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Wednesday, March 10, 2010

Ky. may be next to boost community foundations

UPDATE, March 26: The legislature has passed the bill and sent it to the governor, though without the originally proposed tax credit, because of budget implications.

Last month we excerpted an editorial from Eastern Kentucky community organizer Gerry Roll advocating that the state encourage investment in rural community foundations. Now her state senator, Republican Brandon Smith of Hazard, has taken the first step in that process by introducing Senate Bill 227 which would create the Endow Kentucky Program to boost community foundation endowments.

A community foundation is a tax-exempt public charity developed to serve a specific geographic region. Advocates of such foundations say they provide a trusted place for residents or expatriates to make gifts or bequests to help their home areas, and are especially needed in rural areas, which tend to lag when mit comes to philanthropy.

SB 227 would create a community endowment fund with private donations and later appropriations from the state to offer competitive grants to community foundations, and create a commission tasked with "planning, implementation and direction of a strategic and collaborative philanthropic partnership to focus on building endowment funds that will address community needs through community foundations." It would also create a tax credit for contributions to community foundations.

At least 20 states offer special tax credits or deductions for gifts to philanthropic organizations, the Rural Development Philanthropy Network reports. A few states, including Ohio and South Dakota, have devoted state funds to community foundation support, and Iowa created an endowment challenge fund, funded by gambling revenue. Iowa reports the 85 counties that are eligible for the program because they have no legal gambling have all developed active community foundations since the law was implemented in 2005. Community foundations eligible for the Kentucky programs would be required to meet the national standards for community foundations established by the National Council on Foundations.

The Foundation Center, a national nonprofit service organization, has published detailed data about community foundations across. The Rural Development Philanthropy Network has brochures teaching rural community foundations how to build endowments and the role local media can play in development of such foundations.

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