When to choose a faith-based community foundation

If you’re a donor-advised fund holder, how did you choose the community foundation in which you invested? For most fund holders, a recommendation from a friend or a trusted financial advisor is all it takes to make a decision. After all, the organization is a conduit for your giving. Why should it matter which community foundation you choose?

If your ultimate goal is to find an organization that will help you manage your giving, then it doesn’t much matter. One community foundation’s fees may be nominally larger, whereas others might offer a more robust online giving platform. These differences are negligible to the average fund holder. But if you have expanded giving aspirations – like supporting organizations that align with your faith – then choosing a faith-based foundation may be the right choice for you.

When selecting your community foundation partner, we recommend asking the following questions to determine if a faith-based foundation is a good fit for you.

How do you approach your giving?

Giving is incredibly personal, and the motivations behind giving are unique to each individual. Community foundations can be great encouragers, spurring their donors to consider how they might improve the lives of their neighbors through philanthropic investments. If your faith drives how you approach giving, then a faith-based foundation might be a great fit for you. Your contacts at the organization will help you talk through your giving goals in a way that aligns with your faith and your vision, making the process clearer for you and your family. They can also provide faith-based encouragement, potentially helping you reimagine how and why you give.

Who are you giving to?

Community foundations can set parameters on which organizations you can and cannot donate to from your donor-advised fund. Most foundations keep these limitations to a minimum. But you want to make sure that the foundation you choose will help align your generosity with your Christian beliefs. If your preference is to donate to ministries or faith-based nonprofit organizations, choosing to invest in a faith-based foundation is a great option.

How do you want your foundation to operate?

Foundations fund their operations by collecting a percentage of gains on donor-advised fund accounts. Sometimes, these financially savvy organizations operate in such a way that they have surplus funds available throughout the year. These funds allow community foundations to invest in organizations as they choose. When you partner with a faith-based community foundation, there is an increased likelihood that any surplus funds will go to organizations that align with your religious convictions. At the Christian Community Foundation, our surplus funds go into the Hope For Memphis Grant Fund, which supports Christian nonprofits helping underserved areas of Memphis. Our donors know that any surplus funds we have after covering our operating expenses go to these organizations who also spread the Gospel.