Community Foundations

“If you want to go quickly, go alone. If you want to go far, go together.” – African Proverb

We have written about how donors can optimize charitable giving several times (here and here). One can choose to give an outright gift to a not-for-profit, but there are times the donor wants some level of control over the donation. In these situations, we often suggest donor advised funds (“DAFs”) due to their wide range of tax benefits and donor influence over the timing and direction of the ultimate disposition of the funds. Besides DAFs there are many different gift designs including charitable trusts, scholarship funds, private foundations, charitable gift annuities, etc.

As part of designing one’s philanthropic portfolio, an important decision needs to be made regarding which type of organization will hold and manage the assets before they are delivered to their final destination. One option, which we liken to a robo-advisor for investors, is to utilize a large financial institution’s charitable arm such as Schwab, Fidelity, Vanguard, etc. This can make sense for donors who want the lowest fees available in exchange for little support in identifying potential recipients of the funds and other operational matters. Another option, which is more akin to having a full-service financial advisor is utilizing a community foundation. According to the National Council on Foundations, over 900 community foundations exist around the country. A community foundation is just what it sounds like. It is an organization that has roots in local communities, that understands the needs of the community, and employs people in the community. Community foundations can and often are instruments of change in communities to reinvigorate the community, re-establish identity, and solidify local values. Community foundations aggregate their community’s charitable wealth and disburse it according to either the donors’ specifications or the greatest need of the locale.

Some donors choose the lower fees of the large financial institutions’ DAFs rather than a community foundation. This is wholly rational if the DAF is a conduit for a well-organized charitable plan. If the donor does not have specific targets or needs philanthropic support, we suggest they consider a community foundation to house their assets. As our CEO, Thomas J. Scalici often reminds us, “Cost is what you pay, and value is what you get.” In many ways community foundations provide value that far outweighs their cost. Cornerstone believes that community foundations are an important part of the fabric of our country, and our employee sponsored giving fund, Cornerstone Cares, is housed in one.

As some of you may know, our founder and President Emeritus, Skip Cowen, recently lost both of his parents. Skip has been a mentor to many of us and a leader in the community, traits he learned from his parents. To honor their memory, today, the employee-owners of our firm, through Cornerstone Cares, are proud to announce the establishment of the Mac and Kay Cowen Scholarship Fund through the Luzerne Foundation. This scholarship will help Pittston (PA) Area High School students furthering their education in medicine offset the cost of higher education. Skip’s mom, Kay, was a graduate of Pittston, and his father, Mac, was an accomplished doctor. More importantly, both served the community throughout their lives, with Mac being a decorated Navy doctor. For these funds to get to the most deserving students annually in perpetuity, we require a partner organization that understands the community and can effectively administer the gift. This is where community foundation thrive – they are built to turn our dollars into impact both today and tomorrow. We entrust our dollars to the Luzerne Foundation to find the most deserving students to continue the work that Mac and Kay started so many years ago.