The Power of Philanthropy: Making a Difference Through Charitable Giving
Jul 13, 2015 11:09AM ● Published by Lisa Lewis
Sometimes one person can change the world, and all it takes is an idea. Frederick Goff, a banker and lawyer in Cleveland, envisioned a new type of philanthropy in which citizens could create funds via a community-focused foundation that would invest the money. The income from those funds would then be granted to local nonprofit organizations in need. Goff’s innovative idea ultimately led to the formation of the Cleveland Foundation—the world’s first community foundation—on January 2, 1914.
His idea rapidly spread to other states, which created their own community foundations. Today, a little more than 100 years later, they are thriving. According to the Community Foundations National Standards Board, there are more than 750 community foundations in the United States and more than 1,800 around the world. And, naturally, Maryland was part of this growing philanthropic movement. The first community foundation, the Community Foundation of Howard County (formerly the Columbia Foundation), was created in 1969. Other community foundations were soon established all across the state.
“I am excited by the continuous growth of community foundations in Maryland,” says Adam Donaldson, director of the Maryland Community Foundations Association. “They play a vital role in helping charitable givers understand and address their local needs.”
Community Foundations at a GlanceCommunity foundations are nonprofit 501(c)(3) organizations that raise and grant money for charitable, tax-exempt purposes. They serve as vehicles for community philanthropy and offer individuals, families, businesses, and other organizations the opportunity to establish funds—under the community foundation’s “umbrella” of 501(c)(3) status—into which they can contribute assets that are used for charitable purposes. Donors can choose a cause that is meaningful to them, such as education, the environment, or healthcare, among others. Community foundations manage donors’ financial gifts and distribute investment proceeds through grants to enhance the quality of life in the community.
The mission of community foundations is simple: to assist donors in achieving their charitable giving goals. Community foundations also offer many benefits that facilitate the process for donors—eliminating the hassle of establishing their own private foundation. Setting up a 501(c)(3) nonprofit organization can be expensive and time-consuming. By using the community foundation’s “umbrella” of 501 (c)(3) status, donors can determine how the funds are distributed, but they don’t have to worry about “back office” support issues, such as tax and legal matters.
Donors can also benefit from the community foundation’s expertise. Since staff members are well connected in the community, they can offer resources and guidance. They also know where the greatest needs are and can connect donors to organizations that support particular causes. Another advantage is the ability to network with other donors who share similar interests, so they can pool their financial gifts, make significant investments, and work towards a common goal.
Community Foundations in Anne Arundel CountyFounded in 1998, the Community Foundation of Anne Arundel County (CFAAC) is the largest institutional grant maker in the county. With more than $6 million in assets under management, CFAAC, working directly with its donors and fund holders, made nearly $1.6 million in grants in 2014 to local nonprofit organizations that are making a measurable difference in the lives of Anne Arundel County residents.
“CFAAC staff works with donors to understand their charitable interests and goals and finds opportunities for them to invest, in the form of grants, in local nonprofits in an effective and meaningful way,” says Bess Langbein, former executive director of CFAAC. “Donors can make gifts to their fund when the timing is right and choose which charities to support.”
Types of funds include field-of-interest funds, which support a specific cause; donor-advised funds, which allow donors to recommend organizations to receive grants; legacy funds, which enable donors to leave a gift in their will; and scholarships, among others.
“It makes us feel great when we have a happy donor,” says Amy Francis, director of communications and donor engagement for CFAAC. “Customer service and donor satisfaction are vital for community foundations. When a donor feels confident in their community foundation, they’re more likely to give back—not just in their personal areas of interest but also to important community issues—because of the awareness the foundation creates.”
And Beverly Marcus, a retired psychotherapist and social worker from Edgewater, is definitely a “happy donor.” Marcus contacted CFAAC because she wanted to explore the needs in the community and see where she could make a difference. Since her background is in mental health, she decided to focus on ways to raise awareness and help destigmatize mental illness. After consulting with CFAAC staff, she chose to focus on Arundel Lodge, a 501(c)(3) nonprofit organization that treats behavioral health disorders.
“I chose the Community Foundation of Anne Arundel County because of their expertise and knowledge of the community,” says Marcus. “I’m very pleased to have my funds in a community foundation. I’ve had the opportunity to meet other donors and network, which is a great benefit. I’ll continue to contribute to Arundel Lodge and other causes because I want to make an impact in people’s lives.”
In 2002, then-Mayor Ellen O. Moyer founded the Annapolis Community Foundation (ACF) with a group of local civic and business leaders. Its goal has been to support Annapolis-focused organizations that are seeking to improve the lives of people living in the city. Over the past 13 years, ACF has awarded more than $125,000 in funds to more than 50 organizations.
ACF’s primary mission is to raise funds and give small grants to groups who need start-up funds for local projects. But in addition to its grant-making efforts, ACF has found that its 501(c)(3) status can help in another way, called fiscal sponsorship. By establishing dedicated funds and sponsoring special projects, ACF provides organizations with tax-deductible status, so they don’t have to establish their own 501(c)(3).
“This process is healthy for the Annapolis community,” says Jennifer Navabi, executive director of ACF. “A fiscal sponsorship allows ACF to provide financial oversight and management to help build the capacity of charitable projects. We’re reputable and well connected in the community, so we can direct project leaders to funding sources that support their cause. But our biggest reward is being part of the success of these groups. Their accomplishments become our success, too.”
For Ashley Zayas, one way of coping with the overwhelming grief of losing a loved one was to set up a dedicated fund with ACF. After the tragic, untimely death of Justin Fishell in an automobile accident in October 2011, Zayas, his cousin, established the Justin Fishell Memorial Fund in June 2012 to keep his memory alive. Fundraising events to support the fund have included blood drives and an annual crab feast.
“Justin left behind his wife, Ashley, and two children, Alanna and Nathan,” says Zayas, who is the director of the fund. “Every day is a constant reminder of our loss, so I set up the fund to help families in similar situations—to provide support for children who have lost a parent in a fatal motor vehicle accident. We’re trying to heal our hearts by giving back to the community. We want to make a difference and keep Justin’s spirit alive.”
Community Foundations on the Eastern ShoreEstablished in 1992, Mid-Shore Community Foundation is the fourth largest community foundation in Maryland. Located in Easton, the foundation “connects private resources with public needs” in order to enhance the quality of life throughout the Mid-Shore Region, including Caroline, Dorchester, Kent, Queen Anne’s, and Talbot counties, and in 2014, awarded more than $2.6 million in grants and related charitable expenses to 271 charities and 91 individuals.
In addition to helping donors achieve their charitable giving goals and supporting meaningful causes by establishing funds, Mid-Shore Community Foundation is also the largest provider of scholarships in the Mid-Shore Region. Each year, it awards nearly 100 scholarships to students, ranging from $500–$20,000. The foundation is also one of the largest grant makers in the region.
In December 2014, Mid-Shore Community Foundation celebrated yet another successful year during its Report to the Community/Annual Awards Luncheon. The foundation recognized individuals and nonprofit organizations for their contributions to the community and also awarded grants to area nonprofits.
“This annual event ratifies the work of the Mid-Shore Community Foundation and is evidence to the generosity and goodwill that exist throughout the community,” said Buck Duncan, president of the Mid-Shore Community Foundation, in a statement published in The Star Democrat.
Located in Salisbury, the Community Foundation of the Eastern Shore (CFES) serves the Lower Eastern Shore, specifically Somerset, Wicomico, and Worcester counties. Established in 1984, CFES is committed to connecting donors with community needs—encouraging philanthropy and strengthening communities—with the overriding goal of increasing annual grant making to $10 million by 2024. And it appears as if CFES is well on its way to achieving this goal. During fiscal year 2014, the foundation made 1,281 grants totaling more than $4.8 million to nonprofit and faith-based organizations to help improve the quality of life for residents in the region.
“The Community Foundation of the Eastern Shore provides an opportunity for individuals and families to invest in the causes they care about, making a difference today and creating a legacy for the future,” says Erica Joseph, president of CFES.
Establishing a fund with CFES allows donors to give back to the community in an informed and meaningful way. Some types of funds include field-of-interest funds; donor-advised funds; designated funds, which allow donors to select one or more nonprofit organizations to receive grants; community needs funds, which enable CFES to make grants to meet changing community needs over time; and scholarships.
In fact, CFES recently awarded a series of community needs grants totaling $87,491. The grants, which were distributed to 22 nonprofit organizations on the Lower Eastern Shore, help support the nonprofits and their growing needs—allowing CFES to make a profound impact in the community.
After 100 years, it’s inspiring to see that Goff’s mission of giving is still going strong—proving that people can make a difference. Indeed, the possibilities are endless.
ResourcesTo learn more about the origin of community foundations, visit the Cleveland Foundation at clevelandfoundation.org.
To learn more about the history of community foundations in Maryland, visit the Community Foundation of Howard County at cfhoco.org.
To get involved or start a fund, contact the following local community foundations:
Community Foundation of Anne Arundel County
Annapolis Community Foundation
Mid-Shore Community Foundation
Community Foundation of the Eastern Shore