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A Very Good Idea
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Photo courtesy of Earl Mosley's Institute of the Arts (Kent, CT)
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The notion behind the community foundation is simple and inspired:
create an endowment fund to benefit the common good, invest it
prudently, administer it wisely, and let the yield from the principal
flow back to the community.
Invest the funds for long-term capital growth and, each year, spend part of the income to nourish worthy local causes.
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The well-managed endowment, a conglomeration of many individual funds,
will continue to grow, even as a percentage of its income is turned
back periodically to the community in the form of grants.
Over time, as contributions are added to existing funds and new
funds are created through new gifts and bequests, the community
foundation will mature into a self-sustaining financial institution and
an ever more powerful force for meeting human needs in its local
service area.
The arithmetic of endowment is compelling. An endowed gift, no
matter what its size, will generate in about twenty years grants
totaling more than the initial gift. In an average lifetime, that total
will be more than three times the initial gift. And the initial gift
will not only still be intact but will have increased in value.
As a means of ongoing social influence, the endowed gift is a
powerful instrument. Even the most modest of these funds will become
over time a source of philanthropic power. And when they are combined
with many other such endowed funds under the direction of a community
foundation, these individual funds become a major social force.
There are more than six-hundred-fifty community foundations serving
cities and towns in every part of the country. For all the diversity of
the people and places they serve, these institutions take their purpose
and vitality from the same enduring principle, the same clear-cut idea.
And what a very good idea it is.
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