What’s a community trust fund?

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A community trust fund is a non-profit organization that receives money from donors to improve a specific community. It can be structured as a traditional or non-profit trust, and wealthy donors may contribute to set up an endowment. The fund awards grants for various projects, such as education, health, and the environment, and can partner with local governments to achieve specific goals.

A community trust fund is a non-profit entity created for the purpose of improving and enriching a particular community or municipality. It receives money from donors who want to support the efforts of the fund. A board of directors is responsible for evaluating and approving the possible uses of the funds.

A community trust fund can be structured like a traditional trust fund where the assets are managed by a bank. You can also structure yourself as a not-for-profit corporation and hire an investment manager who will oversee the investment of the funds. The goal of either structure is to maximize the fund’s earnings in order to provide a long-term cash flow for your charitable endeavors. Once the fund is established, the trust documents detail how many board members there will be, how they will be elected or appointed, and how long they will serve.

Wealthy donors may choose to contribute to a community trust fund because they have a tie to the community. A person who has spent a lifetime in a certain area and watched it grow and develop could help in the future growth and health of the area. The community trust fund can help a donor set up an endowment so that a portion of the donor’s estate goes into the fund but also goes toward projects that are of particular interest to that donor.

A community trust fund will often award grants to those seeking funds for specific projects. The fund will establish a procedure that individuals or organizations must follow to apply for grants. The required information may include the mission or purpose of the project, the amount of money requested, and the expected period of time to complete or organize the project. The trustees of the fund will assess the potential benefit to be derived from the project and decide whether to approve the grant.

Projects sponsored by a community trust fund can include a wide variety of objectives. The focus may be on issues such as families and children, education, health, the environment, or culture. Projects can include things like scholarships for disadvantaged students or the purchase of equipment for schools or sports programs. Programs may offer educational opportunities for displaced workers or welfare recipients, for example, or they may provide training programs and activities for youth to keep them in school and out of the criminal justice system. Community projects can do things like promote recycling or other environmental programs, help expand parks and gardens, or sponsor preservation of historic buildings.

A local government might partner with a community trust fund to achieve specific goals. When government budgets don’t stretch far enough to support special programs, the community trust fund can help fill the gap. This cooperation of public and private interests can benefit all citizens of a community.

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