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Chisholm Trail Communities Foundation FAQs
What is a community foundation?
A community foundation is a tax exempt, non-profit, publicly supported, philanthropic institution with the long term goal of building permanent, named funds for the broad-based charitable benefit of the residents in a given area. The common mission of every community foundation is to enhance the quality of life in the local area. Community foundations carry out this very broad mission by building a permanent endowment fund and using the annual income to support a variety of local nonprofit organizations through grants and special projects.
Most community foundation assets are held in separate funds established by local individuals, families, businesses, or charitable institutions. Each fund may have a special purpose, but the foundation board of directors, representing the community, oversees them all. The IRS recognizes community foundations as public charities in part because they receive support from the general public and their boards broadly represent the areas served.
How does a community foundation work?
A community foundation is governed by a board of directors of community leaders and is administered by professional staff. Operating expenses are paid from management fees, through grants and partnerships with local foundations, and from gifts designated by donors to cover the community foundation’s operating costs.
Are there other community foundations in Texas?
There are 39 community foundations in Texas, including Abilene, Amarillo, Austin, Bryan/College Station, Dallas, Houston, El Paso, Kerrville, Lubbock, Midland/Odessa, San Angelo, San Antonio, and Tyler, among others. Just as we serve Williamson County, each community foundation is defined in part by serving a specific geographic area. There are more than 700 community foundation throughout the United States. A useful tool for finding specific community foundations in other parts of the country can be found at www.communityfoundations.net.
How do community foundations differ from private foundations?
A community foundation is supported by a broad and ever-widening group of unrelated individuals, families, corporations, and institutions. The only thing that connects all of our donors is a desire to improve local communities. Because of their broad base of support, community foundations are classified by the IRS as publicly-supported charities. This gives community foundations tax advantages not enjoyed by private foundations.
Community foundations are also allowed to treat all funds within their control (known as ‘component funds’) as part of a single corporation. This gives them administrative advantages over private foundations as well. Private foundations, by contrast, are generally supported by a single individual, family, or business. Rarely does it make sense to establish a private foundation if the principal endowment is not large.
How do community foundations differ from other nonprofit organizations?
Most nonprofit organizations have a specific mission. By contrast, a community foundation’s mission is very broad: to improve the quality of life in a given area. This breadth of mission reflects our ability to make grants in any field of interest with a charitable benefit to local communities. This flexibility also allows us to serve a wider group of potential donors on the one hand and, on the other, a wider group of nonprofit organizations that we consider our partners in improving local communities.
Area nonprofits benefit from having a local community foundation because the community foundation helps money stay in a community. Community foundations benefit local nonprofits in other ways, too: besides having local grant money available, some nonprofits ask the community foundation to manage an endowment on their own behalf. We call such funds ‘organizational endowment funds.’
As it grows, a community foundation gradually becomes the center for all charitable giving in a community. We help make connections between the people who want to give and the people who need their support.
What is the Chisholm Trail Communities Foundation?
We are Williamson County's community foundation. We are a 100% local institution, governed and staffed by local people who share a desire to improve our county as a whole. The Chisholm Trail Communities Foundation enables any person interested in improving any of the communities in Williamson County to establish a fund, permanent or temporary, for almost any charitable purpose that benefits local residents.
Year after year, the income from a permanent fund might be used to make grants to local charities who apply for grant support, fund scholarships for local students, or make regular contributions to one or more specific local charities. We handle the administrative details of all such funds, making it easier for more people to get involved in long-term philanthropy.
How does Williamson County benefit from having a community foundation?
Our community foundation offers two primary benefits to Williamson County communities:
1. We help raise the level of local giving, and we help keep charitable dollars in the local community. It is our aim to build a local source of charitable capital that will become a steady, long-term resource for our communities.
2. We help to ensure that charitable endowment gifts given to help our community will remain effective and relevant over long periods of time. Even as local needs and giving opportunities change, a community foundation is able to adapt charitable funds to find relevance in a changing community.
What is an endowment?
An endowment is a type of fund that is set up to produce income for charitable purposes. The fund will distribute only the income generated from investments; its principal will never be distributed. A typical distribution rate from a foundation endowment fund is 4% or 5% per year.
What happens to a contribution to the Chisholm Trail Communities Foundation?
There are several possibilities, depending on a donor's wishes. The major possibilities include:
1. If a donor makes an unrestricted gift, the contribution will be added to and permanently recognized in The Chisholm Trail Fund. (Alternatively, some donors may wish to establish and name a separate unrestricted fund.) The income from the total fund will be distributed annually for charitable purposes as determined by the board of directors. Unrestricted contributions directly support our discretionary grantmaking program.
2. Other donors may want to support a general area of need in our county. Such field of interest gifts support specific types of organizations in our grants program. These contributions will never be used for projects outside their specified area. These funds include funds for animal welfare, arts & culture, children and youth, education, environment, family support, health and medical services, historic preservation and heritage, poverty and basic human needs, seniors and aging, and women’s issues.
Contributions of any size are always welcome to support these funds. Again, all specific grant-making decisions from area-of-interest funds are made by our board of directors.
3. A few donors ask us to restrict the use of their gift to one or more specific nonprofit organizations. These gifts create what are called designated funds. A community foundation will often be asked to handle such gifts because of its experience with managing endowments.
4. Many donors choose to establish donor-advised funds. In this case, the donor may periodically recommend to the foundation that a distribution be made to a specific nonprofit organization. Donor advised funds are especially suited to donors with a variety of charitable interests and an interest in getting and staying involved with philanthropy. They are an attractive alternative to establishing a private foundation, which is typically less efficient and more costly.
5. The community foundation also operates a scholarship program that allows donors to create new scholarships in memory of loved ones without the complexity and expense of having to establish and administer each scholarship separately. We accept donations of any size to support existing scholarship funds, including our general scholarship program, but we ask donors interested in establishing new scholarship funds to seek our assistance in designing these new funds.
The community foundation can also be used for a variety of other purposes, including short-term gifts, pass-through grants, and gifts that allow a donor to remain anonymous. All of these gifts can be made now, or be planned as a bequest.
How does a community foundation invest its funds?
If funds are designed for long-term use, we invest our funds in accordance with a prudent, long-term asset allocation strategy. We do not manage our investments from day to day; we have an investment subcommittee and finance committee to do that for us. Our responsibility is to balance our overall investment program in light of our long-term investment goals; to monitor performance regularly; and to review and change management as necessary to ensure that we meet or exceed our performance benchmarks.
What are the tax advantages of donating to a community foundation?
We offer the best tax advantages for charitable donations available under law. We are a publicly-supported non-profit organization, qualified under section 501(c)(3) of the internal revenue code. By avoiding classification as a private foundation, we are able to offer greater tax advantages than does a private foundation. See our comparison of private and community foundations for more details.
Who are the current board members?
Carole Burke
Karen Cole, Chair
Laura Hansen Dean
Howard Faske, Treasurer
Marsha Farney
Cammy Garey
Ron Greening
Janet Hewlett
Paul Jordan
Eugenia Koog
Chris Logue
Sherri Madden
Lynn Morris
Gary Newman, Past Chair
Mary Rodriguez
Bill Sattler
Dr. Jake Schrum
Ron Shelly
Dr. Michael Weir
How can an organization apply for a grant from the Chisholm Trail Communities Foundation?
We require all grant seekers to submit a formal grant application. We make our Grant Application & Guidelines available through our website, or by calling our office.
How does the community foundation select grant recipients?
Our Grants Committee is responsible for reviewing grant applications and recommending grant recipients to our full board of directors. Our full board of directors must give final approval to the committee's recommendations.
Many thanks to our friends at the Grays Harbor Community Foundation for their help on this FAQ!
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