Frequently Asked Questions
What is a Community Foundation?
A Community Foundation is a creative, cost-effective and tax-efficient way for people to invest in the charitable causes they care about the most. We create permanent charitable funds of everlasting impact. These funds ensure that people of vision will have an enduring influence on the life of their community and the charitable causes they hold dear. The Community Foundation of East Mississippi is a philanthropic vehicle that is used to improve the lives of the citizens of the community.
By setting up a fund with The Community Foundation of East Mississippi you receive the flexibility and involvement of your own private foundation with the tax advantages and simplicity of a community foundation. Find out more about how we can help you live your legacy.
What does a Community Foundation do?
Community foundations make up one of the fastest growing sectors of philanthropy in the United States today. We use local knowledge, professional investment and grantmaking expertise to be a catalyst for improvement.
The Community Foundation of East Mississippi has over 60 funds established to help fuel and support the many causes and organizations within the region.
Where does a Community Foundation get the money it distributes?
Donors to the Community Foundation of East Mississippi range from people of relatively modest means to those with large financial resources. 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 in their IRAs, charitable remainder trusts, charitable lead trusts, or bequests.
What is an endowment?
An endowment is a type of fund that is set up to produce income for charitable purposes. A typical endowment fund will provide interest and dividend earning for the benefit of philanthropic causes. Its principal will never be distributed.
An endowment fund is likely (though not, of course, certain) to remain permanent as long as principal is never invaded, and as long as the distribution rate reflects the long-term growth patterns of investments
Why do people become donors to the Community Foundation of East Mississippi?
Donors feel more comfortable making gifts through the East Mississippi Community Foundation because of our permanence, professional investment management, and oversight role in making sure their wishes are met by the recipient organizations. The Community Foundation gives donors the opportunity to become a philanthropist at any level. We help donors find the joy in giving and contributing to the community they love. This creates invaluable gifts of knowledge, independence, well-being and culture to such a deserving part of the great state of Mississippi.
Who governs the Community Foundation?
The Community Foundation of East Mississippi is governed by a Board of Directors and Staff members who work to meet the needs of the community through charitable giving from donors.
What are the financial benefits and tax advantages of gifting through the Community Foundation?
The Community Foundation's approach offers a number of important financial benefits to donors. The Community Foundation manages a large number of unrestricted and discretionary funds; and therefore, administrative costs and service fees for any one fund are minimized - meaningless overhead cost to a donor's fund. Another important advantage is that the Federal tax code provides significant incentives for contributions to a community foundation. We are a publicly-supported non-profit organization, qualified under section 501(c) (3) of the internal revenue code. By avoiding classification as a private foundation, we are able to offer greater tax advantages than does a private foundation.
The Community Foundation has a number of different types of funds to accommodate donors who prefer the long-term strategy of endowments, as well as those who want to give more actively each year. Donors can choose to establish one of these funds, which allow donors to recommend grants, or can choose to contribute to an existing fund that is flexible in response to emerging needs in the community.
How can people give to the Community Foundation?
Individuals may choose to give now to support local charities during their lifetime and in perpetuity. This can be done with gifts of cash, stocks, real estate, or other assets.
Those who choose a deferred gift can take advantage of key elements in estate planning. These planned gifts allow for tax advantages now for the commitment of a charitable gift later.
Donors may also include provisions in their wills for unrestricted contributions or for contributions to an established or new fund at the Community Foundation. A contribution may save estate taxes as well as ensure the donor’s charitable interests will be supported. Donors may claim a tax deduction of up to 50% of adjusted gross income in any one year when deductions are itemized, with any excess carried forward for an additional five years.
What is the difference between a private family foundation and a fund with the Community Foundation?
The 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 its donors is a desire to improve local communities. The IRS classifies all community foundations as publicly-supported charities which allows for tax advantages not enjoyed by private foundations.
Additionally, donors may leave their funds dormant when they lack the time to focus on it in any given year which differs from family foundations which require annual payouts.
Gifts of cash and ordinary income property to a community foundation are deductible up to 50% of adjusted gross income versus 30% for a private foundation. Gifts of appreciated property can be credited for 30% versus 20% for a private foundation. There is no excise tax on community foundations as there is on private foundations.
How do I contact the Community Foundation of East Mississippi?
Mailing Address:
Community Foundation of East Mississippi
P.O. Box 865
Meridian, MS 39302-0865
Telephone: (601) 696-3035
Fax: (601) 696-3037
E-mail: office@cfem.org
