Newsletters

 

Subscribe to our mailing list

* indicates required
Community Capital
Email Format

View Archives

Community Endowment

What is a community endowment?

A community endowment is a special tax-exempt fund established to benefit a specific geographic area. Funds in a community endowment are a little like a collective savings account where the earned interest is distributed within the community for charitable purposes, while the remainder of the earnings become part of the endowment principal. One of the advantages of a community endowment is that it provides a permanent and flexible source of capital for important community initiatives. 

Those who do their charitable giving through a community endowment can make contributions for the general benefit of the community, or designate their funds for special purposes, such as scholarships. Endowments can accept donations of cash, land, stocks, bonds, and other appreciated assets. Community endowments are regulated by the IRS and donors are provided with maximum allowable tax advantages which makes contributions to new or existing endowments a smooth process (no legal or accounting hurdles).

Unlike the rigid and unpredictable funding from government or private foundations controlled by forces outside the community, the endowment fund is governed by a local community-based board. This local advisory board makes decisions on how to use the endowment funds to benefit the area and its people. As residents in the community, advisory board members are knowledgeable both about the community’s needs and the local organizations working to address those needs. The endowment is a permanent resource to help communities shape their future, not only by providing a solid base of capital, but also by engaging community members and encouraging new leaders to participate in decision-making.

NEOEDD staff researched community endowments and the benefits of capturing a portion of the transfer of wealth between generations as a mechanism to support the communities of Baker, Union and Wallowa Counties. We determined that creating a fund at the Oregon Community Foundation was the best mechanism for supporting local giving. The Oregon Community Foundation is a tax-exempt private philanthropic organization that manages a wide range of permanent endowment funds. Their cost of management is low and their investments are well-managed.

In Wallowa County we helped create the Wallowa Fund (wallowafund.org) as a field-of-interest fund of the Oregon Community Foundation by facilitating focus group sessions to identify the initial priorities of the fund, recruiting and training the volunteer advisory board, informing the public of the opportunity to give to the Wallowa Fund and asking for donations.

We have shared our experiences at the 2011 Regards to Rural conference and the 2012 Eastern Oregon Nonprofit Conference. We are willing to speak at other conferences regarding the process to establish a community endowment or work with local communities to set up an endowment.

For more information on Starting and Growing Rural Community Endowments, download the guide from the Aspen Institute. http://www.givingforum.org/s_forum/bin.asp?CID=4943&DID=10784&DOC=FILE.PDF