Community foundations are 501(c)(3) nonprofit public charities with the goal of improving the quality of life in a specific area or region, primarily through endowment building and coordinated grant-making services. Community foundations enrich an area by connecting generosity with need, offering individuals, families and businesses a variety of easy and cost-effective ways to impact their community through charitable giving. Community foundations are governed by a local volunteer board of trustees and run by professionals with expertise in assessing the community’s need, working with donors and managing assets.

In addition to fundraising, money management and grant-making, community foundations act as catalysts for community improvement by collaborating with a wide variety of partners. They serve as conveners of individuals, institutions and resources to solve community problems; engaging researchers to study community issues and community builders to unite, strengthen and promote their respective communities.

The Community Foundation of Howard County, originally established in 1969 by James Rouse as the Columbia Foundation, provided support for the rapidly growing nonprofit community in the new town of Columbia. It was the first community foundation in the state of Maryland and today is one of approximately 700 community foundations nationwide.

CFHoCo is committed to building a vibrant, compassionate and engaged Howard County community by encouraging philanthropy and assisting donors in building an enduring source of charitable assets by allowing people to establish permanent endowment funds under the umbrella of one large foundation. The distributions generated by the investment of these funds is used to make grants to qualified nonprofit organizations whose programs serve the needs and enhance the quality of life for present and future residents of Howard County.  The Foundation currently administers more than 300 charitable funds that reflect the philanthropic interests of their donors and vary from unrestricted grants to those for very specific areas such as scholarships or the arts.

CFHoCo also assists donors in defining their philanthropic interests and provides strategic thinking around the most effective ways their grants can realize the greatest impact. Private foundations and government or community organizations can contract with CFHoCo to provide administrative, financial and grant-making services for their family foundations or trusts.

Currently, our competitive community grant-making is defined around a variety of program areas, including health and human services, arts and culture, education and civic programs. From time to time, grants are targeted to specific community initiatives based upon emerging community needs identified by the Foundation. The funding priorities of donor-advised funds reflect those of the many generous and community-spirited individuals, families and companies that have established funds with the Community Foundation of Howard County.

In our 45 years of serving as Howard County’s community foundation, we have distributed nearly $14 million in grants, supported hundreds of nonprofits; managed over 300 varied funds that provide donors with the flexibility needed to meet individual philanthropic goals; helped exciting new initiatives such as the North Laurel Community Center take root in the community by providing seed funding; convened nonprofit agency leaders, funders, policy makers, young people and concerned citizens for in-depth discussions on key community issues and trends; hosted donor and professional advisor education; participated in a number of diverse working groups and task forces throughout the community and provided capacity-building support to nonprofits in order to improve efficiency in operations.

Most public charities provide direct and specific services to the community (e.g., emergency food and shelter, early childhood development). CFHoCo, while also a public charity, is primarily a grant maker and not a direct service provider. Rather than focus on servicing a particular community need, CFHoCo serves donors and the broad needs of the community. A key difference between a community foundation and other types of charities is that, unlike other philanthropic organizations, we do not ask you to support our cause; instead, we ask what causes you would like to support, and we help you do that through the Foundation.

There are many great ways to support nonprofits. By establishing a fund at the Community Foundation of Howard County, you can create an endowed fund, which is a permanent charitable giving account that will grow and produce income over time and enable you to give grants in perpetuity. It also is a great way to organize your giving.  Through the Community Foundation, you  have the flexibility to address a variety of charitable priorities, whether you support many different causes or your interests change over time. You can set up a fund within your lifetime or create a lasting legacy by creating a bequest to CFHoCo in your will.  A permanent fund in the Community Foundation is a safeguard designed to carry out your charitable objectives in perpetuity – dedicated to making sure the spirit of your gift remains intact through changing time and circumstance. Donors may feel more comfortable making those gifts through the Community Foundation of Howard County because of our permanence, professional investment management and oversight role in making sure their wishes are met by the recipient organizations.

Both organizations are important resources to Howard County. Some have described the differences by suggesting the United Way is more like the community’s checkbook, raising and distributing money annually, while the Foundation is more like a charitable savings account, distributing grants from a long-term fund in perpetuity. The United Way focuses on health and human services, while the Foundation’s scope of funding is much broader and includes working in areas such as economic development, education, the environment, community betterment, the arts and culture, as well as health and human services.

Community foundations focus on attracting and managing permanent endowments. Most chapters of the United Way do not attempt to manage long-term funds or permanent endowments.

A private foundation is usually endowed by a single family or corporation and controlled by that family or corporation. In contrast, a community foundation derives its support from a broad spectrum of the general public and is controlled by a board of community leaders. Because it is publicly supported and controlled, the community foundation is accorded certain advantages over private foundations by the IRS.

Our alternative to a private foundation for an individual, family or corporation is called a Donor-Advised Fund. It: 

Is easier and less expensive to establish and maintain

Provides a greater annual tax deduction, in many cases

Provides easy access to information about nonprofits seeking support

Enables you to make gifts of stock options, closely held securities, insurance policies, real estate and other complex assets with ease and without most IRS limitations

Lowers the administrative cost thereby increasing grant-making capacity

Permits you to time gifts without an IRS-mandated payout schedule

Allows the avoidance of the 1-2% excise tax on investment income

Creates the opportunity to make gifts anonymously

Enables you to establish a legacy of caring in perpetuity – which will be overseen by committed leaders dedicated to preserving donor intent

Some of the major financial institutions have created separate nonprofit foundations and are now offering donor-advised funds. While they offer the same tax deductibility as a fund at CFHoCo, donor-advised funds housed at the Foundation are relationship- and service-based. In contrast, commercial donor-advised funds are transaction-based. With our expertise, we make donors aware of local needs and local opportunities, enabling us to create giving strategies that reflect the donors’ interests.

Further, we can accept the full range of gift opportunities, while commercial funds tend to be limited to cash and publicly-traded securities.

Donors to the Community Foundation of Howard County become part of a “community of donors” recognized in our annual report. Commercial funds are not community-based. Fees charged by the Foundation are recycled back into the community to encourage more philanthropy. Fees charged by commercial funds are plowed back into those financial institutions.

All funds are used exclusively for charitable purposes to provide grants to nonprofits or scholarships for students. Most funds are permanent endowments that grow over time and provide a distribution to be used for grants and scholarships each year. Funds share modest administrative expenses on a pro rata basis. Assets are invested in our master portfolio unless a donor specifies otherwise.

Effective and meaningful giving does not require great wealth—just thoughtfulness and planning. We offer a variety of options for making donations. By combining your resources with those of others that share your interests, you can maximize the impact of a modest contribution. Gifts of any size make a difference and are always appreciated. By establishing a fund or donating to an existing fund within the community foundation, donors can contribute their gifts of cash or appreciated property toward a permanent named endowment or an advised gift fund. Many donors are interested in planned giving and name the community foundation as the beneficiary of their IRAs, charitable remainder trusts, charitable lead trusts or bequests.

Most community foundations maintain both endowment and non-endowment funds. One very popular type of fund is the donor-advised fund, in which the donor or another designated person has the right to make recommendations to the community foundation regarding grants from the fund. These recommendations are not binding on the community foundation (if they were, the fund would be subject to a material restriction and the gift would not be tax-deductible), but allow the donor to maintain involvement with the fund after his or her gift. Other common fund types include funds that are designated for particular beneficiary organizations or particular charitable purposes and so-called “agency funds,” which are established when a charitable organization hands over its own assets to the community foundation, to be administered for the benefit of the organization.

Generally, a gift of $10,000 is required to establish an active fund. There are higher minimums for certain types of funds such as scholarships. Funds can be established with a smaller gift and a pledge to reach the minimum requirement within five years.  No grants or scholarships will be distributed from the fund until the minimum requirement is met.

Outright gifts of cash, real estate, securities and/or personal property can be donated. You may also make a bequest by will or trust or contribute life insurance or retirement plan assets.

Yes, if you choose to establish a donor-advised fund, you may name co-advisors and successor advisors to continue to guide the fund both while you are involved and far into the future.

Once your fund has reached the minimum balance required to make a distribution, simply contact the program officer at the Foundation and he/she will help you make grants from the fund, answer questions about the fund itself and will work with you to help you achieve your philanthropic goals.

Beginning in the fall of 2014, you also may access your fund information online. Donor Central is a free online service that will allow you to submit grant recommendations, check your balance or review gifts and grants.

YES. While we hope most of the grants the Community Foundation makes will go to support community endeavors, we recognize that some of what has made our area so healthy has come from outside its borders. We have several donors, in fact, who have established funds within the Community Foundation of Howard County, but who live elsewhere. And, we have donor advisors who request that gifts from their funds go to benefit favorite organizations across the country. The Foundation’s Board maintains that national organizations, colleges and universities and nonprofits doing good work in other areas have all made this a better place to live. And, we ourselves have gratefully accepted grants recommended by donors from donor-advised funds in other places.

Yes. The Foundation honors requests for privacy. If a donor wishes to remain anonymous, the Foundation must be notified at the time the gift is made. A request for anonymity means, among other things, that the donor’s name will not be published in any public document such as the newsletter or biennial report.

Once decisions are made about the type of fund you want and the asset you wish to donate, the necessary paperwork can be prepared in a matter of minutes.

Yes. The Community Foundation’s philanthropic service team is highly knowledgeable about a wide variety of nonprofit organizations and will be glad to work with you to identify grant recipients in your area of interest.

The Legacy Society recognizes donors who have made a planned gift or commitment in the form of bequests, trusts, life insurance, charitable gift annuities, split interest gifts or through other provisions in their estate plans for a future gift to the Community Foundation.