By Sarah Hanley • Posted June 25, 2020

We are blessed to live in a world where so many people feel compelled to engage in charity. Giving, kindness and generosity connect us as a people and teach us that at our core, we are empathetic and called by God to love and care for one another.

If you’re someone who regularly gives to charity, you know that the possibilities of where to give are endless. This can be helpful for someone who is just looking to help in any way they can, but it can also alter the process of charitable giving into somewhat of a stressful venture. With so many worthy causes to choose from, it can be overwhelming to narrow down your options.

If this is something you tend to experience when deciding on when, where, and how to donate to charity, foundational giving might be right for you.

To determine if foundational giving could be helpful to you and your loved ones, we must first understand what a foundation is, the types of foundations that exist, and why.

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The Council on Foundations defines a foundation as “an entity that supports charitable activities by making grants to unrelated organizations or institutions or to individuals for scientific, educational, cultural, religious, or other charitable purposes.”

That sounds like the definition of a typical nonprofit, but foundations differ in that they actually create and distribute grants to other entities; they don’t just take in donations for operations. Foundations create options and opportunities for your philanthropy that creates a significant impact on the organizations that receive your donations. It’s a great way to share your gifts with many worthy causes at one time, or concentrate your giving on a specific organization or cause, but with the help of a professional grantmaker to steward them efficiently.

Now that we better understand the functionalities of foundations, we can explore the types of foundations that are at our disposal.

Private foundations are 501 (c)(3) nonprofit organizations that are created by an individual, family or corporation to support the specific causes they value. For this discussion, we’ll focus on individuals and families. Many people will start a private foundation, or family foundation, to carry out their own charitable purposes. Private foundations are tax-exempt and have an official nonprofit designation from the IRS.

Public charities are 501 (c)(3) nonprofit organizations whose primary goal is to support other organizations through grants. Public charities include a variety of entities, including community foundations, schools, parishes and more. Public charities are also tax-exempt and have an official nonprofit designation from the IRS.

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As mentioned, community foundations are a type of public charity whose goal is to positively impact their community through grants. But their benefits range beyond just their impact – these foundations are the most donor-friendly of the bunch. Why? Because it saves you the time and energy of creating a private foundation and instead allows you to jump right into philanthropic giving. Community foundations provide you with a team of experts that work with you to identify the causes most important to you. They will listen to your charitable goals and instruct you on the best way to achieve them.

Perhaps the biggest game-changer that these foundations offer are their investment vehicles. There are enough to meet your needs, but not so many that lead to confusion. Typically, community foundations will house different types of funds within them, such as endowment funds, donor-advised funds, program funds for specific organizations, or field of interest funds for specific community causes. Donors are free to create their own fund or give to an existing fund.

What makes these fund opportunities so wonderful is that they benefit both the community and you all at once. Your charitable giving is simplified, yet you’re making a bigger impact than you would on your own. And of course, all gifts made to funds are tax deductible to the fullest extent of the law. Rather than taking the time to start your own foundation, you can open a fund, and start your philanthropy immediately, knowing your fund’s contents will be professionally managed.

If you are not interested in starting your own fund, but you find yourself overwhelmed with giving options, you can contribute to an existing fund that aligns with your interests. Community foundations take the difficulty out of charitable giving and provide you with tools, resources, and people to help you with your philanthropy.

The Catholic Foundation of Greater Philadelphia (CFGP) is a community foundation that offers many opportunities to donors looking to secure a future for the Catholic causes they care about. But no matter where you choose to focus your philanthropy, one thing is certain – giving to foundations should be on every donor’s radar. Their full-service capabilities and ease of use make philanthropy enjoyable and fulfilling.

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Sarah Hanley is the president and CEO of the Catholic Foundation of Greater Philadelphia. To learn more about charitable giving, visit www.TheCFGP.org/community/funds, or call 215-587-5650.