For Professional Advisors
About The Community Foundation of Middle Tennessee
The Community Foundation of Middle Tennessee is a community foundation established to improve the quality of life in Middle Tennessee and beyond. It exists to build and hold a permanent and growing endowment for the community’s changing needs and opportunities. It serves as a testimony to the desire to give, create, change all to make a difference. The true heart and soul of this Foundation is attracting unrestricted gifts; the income from which can be used to meet the most pressing needs of the community as they arise. In essence, we seek to create a pool of funds to endow the quality of life we enjoy in Middle Tennessee and to help protect it for generations to come.
Incorporated in 1991, The Community Foundation of Middle Tennessee, Inc. (CFMT) is a qualified publicly supported charity under Internal Revenue Code Section 501(c)3 and 509(a)1.
The symbol of The Community Foundation’s work is the bee. Our bee represents philanthropy which is, at its heart, cross-pollination; gathering from those who have and getting it to those who need.
Since its beginning in 1991, The Community Foundation of Middle Tennessee has grown to be one of the largest community foundations in the United States. The substantial growth of its assets has enabled it to become a significant source of grants in the Middle Tennessee region.
THE COMMUNITY FOUNDATION INVESTMENTS
A volunteer group of qualified financial professionals makes up the Investment & Finance Committee. This group is responsible for oversight of The Foundation’s investments and investment managers and the committee reports to the Board of Directors on investment matters, including the acquisition, disposition, administration, and management of investments and the performance of investment managers. The committee is chaired by the Treasurer and composed of no less than two additional directors and is aided in its analytical and evaluative work by Consulting Services Group, Inc.
INVESTMENT POLICY
The Community Foundation of Middle Tennessee’s investment objectives are to maintain and, when possible, increase the purchasing power of the endowment, and to produce a reasonable return for distribution to maximize The Foundation’s ability to meet current community needs.
To meet its investment objectives for permanent funds, The Foundation follows a total return strategy: Investment decisions are made with the intent of maximizing the long-term total return of the entire portfolio both from market value increases (realized and unrealized gains) and from current yield (interest and dividends). Investment managers are free to allocate assets among stocks, bonds and cash in a manner that they believe will produce the highest return without the constraint of producing a specified amount of income for distribution.
When a significant gift is made, The Foundation can offer flexible options available for investment management of its funds.
GRANT-MAKING
Charitable funds provide resources for grant-making and can help make a positive difference in the community. Carrying out the wishes of donors, The Community Foundation of Middle Tennessee disburses grants to nonprofit organizations recognized as public charities exempt form income tax under Section 501(c)3 of the Internal Revenue Code.
The Foundation addresses key issues in the community and works in partnership around shared community goals while striving to attain long-term measurable outcomes and to maximize grant-making effectiveness. Grants provide support for the work of nonprofit organizations in areas “from arts to zoology” including but not limited to areas such as the arts, humanities, conservation, education, health, social services, urban affairs, and advancing philanthropy.
Unrestricted and Field of Interest Funds enable The Foundation to put resources to work where they are needed most and involve a competitive grants process. To make grants from such funds, The Foundation annually receives and reviews proposals from organizations servicing their 40 county Middle Tennessee area. All grants are approved by the Allocations and Distribution Committee and the Board, assisted by a professional program staff that reviews and evaluates all proposals.
GOVERNANCE
The Board of Directors is the governing body of The Foundation responsible for administrative policy and authorization of all grants. Each of the members bring his or her own experience and background, whether in business, community service, law, education, finance, or other areas, to bear on the direction of The Foundation’s work. Their familiarity with local issues and knowledge of changing economic and social conditions sharpens their ability to function and advise Foundation staff. It is their responsibility to represent the donors’ interest, to monitor grantees, and to ensure, through the years, a most advantageous application of grant dollars.
SPENDING POLICY
The Foundation’s spending policy sets distributions for grants at a fixed percent of the portfolio’s average market value over a prior multiple quarter period. This policy covers unrestricted, field of interest, designated, agency endowment, affiliate, and scholarship funds. The policy was adopted to assure a stable and predictable flow of funds for grant-making and operating expenses, despite market and yield volatility.
VARIANCE POWER
One of the distinguishing characteristics of a community foundation is its variance power. The variance power permits The Foundation to modify a restriction on a fund. This may happen when the Board of The Foundation determines that the restriction is unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community.
Inclusion of the variance power in The Foundation’s governing documents is a requirement of the tax regulation applicable to The Foundation. Perhaps more importantly as a practical matter, the variance power allows The Foundation to take changing times into account – for instance, to modify the purpose of a fund designated to fight a disease that is then defeated, such as polio. The Foundation would only exercise the variance power with great care, giving full consideration to the original intent of the donor and attempting to arrive at the closest similar purpose.