Our colleagues in northern New Jersey at CFNJ published a great discussion on their blog outlining some of the advantages of giving via a community foundation instead of creating a private foundation.
Why, they ask, did Facebook founder Mark Zuckerberg choose to make his gift of $500 million in company stock to the Silicon Valley Community Foundation — rather than, say, opening the Zuckerberg Foundation like many tech titans before him?
… One of the questions we hear most often is, “What is a community foundation?” And truth be told, it’s not such an easy question to answer because we do many things (grants, programs, capacity building, advocacy, and more) for many people (donors, professional advisors, nonprofits, the general public).
A useful analogy, though, is that when most people think of “Foundations” they envision the philanthropies established by a single wealthy individual — Ford, Carnegie, Mellon, Gates, Buffett. A Community Foundation is, by contrast, a public charity that was created through the collective generosity of a region’s residents.
As CFNJ points out, community foundations have several key benefits over private foundations from tax and operational standpoints, and as a result they are becoming increasingly popular vehicles for philanthropy — even on the extraordinary scale of Zuckerberg’s gift.
A community foundation fund can be “A flexible, efficient and highly effective tool for accomplishing a donor’s long-term charitable goals.”