FAQ

Frequently Asked Questions about Sydney Community Foundation

What is a community foundation?

A community foundation is an independent public structure comprising a collection of donations and endowed funds established by individuals, families, companies and charitable organisations to make a lasting difference to the life of the people in their community.
The foundation acts as trustee for donations, consisting of a Board of Directors made up of community leaders representing a cross section of society. Funds donated are pooled and carefully invested under the supervision of this Board. The income generated each year from this permanent and growing investment is distributed in the form of grants. By providing leadership on issues of broad community concern and developing a body of local knowledge, a community foundation is in a position to help donors fulfil their charitable goals both during and after their lifetime.

What does a community foundation allow a donor to do?

It allows donors to set up their own sub-fund within the structure of the public foundation and to have the annual income from their sub-fund distributed in the form of grants to areas of need within the community. As these needs change over time, a sub-fund’s annual distribution can be re-directed to emerging and new areas of need. By making their gift through a community foundation, donors can use its grant-making capabilities in an efficient manner. This allows donors to create a lasting legacy for the benefit of the community they live in.

For example, the Vancouver Community Foundation, which has its roots in the early 1940s, now manages around Cdn$610 million with around Cdn$40million available for grants each year to support specific projects in the Vancouver region.

How does a community foundation work?

Funds donated by such individuals, families, groups and corporations are pooled and carefully invested. Investment management services are usually outsourced to a professional fund manager under the supervision of a trustee. The income earned each year from this permanent and growing investment is distributed in the form of grants to support specific community projects. Through a community foundation’s active role in the community and its grant making capabilities, donors can access years of experience and thereby maximise the effectiveness of their giving.

How long have community foundations been around?

The community foundation movement originated some 100 years ago in the USA. There are now well established foundations with substantial endowment funds in many large communities and regional communities in the USA, Canada and the UK . Closer to home, there are community foundations in Melbourne, Brisbane, Perth, and a variety of regional areas.

Why establish Sydney Community Foundation when there are a lot of other charitable organisations already in existence?

In Australia there are community foundations established in Melbourne, Brisbane and Perth as well as in many regional centres. Yet there is no foundation especially serving the needs of the people in the greater Sydney area. Sydney Community Foundation will be a catalyst and resource for philanthropy throughout greater Sydney . It allows everyone (not just wealthy individuals) to contribute and make a lasting difference to their community.

The Foundation covers a broad spectrum of community needs in the greater Sydney area. It provides a public community leadership role, by working in partnership with donors and local philanthropic organisations. This helps to identify and support grass-roots community needs particular to the Sydney community and promote solutions to problems that would not normally be funded.

Why should a donor use Sydney Community Foundation rather than making a once off donation to a charitable organisation?

Unlike a once-off donation, donations to the Foundation are pooled and invested and the income generated from this investment is used for the ongoing good of the community.

The main benefit is that a donation to the Foundation becomes a permanent investment in the community which continues to give over time, meeting the needs of future generations.

Furthermore, a donation can go a lot further and have more impact as it is part of a larger pool. Giving is made more effective because the Foundation provides donors with expertise in grant-making and local knowledge. As community needs change over time, the Foundation will change to meet those needs drawing on its community knowledge and extensive networks.

How easy is it to become a Sydney Community Foundation donor?

The Foundation welcomes donations of all sizes – every donation makes a difference. Smaller donations go into a pooled fund with others to have greater impact in meeting local needs in greater Sydney. Donors that wish to establish their own special giving program can do so by establishing a donor-advised sub-fund. This requires the completion of a donor application form. For further information, donors should contact the Foundation’s Chief Executive Officer.

Why should donors able to set up their own private foundation do so through Sydney Community Foundation?

Setting up a donor-advised sub-fund within the Foundation structure provides an efficient and cost-effective alternative to setting up and maintaining a private foundation. Donors can receive recognition for their generosity or remain absolutely anonymous. They can work with the Foundation Board to meet areas of identified community need. Donors can choose to be closely involved in the work of the sub-fund, or maintain an arms-length relationship. Sub-funds can be established either within the tax deductible or non tax deductible framework that the Foundation offers to meet the needs of the individual.

Most of all, donors can maximise the effectiveness of their charitable gift by making use of the Foundation’s body of knowledge about community issues and needs.

How much money is needed to establish a sub-fund with Sydney Community Foundation?

Donors can set up a named sub-fund on the understanding that it will reach a minimum amount of $50,000 within a five year period. There is no establishment fee to set up a sub-fund. An ongoing administration fee of 1.5% net of investment management charges is deducted to cover the cost of administration when established as an endowment.

Can donors decide how their gift is used?  

When establishing a named sub-fund, donors can identify their areas of funding interest, request possible grant recipients and work with Foundation staff to identify the most effective ways to meet their objectives. Under the current Australian Taxation office ruling governing the operations of a community foundation, the Foundations’ trustee has final discretion on grants made after considering the request of the donor or the donor’s advisory committee.

Are donations to Sydney Community Foundation tax deductible?

Those donors that wish to get a tax deduction are able to give to the Tax Deductible Fund. Donors that want greater flexibility in their giving and do not need a tax deduction can use the General Fund. All earnings within the funds are exempt from tax

How can donors be sure that their gifts are carefully managed?

The Sydney Community Foundation Board, consisting of community leaders representing a cross section of society, acts as trustee for two funds. Investment management services are outsourced to a reputable, professional manager and are subject to strict policy guidelines. The Board has set a Treasury and Investment Policy with the primary objective to provide a high degree of security through appropriate diversification and liquidity and to maximise returns within a conservative approach.

What information will donors receive?

The Foundation provides prompt receipting of donations and a notional statement of account on a half yearly basis. An Annual Report and review of the Foundation’s activities will be provided to all donors. Regular updates on activities, research and events are available through the Foundation’s website and by way of newsletters to donors.

How are grants made?

The Foundation was established recently and at this stage has limited funding available for grant making. We are open to receiving applications throughout the year and are also researching funding opportunities in our core areas together with our donors, Board members and community partners.

The grants committee is made up of Board members and reviews all applications, subject to established grant-making criteria. In doing so the Board draws on advice from qualified experts in various fields of social science and will establish, where appropriate, local community advisory groups to assist with the identification, selection and monitoring of projects.

What are typical community projects likely to be funded?

Grants are made to eligible organisations for projects that fall within the Foundation’s stated priority areas: youth at risk, young families (in particular social issues facing women and children), the aged, indigenous and culturally diverse communities and community environment projects demonstrating sustainability.

The Foundation seeks to identify current and emerging issues in greater Sydney and encourage long term strategic solutions. It works collaboratively, building on the knowledge and expertise of community connected specialists, to identify innovative initiatives that can be sustainable and replicable across the region. With the help of committed donors, a number of new initiatives have already been ‘kick-started’. More information ...

What is meant by ‘greater Sydney area’?

The Foundation’s funding is not geographically limited to Sydney, however it is intended that the bulk of funding will go to the greater Sydney area, encompassing communities such as Gosford & Wyong up to Newcastle to the north: Sutherland shire to the south; Camden & Campbelltown in the south west, the Blue Mountains, Penrith & Hawkesbury to the west.

Who founded Sydney Community Foundation and how is it governed?

Founding members included Charities Aid Foundation Australia, United Way Sydney, Philanthropy Australia and Heather Kent. Founding members have a great depth of knowledge of community needs and philanthropy and provide expertise and ongoing support. Initial financial support to undertake an extensive Feasibility Study and donor research was provided by several donors including the NSW Premier's Department, The Myer Foundation and some Sydney individuals.

The Foundation is governed by volunteer Board of community leaders and prominent citizen representing a cross section of society. Board members typically serve a three-year term with a maximum of three terms.