COMMUNITY FOUNDATION, or COMMUNITY TRUST, THE, in the United States is an agency organized for the permanent administration of funds placed in trust for public educational, charitable, scientific, or benevolent purposes. The first of such trusts to be organized was the Cleveland Foundation, brought into existence in Jan. 1914 by the Cleveland Trust Com pany, of Cleveland, O. (q.v.). Its founder was Frederick Harris Goff, then president of the Cleveland Trust Company. The funda mental plan of organization of the Cleveland foundation has been closely followed by nearly all subsequent community foun dations. It has four characteristic features: (I) Its funds are not the gift of a single individual or family, but the union of numer ous large and small gifts left at different times by various donors and designed to promote the well-being of mankind. (2) These funds are placed in the custody of banks and trust companies charged with the duty of safeguarding and investing them, but have no voice in directing their expenditure. (3) The income of the funds is disbursed by a committee, changing through rotation of appointments, chosen for their knowledge of the educational, charitable and benevolent needs of the time, and selected in major part by public officials. (4) This distribution committee must respect and observe the expressed desire of the founder of a trust as to the particular purpose for which it shall be applied, subject to the condition that if it shall appear that circumstances have so changed since the execution of the will or deed of trust as to render unnecessary, undesirable, impractical or impossible a literal compliance with its terms, a resolution adopted by the committee may operate to free the instrument of gift from any specific restriction or provision. The fundamental characteristics of the community foundation may be summarized as providing for the union of numerous gifts instead of a single large one; arranging for the business control of the investments, and the social control of the expenditures; and the attempt to substitute contemporary wisdom for foresight in the use of the income.
In the years since the Cleveland Foundation was organized there have been established more than 75 such trusts, with about 25o banks and trust companies as their trustees. In some cases there is only one trustee, and in others several. This latter arrange ment is known as the multiple trusteeship. In nearly all cases the objectives are broadly stated as being the promotion of the well-being of mankind, and especially that of the inhabitants of the city where the foundation is located.
In 1935 there were io community foundations each of which had active principal funds in sums of $1,000,000 or more. These io community foundations were located in the following different cities in the United States: Boston, Buffalo, Chicago, Cleveland, Denver, Indianapolis, New York, Richmond, Santa Barbara, and in Winnipeg, Canada. In the case of each of these cities, and also in that of many others, it is known that wills of certain per sons are in existence that will bring bequests to the organizations in future years, and in some of these instances in very large sums of money.
In 1925 some 16 different community foundations distributed nearly $45o,000 of income. In the year 1928 there were 26 which disbursed about $600,000. In 1935 the number that had begun to distribute funds had increased to 54, and the distributions to more than $1,000,000. The active principal funds of the 78 com munity foundations existing in 1935 were approximately $4o,75o, 000 in amount. (L. P. A.)