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your questions about the Community Foundation of
Southern Maryland. We'll answer them and add them to our FAQs.
Frequently Asked Questions
What is a
- Community Foundations are charitable trusts that
support local community causes. Our role is to manage donor funds and
build endowments as well as make grants to charities and community
groups, linking local donors with local needs.
- Created by and for the people of Charles County they
help donors express their long-term interest in an area and its needs.
The first Community Foundation was created in 1914 by a banker in
Cleveland. Since then Community Foundations have been rapidly growing
all over the world.
Community Foundations different?
- Community Foundations identify local needs and
mobilize local resources
- Community Foundations can meet all areas of community
needs – arts and culture, education, environment, health, community
development, youth and elderly.
- Community Foundations support cutting edge programs,
can help create new organizations and meet new and emerging needs.
- Community Foundations help build healthy communities
- Develop permanent charitable funds
- Connect donors to programs they care about
- Provide community leadership
What is the
difference between the Community Foundation and the United Way?
- Both are important resources to the community and
each complements the other.
- Some have described the differences by suggesting the
United Way is more like the community's check book, raising and
distributing money annually, while a community foundation is more like
a savings account, distributing interest from long-term funds in
how a community foundation's funds are distributed?
- The professional staff and the Grants Committee
review all grant applications. The Grants Committee is a group of
highly respected community leaders who are knowledgeable about the
charitable needs of the community. Individuals who have Donor Advised
Funds can participate in the grant making process by suggesting grants
from their named fund.
Why should folks
establish a fund with the foundation instead of giving directly to a
- Donors, who want to ensure that their gifts will do
the most good in the community and support organizations over the long
term, find that community foundations offer them the expertise,
flexibility and financial resources to give more to the community while
gaining the maximum tax advantages for each contribution. Some donors
also prefer to be shielded from fundraisers by giving through the
auspices of a community foundation.
Can folks give
to organizations outside of the community where the community
foundation is located?
- Yes. Community foundations can channel donor
distributions anywhere in the country, and even in some cases outside
the U.S., as long as recipients are nonprofit organizations qualified
Who handles the
investments of community foundations?
- The Community Foundation of Southern Maryland has
employed a local investment firm to handle their investments. A
volunteer Investment Committee made up of business leaders will monitor
the investment returns carefully and work with the investment advisors
to ensure the continued growth of each permanent fund in the community
foundation. The community foundation’s board of directors will provide
final fiscal oversight.
Are there tax
advantages of a community foundation over a private or family
- Community foundations are public charities under tax
laws. This offers some advantages to donors over private foundations.
For example, gifts of cash and ordinary property to a community
foundation are deductible up to 50% of adjusted gross income (AGI).
Gifts to private or family foundations are deductible only to 30% of
AGI. Similarly, gifts of appreciated property to community foundations
can be credited for 30% compared with 20% for a private foundation.
There are no excise taxes on community foundations as there are on
private foundations and community foundations do not have a requirement
that a certain percentage must be distributed each year.
Is it ethical
for advisors and attorneys to refer their clients to community
- Sometimes attorneys and advisors question whether it
is ethical for them to refer clients to community foundations. By doing
so, aren’t you advocating a particular charitable cause? You are not,
because of the fundamental difference between community foundations and
- The Community Foundation of Southern Maryland is
organized to help people give effectively to improve the quality of
life. They work with your clients to help them give to charities and
meet their tax planning goals, and do not dictate the type of gifts
their donors can make. By making a referral to a community foundation,
you’re not advocating a particular cause.