund. Each quarter CFGSWC staff and the Grants Committee reviews requests and determines grants to appropriate local charities based on needs. |
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