What is a community foundation?

A community foundation is an independent and locally operated philanthropic organisation helping your community make a lasting difference.

By attracting tax-deductible community donations to its public fund, the foundation builds a capital base that is invested in perpetuity. This provides a permanent and growing source of revenue for community funding programs, with the interest returned to the people of south west Victoria as annual community grants.

What does “in perpetuity mean”?

The community foundation is different from other charitable organisations. The initial donation or gift you make becomes the capital and is invested to grow. Funds are invested securely and under the guidance of professional advisors. There is no entry fee or establishment costs.

Why a community foundation for South West Victoria?

South west Victoria has a long and proud record of private or individual philanthropy. However, in common with many other rural regions, there are issues and challenges which need attention. A community foundation understands the changing needs of its own community, which makes charitable giving more effective.

Local community projects and programs are often difficult to fund. The South West Community Foundation can help, raising and providing funds for start-up projects and contributions to worthwhile charitable projects and programs. The South West Community Foundation is able to service the region it represents with some unique features.

These include:

  • Investing in the future of the region
  • Community strengthening through participation and action
  • Providing a central and low cost administration.
  • Community growth through retaining wealth in the region.
  • Established network of donors.
  • Support and service to donors.
  • Regional identity.
  • Regional focus.
  • Self-help philosophy.
  • Tax deductibility.
  • Different options for giving.
  • Local recognition, ownership and collaboration.
  • Local knowledge – strong understanding of networks in the community.
  • Public accountability.
  • Committed Board of Directors with high individual integrity and recognition.
  • Transparency in grant-making and reporting.

The foundation’s strength is its difference from other funding organisations. Its board has an excellent knowledge of the region’s community needs and is able to quickly assess the region’s priorities.

How is the South West Community Foundation structured?

The South West Community Foundation is a public company limited by guarantee, incorporated under Corporations Law. It acts as the community foundation for public charitable purposes and has income tax exempt status. The foundation is governed by a Board of Directors representative of towns and localities across the south west region. Directors are local people with demonstrated skills and experience and with a record of commitment to the district.

The directors are also people whom the Australian Tax Office regards as demonstrating community responsibility because of previous public offices they have held or their membership of professional bodies. Directors receive no fees and provide their time and professional expertise free of charge. Current directors are listed on our website. Directors seek advice as required. The directors are assisted by a part-time Development Officer and with pro-bono services from professional firms.

The company and its directors act as the trustees of the South West Community Foundation public fund, open fund, disaster fund and scholarship fund.

What tax benefits are available?

The South West Community Foundation public fund has been endorsed by the Australian Tax Office as an Income Tax Exempt Charity and Deductible Gift Recipient (DGR). Donations and bequests to the public fund are fully tax deductible. Bequests are exempt from capital gains tax. Tax concessions are also available for the scholarship and disaster funds accountability and reporting. An annual report is published, including financial statements audited by an independent registered company auditor. Copies are sent to local government authorities and the press. An annual report is also lodged with the Australian Securities and Investment Commission. The annual general meeting is advertised in the press and members of the public are invited to attend as well as those donors on the foundation’s mailing list.

What is the Donor Program?

The Donor Program is structured to achieve the best fit between the needs of donors and the foundation.

Donors may be:

Such a wide range of potential donors can be accommodated via the company structure and public fund. Confidential discussions held with individual donors will help to ensure that the requirements and preferences of the donor can be met in a manner that meets the requirements of company and tax law pertaining to community foundations.

Donation options and opportunities

The public fund

The South West Community Foundation encourages the community to contribute to the foundation’s public fund. Donations – large and small – which are added to the growing public fund, are tax deductible. For substantial donors there will be an option of establishing a named donation account within the public fund. In a similar way, family members are able to preserve the memory of a deceased family member, friend or outstanding citizen. Donors can also indicate a preference for supporting a particular group, sector or eligible charities with their gift.

The interest from the public fund will be spent annually to bring about positive social, cultural, economic and environmental change in south west Victoria. Grants will be made to organisations with deductible gift recipient (DGR) status which are working on projects or incentive programs in line with the foundation’s objectives.

The open fund

Donations or grants to the open fund can be made to a range of charitable purposes, not just to DGR endorsed charitable organisations. Gifts to the open fund are not tax deductible (although a business may receive a tax deduction as a business or marketing expense in some instances). Sometimes a tax deduction is not required by a donor as in the case of a government or charitable grant, a bequest or a corporate gift or sponsorship.

Funds contributed to the open fund will generally be used in that financial year on foundation priorities through the grants program and other projects.

How does the foundation decide how to use its income?

Advice is sought from appropriate regional and community organisations and local government about the areas of greatest need.

Named fund donors may suggest how proceeds of these funds could be distributed.

Foundation Ambassadors from each local government area in the region will identify the community needs and challenges of their district.

Submissions are invited and the grants committee recommends to the board how each year’s income is distributed.

What about the foundation’s costs?

The costs of establishing the Foundation have been supported by the Foundation for Rural and Regional Renewal (FRRR) and the Greater Green Triangle Area Consultative Committee. In-kind and pro-bono support was received from Warrnambool City Council, Sinclair Wilson Accountants and Business Advisors, Community Connections Victoria and volunteers from across the region. Financial assistance will be sought from other sources to meet the running costs wherever possible and a modest charge will be made against the funds being administered. The charge will not exceed two per cent per annum of the capital sum being administered.

Who controls the foundation?

Our aims and priorities are decided locally by the South West Community Foundation’s Board of Directors, who consult broadly with local communities. The directors are local people with demonstrated skills and experience and with a record of commitment to the district. The directors are people whom the Australian Tax Office regard as demonstrating community responsibility because of previous public offices they have held or their membership of professional bodies.

How will the community know how the foundation is progressing?

The annual report is published, including financial statements audited by an independent registered company auditor. Copies are sent to the local government authorities and the press. A copy of the annual report is also lodged with the Australian Securities and Investment Commission. The annual general meeting is advertised in the press and members of the public are invited to attend.

What can I give?

Donors may give all forms of personal and real property to the South West Community Foundation. Gifts for which tax deduction may be claimed include cash, property purchases in the last 12 months and trading stock. The definition of property is broad and includes land, artwork, shares and some other rights and interest which have value. Gifts of property and trading stock will need to be professionally valued if a tax deduction is to be claimed.

How do I make a gift?

A person wishing to make a gift to the South West Community Foundation could be at any stage of life and financial circumstances. It is therefore possible to arrange your gift so that it suits your circumstances. If you wish your donation to be tax deductible in the current year, or carried over five years, you will need to make your gift in this financial year.

A donation to the South West Community Foundation is an investment in the future of the communities of south west Victoria.

See our donations page for information on how you can contribute.

Additional information on the Community Foundations network in Australia can be found at Philanthropy Australia.