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Community Foundations Have a Unique Ability - Variance Power

With so many nonprofits struggling amidst the economic fallout created by the Global COVID-19 Pandemic, what does a donor do to ensure that an estate gift established to support their favorite nonprofit remains impactful if the nonprofit ceases to exist at the time the gift is realized? How can that donor’s philanthropic legacy be protected for future generations if a nonprofit organization goes out of business? Enter the work of the Community Foundation of Anne Arundel County (CFAAC).

Community Foundations, such as CFAAC, have a unique ability to protect a donor’s interests long after that donor’s lifetime. This protection falls under the ability of CFAAC’s Board, made up of community leaders, to use its variance power to ensure that the donor’s intent is fulfilled in perpetuity. Through the terms of a standard fund agreement between the donor and CFAAC, the donor can outline their specific charitable intentions and acknowledge that should their gift to a specific nonprofit not be possible, the Board has the authority, through their variance power, to follow-through with the gift’s original intention. 

CFAAC holds a variety of types of funds including Donor Advised Funds, Designated Funds, Field of Interest Funds, Endowment Funds, Agency Funds, and Corporate Advised funds, which may benefit a specific nonprofit organization or a variety of nonprofit organizations. The funds can be endowed, partially restricted, or unrestricted. To see how variance power works, take this example: perhaps a donor who is fond of a local mentorship program has set up a designated endowment fund to benefit that organization through the donor’s estate plan. That donor’s designated endowment fund is established to provide income in perpetuity to the mentorship program. Twenty years later, the donor has passed on and the legacy gift has been realized, but the program no longer exists. The Community Foundation has the authority, through the Board’s variance power, to redesignate those funds to a similar nonprofit organization whose work most closely aligns with the donor’s original intent. By identifying a similar alternative nonprofit organization within the community that offers a mentorship program, the Board protects the donor’s legacy.

Variance power not only allows a donor’s charitable wishes to be followed and continue in perpetuity, but also allows CFAAC to respond to the changing needs of nonprofit organizations within the community. It’s a winning combination for the donor, the nonprofits, and future generations.

To learn more, contact our Development Department at 410.280.1102 x 102 or via email at


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