What is the Community Foundation of Orange and Sullivan?
The Community Foundation of Orange and Sullivan 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 individuals and families in the region. Funds are established through contributions from individuals, families, businesses or 501(c)3 organizations, each one with its own specific purpose. The Foundation’s Board of Directors oversees these funds in perpetuity, to ensure that donor’s intentions are honored, now and forever.
The Community Foundation of Orange and Sullivan received accreditation with the nation’s highest standard for philanthropic excellence in 2014. National Standards for U.S. Community Foundations™ establish legal, ethical, effective practices for community foundations. The rigorous accreditation process provides quality assurance to donors and to their legal and financial advisors.
Foundation FAQ’s
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 it work?
A Community Foundation receives contributions from a wide range of local individuals, families, and businesses. Most establish separate, named funds for specific purposes: to support local education or health, to fund a scholarship for local students, or to endow a local non-profit institution. A community foundation saves individual donors time and money by handling the administrative details of many funds jointly:
Through the community foundation’s finance committee it makes investment decisions for all funds
Through its staff it handles all tax filings, bookkeeping, and grants processing
Because of this and other built-in “safeguards” of the community foundation model, the IRS permits each fund established in a community foundation to qualify as a “component fund” of it. In effect, that means that each fund qualifies as a publicly-supported, non-profit 501(c)3 organization unto itself. It becomes, as it were, a “foundation within a foundation.” In turn, the advantage of public-charity status gives donors maximum tax benefits for all their donations.
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. Today, of course, the world’s largest foundations -Gates, Ford, Kellogg- are all still private foundations. To prevent abuse and self-dealing, private foundations have been subjected by the IRS to numerous penalty taxes and legal requirements, since the 1970s. Because Community Foundations are controlled by large, diverse, and unrelated boards of directors, and the possibility of abuse is slim, the IRS does not impose any tax penalties or burdensome legal requirements on Community Foundations.
How do Community Foundations differ from other nonprofits?
Most non-profit 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 allows us to serve a wider group of potential donors on the one hand and, on the other, a wider group of non-profit organizations whom we consider our partners in improving local communities.
Area non-profits benefit from having a local Community Foundation because the Community Foundation helps money stay in a community. Community Foundations benefit local non-profits in other ways, too: besides having local grant money available, some non-profits ask the Community Foundation to manage an endowment on their own behalf. We call such funds “agency 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 kind of gifts do people typically make?
While cash or checks are simplest, many donors find that securities, real estate, or even life insurance policies maximize tax benefits by avoiding capital gains taxes on highly appreciated property. Direct bequests via will or beneficiary designations for tax-deferred retirement plans have become frequently used planned giving tools. The Foundation staff can provide more details on attractive estate planning, insurance and property gift options.
Can I recommend a grant to an individual?
No. According to IRS regulations, the Community Foundation may make grants only to qualifying nonprofit public charities. The Community Foundation staff checks all organizations for documentation of nonprofit status.
Scholarship awards are made payable to the institution the recipient is attending on his/her behalf.
What does the Community Foundation do to make Orange and Sullivan Counties better places to live?
The Foundation’s work involves managing, investing, and making effective charitable grants from the assets of 170+ different charitable funds to date; including unrestricted endowments, designated funds, donor advised funds, fiscal sponsorships, field of interest funds and scholarship funds. Each fund receives its share of the Foundation’s investment return as part of maximizing its grant-making potential.
Is the Community Foundation a trustworthy organization?
We have been in existence since 1999. We are governed by a distinguished, all volunteer, Board of Directors. We are a 501 (c) (3) nonprofit organization. We are a very transparent organization and would be happy to provide you with current financial information. Our financial information is also publicly available under the About section of our website.
How will my contribution be used by the Foundation?
You can honor or commemorate a special person with a named permanent endowment fund, or with a memorial contribution in the honoree’s name for any amount to the Foundation for general operating support, or to add to an existing permanent endowment fund. The Foundation takes care of all appropriate gift acknowledgements.
How will I know who gave a memorial gift?
When we receive a donation here at the Foundation, we will send a tax receipt to the donor and we will send you a letter saying who gave in your loved one’s memory. We will include the donor’s address so you may thank them in your own way as well.
What is an Endowment Fund?
Creating a permanent endowment fund ensures that the special people who have “left footprints on our hearts” are forever remembered in our community. It takes just $25,000 to establish a permanent endowment fund from which grants will be awarded forever in a loved one’s name, and the Foundation charges a very modest annual fee of approximately 1% annually to administer your endowment fund. You have up to five years to achieve the $25,000 minimum to endow your fund.
Can you give an example of how Endowment Funds work?
The Oscar B. Greenleaf Scholarship Fund is a great example. Mr. Greenleaf left a bequest of $1 million to establish a scholarship fund. The Foundation grants out approximately 4% annually in scholarships. That equates to approximately $40,000 in scholarships going out of the fund to local students each year. What a legacy Mr. Greenleaf left to his community. Forever and ever, this fund will continue to award scholarships, and the annual scholarships will grow as the $1 million bequest grows through its investment. As you can see, when you establish or support an endowment, your gift just keeps giving…and getting bigger!
A quarter century of growth and philanthropy is highlighted with assets reaching $60 million and $32 million in grants distributed MONTGOMERY, NY (November 26, 2024) – Over 300 esteemed guests […]
Grantmaking program developed by CFOS leadership to support diversity and inclusion programs of area nonprofits MONTGOMERY, NY (November 4, 2024) – The Community Foundation of Orange and Sullivan (CFOS) is […]
CFOS distributes $603,575 in scholarships to local students MONTGOMERY, NY (August 20, 2024) – The Community Foundation of Orange and Sullivan (CFOS) recently hosted two scholarship receptions at the CVI […]