Community foundations (CFs) are instruments of civil society designed to pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place. Community foundations are a global phenomenon with 1400 existing around the world of which over 700 are in the United States.

Community foundations are independent registered philanthropic institutions serving geographically defined territory, typically a city or administrative area (county, region and the like). The six main characteristics of the CFs are:

It is a combination of all these basic characteristics what makes true CF, although there are many other types of community organizations that have some of these characteristics.

Families, individuals, businesses, and nonprofit groups establish funds within community foundations into which they can contribute a variety of assets to be used for charitable purposes. The people or organizations that establish the funds can then recommend that grants be distributed, in the name of the fund or anonymously, to qualified nonprofit groups and schools. In the USA the donor receives a charitable deduction in the year that gifts are made into their funds, but not all countries where community foundations currently operate provide such incentives for donors. Increasingly, community foundations are hosting giving circles as a way to further support giving in their communities.