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Introduction to Community Foundations
The Hope InstituteThe Beautiful Foundation
Barnett F. BaronThe Asia FoundationFebruary 13, 2008
What is a community foundation?
An independent, nonprofit, grantmaking organization Usually limits its grantmaking to a defined geographic
area (city, county, urban or rural area) Governed by a voluntary board of directors usually
composed of representatives of the communities it serves
Provides the legal framework to manage multiple separate funds or endowments named for specific donors, or created for specific purposes or locations
Funded from multiple sources: individuals, families, corporations, foundations, sometimes local governments
Provides expert staff advice and services to multiple community donors and grantees
Seeks to initiate, engage, or facilitate community discussion about critical community issues
U.S. community foundation statistics (2005)
707 community foundations (413 in 1995) ≥ $44.5 billion in assets (the total has more than tripled
since 1995, but half of all community foundations still have assets of less than $10 million)
$5.6 billion in gifts received in 2005 $3.2 billion in grants made in 2005 (400% growth since
1995, but three-fifths give less than $1 million) Account for 1% of grantmaking foundations but 9% of total
giving (compared to 10% by corporate foundations and 68% by independent foundations)
Source: Foundation Center, Key Facts on Community Foundations, September 2007; and Community Foundation Giving and Assets 1981 to 2005, available at foundationcenter.org/findfunders/statistics/pdf/02_found_growth/00_05.pdf.
Top 10 Community Foundations (2006)
Name Assets ($bn) Gifts Received ($mm)
Grants Made ($mm)
Tulsa CF $3.07 $738 $50.6
New York CT 2.04 89 164.1
Cleveland CF 1.89 32 72.6
Silicon Valley 1.74 292 213.7
Chicago CT 1.64 89 77.9
California CF 1.3 235 245.5
Marin CF 1.22 29 60.9
Kansas City 1.05 179 172.1
Oregon CF .99 77 49.8
Columbus CF .98 107 72.3
Community leadership roles
Convening stakeholders around a common problem or theme
Forging partnership to leverage additional public or private resources
Brokering new relationships within community, including bringing contending parties together
Providing training and technical assistance to nonprofit grantees
Speaking out on issues to the media Commissioning research and needs assessments to
identify service needs Collaborate in creating new institutions (e.g., Martin
Luther King Library in Atlanta, Georgia)
Community foundation advantages
Located in the communities they serve, community foundations are “closer” to and may be more responsive to community needs
You do not have to be wealthy to donate: gifts can be made at any level
Alternative to setting up a private foundation Provide expert staff services to donors and grantees Governance structures are more likely to reflect the
demography and politics of local communities than the governing boards of independent, corporate, or family foundations
Community foundation advantages
Community foundations have contributed to the “democratization” of philanthropy in the U.S., through
• Donor-advised funds
• Providing relatively more support for basic human services
Donor-Advised Funds (DAFs): Creating a Charitable Checking Account
Separately managed charitable giving accounts that exist under the umbrella of a larger public charity, such as a community foundation
DAFs can be as little as $10,000 or as large as several $millions – “anyone” can be a philanthropist
Donors receive an immediate tax benefit Distributions (grants) can be made over time Donor has the privilege of “advising” to whom the
grants can be made Donor gets the benefit of expert staff who work for the
community foundation Donor does no administrative work An alternative to establishing a private foundation
Donor Advised Funds
Fastest growing segment of the US charitable sector Assets under management have more than tripled in
the last decade Offered by both philanthropic institutions (such as
community foundations) and commercial financial firms (e.g., Fidelity Charitable Gift Fund)
In 2007, Fidelity had $4.6 billion in assets in 42,000 separate DAFs. It made $995 million in donor advised grants.
Between 1991 and 2007, Fidelity made $7 billion in grants to 111,000 organizations.
Fidelity Charitable Gift Fund 1991 – 2007
Charitable divide in the U.S.
“Research shows that less than 10 percent of the money Americans give to charity addresses basic human needs, like sheltering the homeless, feeding the hungry and caring for the indigent sick, and that the wealthiest typically devote an even smaller portion of their giving to such causes than everyone else.”
Stephanie Strom, “Big gifts, tax breaks, and a debate on charity,” New York Times, September 6, 2007; Nicole Wallace, “Donors overestimate their antipoverty giving,” Chronicle of Philanthropy, January 24, 2008.
Charitable divide in the U.S.
80% of donations of $10 million or more go to elite colleges or universities, medical institutions, or arts and cultural institutions.
Households with annual incomes below $100k provide 49% of all contributions to organizations that provide food, shelter, and other basic necessities to needy people.
Holly Hall, “A Charitable Divide: As wealthy institutions report record fund-raising gains, social service groups struggle to stay afloat,” Chronicle of Philanthropy, January 10, 2008, citing Gary A. Tobin and Aryeh K. Weinberg, Megagifts in American Philanthropy, Institute for Jewish Community Research, December 2007, available at www/jewishresearch.org/PDFs/MegaGift.EWeb.07.pdf.
Charitable Gifts of $1 Million or More
Private higher education 25%Public higher education 19Health and medical 16Arts and culture 12 72%Public and society benefit 5Human services 5Secondary/elem education 4General educ 4Environment 4International 3Religion 2Federated appeals 2Other 1
Grant Priorities
$1 Million +
Pvt H Ed
Pub H Ed
Health
Art & Cult
Pub Ben
Hum Svs
Community foundation grant priorities (2005)
Education 23%Human Services 22Health 14Arts & Culture 14Public Affairs/Benefit 12Environ/Animals 6Religion 4Science/Tech 3International 2Other 1
Grant Priorities
Community Foundations
Educ
Human Svs
Health
Art & Cult
Pub Ben
Environ
Human services
Not only do community foundations provide more support to human services organizations, but within the human services category, community foundations are more likely to than either independent or corporate foundations to focus on people with disabilities, the aging, victims of crime or abuse, and substance abusers.
Globalizing the community foundation model
Cleveland Community Foundation 1914; Winnipeg Foundation 1921 US model originally based on gifts from wealthy local families and
corporations Later expanded to middle-class through DAF and pooled funds UK in 1980s – prominent role of government funding for start-up
costs and basic operations (Community Foundation for Northern Ireland)
Central, Eastern Europe, Russia, and Africa: strong role of USAID and international ODA community. Mott Fdtn, CAF
Asia: role of international NGOs and foundations (Ford, Synergos). Growth of international support organizations: WINGS-CF, World
Bank WINGS now identifies 1175 community foundations in 46 countries
(274 outside the US, UK, and Canada)
Issues: What is a “community”?
There are widespread Asian traditions of Clan associations Guild associations Religious trusts Self-help associations for internal migrants and international
immigrants based on place-of-origin Village self-help organizations
There are even examples of clan-based endowed agricultural estates during the Sung dynasty in China, which distributed grain and money to needy members of the clan.
Are these good models for contemporary community foundations? Or are they obstacles?
Issues: Confucian ideals?
Benevolent government is the best philanthropy.
• Beyond one’s own network of personal and family relationships, is benevolence the duty of government?
• Why does Asia lag in the growth and popularity of community foundations?
• Does The Beautiful Foundation represent a break from those traditions? Can it be a model for other Asian (Confucian) societies?
Issues: Dependence on Foreign Aid?
The recent surge in interest in community foundations around the world has been largely initiated and funded by external donor agencies, including foundations, international NGOs, USAID, and the World Bank.
Can funding for local community foundations be sustained by local sources? At what levels?
Resources: WINGS
WINGS: Worldwide Initiatives for Grantmaker Support
2005 Community Foundation Global Status Report, at www.wingsweb.org/download/GSR2005_p1a.pdf
International Connections: Resources that support the growth and development of community foundations globally, at www.wingsweb.orf/download/InternationalConnections.