The Wairarapa Fund, to be managed by a group of community leaders, will begin distributing grants once donations reach $75,000.
Louise Parkin, Nikau Foundation chief executive, said the foundation allows "locals to help locals".
"Our motto is 'give where you live' -- and people are more likely to give if they know it's going to benefit local people," Ms Parkin said.
"Wairarapa is a wonderful community, and people want to see it thrive."
Close to 100 people attended the launch of the Wairarapa Fund, including local MP Alistair Scott, Carterton and South Wairarapa mayors John Booth and Adrienne Staples, former Masterton mayor Bob Francis and Greater Wellington Regional Council chair and Nikau Foundation patron Fran Wilde. The latter two are both members of the new fund's committee.
Mr Scott said the fund was "a great conduit for Wairarapa's generosity".
"People here are always turning up to support something in their community," he said.
"When people have the opportunity to give to something local, something turns on in their mind, and they are more motivated."
Receiving donations from the foundation were Age Concern Wairarapa, Presbyterian Support, Riversdale Surf Life Saving Club, St Matthew's Church Seniors, Wairarapa Community Centre, Wairarapa Women's Centre, and Wellington Free Ambulance.
These grants were funded by the the Roy and Jan Mace Charitable Trust, set up by long-time Brammerton Station farmers Roy and Jan Mace for donating to Wairarapa causes and now under the administration of the foundation.
Riversdale Surf Lifesaving Club president Dave Rose thanked the foundation, whose previous support had contributed to the club's success -- which, last summer, included 45 guards on the beach, 25 rescues and 235 preventative actions.
"It helps us with all the stuff taxes can't quite accommodate."
Ms Parkin announced the Wairarapa Fund had received its first donation -- $5000 from an anonymous donor.
"I got the email just this week -- they're a very well-known and generous Wairarapa couple," she said.
Ms Parkin said donors can give to a specific charity, or simply give to general areas of interest like arts, education, youth, environment, animal rescue, or mental health.
"We've had all kinds of causes -- a stamp collecting group, cat welfare, $1 million set aside to help teenagers ... It's really cool to see the donors' dreams realised."
Donations do not have to be large as the interest will build over time.
"Not everyone can be a wealthy billionaire philanthropist, but this empowers ordinary people to give.
"For example, in Kapiti, we have an estate agent who gives us $250 for every house she sells."
For more information, go to www.nikaufoundation.org.nz.