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In order to build a positive impact for their communities, the main work of community foundations is to establish and transparently manage funds for a well-defined purpose.

There are several types of funds according to their purpose/how they are spent or their source/how they are established.

Based on their purpose, funds may be:

  • Field of interest funds, such as youth, health, environment funds. Examples of such funds managed by Romanian foundations include youth funds - YouthBank, 'Collegium. Excellence in Education' Fund. 
  • Unrestricted funds for various community initiatives, such as funds created for fundraising initiatives that give donors or fundraisers the freedom to select the projects or areas they want to endorse. At Cluj, such funds were set up after the two editions of the charity swimming competition – Swimathon. Another example is the Good Idea Fund managed by Odorheiu Secuiesc Community Foundation. 
  • Funds that inspire a particular approach to problems, for example a fund for volunteering initiatives or district initiatives. Thanks to this type of funds, Cluj kindergartens and neighborhoods have turned green, while at Odorheiu Secuiesc they have given a boost to volunteering initiatives for renovating playgrounds and other public spaces in different neighborhoods as part of the 'Urban Kalaka' program. 

Based on how they have been established:

Funds may come from an individual donor or from a company or from a well- defined group of donors and their purpose is decided by the community foundation according to the donor’s/donors’ desire and requests. Hence, we can draw a distinction between several types of funds that have already been created in Romania:

  • Company-named fund. We find examples of company-named funds at Cluj, like Terapia Ranbaxy Fund or Softvision Fund. 
  • Family- or individual donor-named fund. At Cluj, such an example is 'Fred C. Robey’ Fund that offers scholarships to youth. 
  • The fund of the employees/residents/customers/individual donors from a given company/institution/district. Currently, the 'Urban Kalaka’ program from Odorheiu Secuiesc gets payroll giving support from the employees of several companies. In the same community, a fund has been set up using a loyalty program whereby businesses offer discounts to customers as well as a fund donation each time they use a community card. 

Based on timeframe:

We can make the difference between endowed funds and flow-through funds. Flow-through funds use a given mechanism to mobilize resources from one or more donors that they later redistribute in the community over a relatively short period of time. The funds that are currently administered by community foundations in Romania are of this type. If however we look beyond the current needs of the community, foundations are a tool for people with resources on their hands to help successfully address future needs through contributions to endowed funds. Endowed funds are saved in a bank or invested and only the fund-generated interests or dividends are used – as a result, the fund ‘does not run out’ and may generate a relatively stable flow of resources for the community. To date, Romanian foundations haven’t yet set up funds based on this mechanism. Using an endowment helps contain the year-to-year rise and fall of funding and gives donors the chance to see their resources yield results for the community over an indefinite period of time.

Involving the community in decision making

To build and maintain public trust, community foundations invest in transparency and open communication with regard to the goals and objectives set for the established funds, for the funds raised, the use of funds, and decision making procedures. In Romania, community foundations involve both experts and representatives of donors and of the community in various committees that advise on grant- making or give the chance to a large number of donors who are contributors to the fund to pick a project of choice. For example, YouthBank grant-making decisions are advised by the youth involved in the establishment and promotion of the fund. The 'You Choose’ campaign from Odorheiu Secuiesc allows community card users who contribute to the fund to choose the project they want to support from a shortlist of projects. Based on a similar device, the charity swimming competition from Cluj proposed to participating companies a project catalogue at its first edition. In the second year, apart from the projects proposed by the foundation, the swimmers could also suggest projects they wanted to endorse. Decisions related to company-named funds are made by a joint committee comprised of experts in the field, foundation’s experts and a donor representative.

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