Resources and FAQs
How do Community Foundation Accounts operate?
FRRR’s Community Foundation Accounts have been designed to broaden the reach of both the Community Foundation (CF) and FRRR’s philanthropy into rural, regional and remote Australia. They may enable CFs to partner with FRRR to attract and access funding from any entity, as well as support projects outside the remit of their own operational scope. The account must have nominated geographic boundaries, in rural, regional or remote Australia, and the activities supported must be charitable, as per FRRR’s remit.
The FRRR Board approves the establishment of a Community Foundation Account within FRRR’s Public Fund for specific projects / purposes in line with the operation of Community Foundations. An MOU is entered into to detail the nature of the relationship between the Community Foundation and FRRR.
The Community Foundation may then undertake fundraising in line with their (and FRRR’s) charitable purposes and can direct donors to give to FRRR requesting their particular Community Foundation Account (donation forms assist in this process, enabling FRRR to match donors to account holders). FRRR issues Item 1 DGR Tax Deductible Receipts to donors, acknowledging in the receipt the donation has been made towards supporting the Community Foundation and any named, pre-agreed specific agreed projects / purposes the funds will support (such as a disaster relief appeal, building appeal, BTS vouchers etc – these can be managed as separate Sub-Accounts of the Community Foundation Account if requested).
How can CF’s use these Accounts? What are the benefits?
Community Foundation Accounts ensure that the CF sector can effectively and efficiently leverage a wide range of philanthropic support to address the disadvantage faced by rural, regional and remote communities.
Community Foundation Accounts may enable CFs to:
- Partner with FRRR to support organisations and projects that CFs can’t support directly with tax deductible money (such as granting to or fundraising for non-DGR entities for charitable projects using tax deductible funds);
- Access donors or partners they may not otherwise be able to accept funds from (such as Item 2 DGR Donors e.g. PaFs, PuAFs, Trusts and Foundations requiring Item 1 DGR status);
- Fundraise tax-effectively for a wide variety of activities such as endowments to their corpus, capacity building, subsidise or enhance general operations, improve or purchase infrastructure, buildings or IT, operate grant programs or scholarships, undertake disaster appeals, leverage Back to School vouchers or other charitable activities or projects;
- Partner with FRRR to engage with rural, regional or remote economic development as a charitable activity;
- Operate more efficiently: FRRR can relieve the burden of administering a public fund, or receipting donations - similarly FRRR’s online giving and credit card processing facilities and FRRR’s grant management expertise and services can be utilised, if desired.
Who owns and manages the Account?
The Community Foundation Account is owned and managed by the Foundation for Rural and Regional Renewal (FRRR). It is important to note that Community Foundation Accounts are not invested by FRRR, nor held in separate accounts, but rather the funds are pooled with other money in FRRR’s Public Fund, which we hold in a prudent manner. Accounts with funds over $100,000 for any month are credited interest, which is distributed quarterly.
Legally, all donations received by FRRR belong to FRRR for the distribution at the discretion of the FRRR Board. The CF can request a grant of funds from the account to itself or to third parties, however, FRRR retains the overall responsibility for grant decisions.
For identification purposes, Community Foundation Accounts within the Public Fund are accounted for in separate management accounts.
What is involved in setting up a Community Foundation Account?
The process to establish a Community Foundation Account are:
1) Submit an application
The cause needs to be charitable and within FRRR’s objectives of promoting rural and regional renewal, regeneration, and development in social, economic, environmental and cultural areas.
If the project/s align with FRRR's objectives, then the Community Foundation can submit its proposal to FRRR. Contact FRRR Philanthropic Services via email@example.com, or call 03 5430 2399 to have an initial discussion about your activities and request a Community Foundation Account Information and Application Kit.
2) Consideration by FRRR Board
Once submitted, the FRRR Board will consider the application. FRRR is responsible for assessing all applications for the establishment of Accounts against the established FRRR criteria, and for ensuring that funded projects fall within the scope of FRRR purposes.
If the FRRR Board approves the application, an account within the FRRR Public Fund will be set up for the approved purposes.
3) Execute a Memorandum of Understanding (MoU)
Once approved, a Memorandum of Understanding (MoU) will be exchanged with the Community Foundation detailing the terms and conditions of the agreement with FRRR.
The Community Foundation will then develop its publicity material / donation form in consultation with FRRR. All tax deductible money must be paid directly to FRRR for deposit into the FRRR Public Fund. FRRR fees are deducted on receipt of each donation / grant, up to a maximum of $5,000.
4) Project Funding
Monies raised towards the approved project will initially be held by FRRR until a request is made by the Community Foundation for the release of funds (grants) to the project.
Subsequent grants will be subject to adequate reporting having been provided by the Community Foundation on the expenditure of previous funds released, and if specified use is not retrospective.
How long will a CF Account be in operation?
Community Foundation Accounts are not established in perpetuity, but are operational for an agreed period of time, which may be renewed or extended upon mutual agreement. FRRR is not bound by legislation which specifies minimum annual distribution requirements.
What are the fees associated with Community Foundation Accounts?
FRRR will deduct a 2.5% fee up to a limit of $5,000, per donation. This means that if a donation of $1M is made to a Community Foundation Account, FRRR will still only retain $5,000 in fees. This is in accordance with the commitment of keeping fees at a reasonable and competitive level. FRRR deducts the fee from each donation received at the time of receipt. There are no other transaction, ongoing or annual partnership management fees. These fees assist in managing the costs of administering the funds in FRRR’s Public Fund and associated compliances. FRRR reserves the right to vary the fees but will keep the fees reasonable.
FRRR may approve the creation of Sub-Accounts for the purposes of fundraising for natural disaster recovery, for a limited period of time, or additional Back to School Vouchers. Sub-Accounts for either of these purposes have 0% fees.
At times, FRRR will administer grant programs on behalf of, or in partnership with other funders, which may include Community Foundations. In this case, a management fee is applied either as a percentage or hourly rate, dependent on the scope of work and FRRR’s role – the funds received for distribution to this program do not have the 2.5% fee applied, as a higher fee is negotiated for the service, as per an additional agreed Schedule.
What kinds of projects can be supported by a CF Account?
These accounts are very flexible and can be used to fundraise for a wide range of initiatives from supporting the ongoing operation of the Foundation, to scholarships, small grants, building funds etc. FRRR can also assist rural, regional or remote Community Foundations to make grants out to non-DGR not-for-profit organisations in their region for agreed charitable activities. Review the list of current Community Foundation Accounts to see how other groups have used these Accounts to partner with FRRR to fundraise for local projects.
Do you have any other resources we can review?
FRRR provides support to Community Foundations, helping them share knowledge and explore common issues. Some of the work we have done is available online as key resources:
- As part of the CIRCLE program, a series of seven videos were developed that investigate what a Community Foundation is, how they are structured, legal considerations and possible funding alternatives, as well as some tips on getting started. Watch Community Foundations 101 and hear from guests Georgie McKay from Stand Like Stone Foundation, Pat Claridge, from Tomorrow:Today Foundation, Dr Gill Sellar from Denmark Community Foundation and Robyn Hill from the Marysville and Triangle Community about their experiences building a successful Community Foundation. (Note: these videos may reference Donation Accounts, which is the old terminology for the new Fundraising Accounts.)
The Victorian Government's Department of Human Services' website also has a great series of videos and information that is relevant to Community Foundations everywhere.
If you still need assistance after reading the information on this site, please call us on 1800 170 020.