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On the Brink of New PromiseTHE FUTURE OF U.S. COMMUNITY FOUNDATIONS
Content provided by Blueprint Research & Design, Inc. and the Monitor Institute
A presentation for the
[Your Organization Name Here]
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
A New Era of Community Philanthropy is Emerging
The next generation is likely to create surprises as important as Fidelity’s entrance into the field in the past generation.
Community foundations are a prominent feature in the picture of community philanthropy, but they are by no means alone.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Today’s Landscape for Community Philanthropy
Community foundations today operate in a more complex and crowded environment
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
A Snapshot of Today’s Crowded Environment
Community Foundations
Alternative and Community-Based
Foundations
Identity-Based Focus Funds
Giving Federations
United WaysLocally-Focused
Private Foundations
Commercial CharitableGift Funds
Healthcare ConversionFoundations
Hometown Associationsand Remittance Giving
Locally-BasedCorporate Giving
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Today’s Competitive Environment for Community Foundations
CommunityPhilanthropy
(including community foundations)
Nonprofits
SubstituteProducts and Services
1
Suppliers,Distributors,
Vendors
Commercial Players
Not only is the arena of community philanthropy more crowded, a range of other competitive forces are also affecting the field.
Improved connectivity can allow donors to link directly with nonprofits
Competition from low-cost/ high volume providers like Fidelity and Vanguard, as well as high-end wealth management advisors
Innovations like Donor Managed Investment Funds and Dynasty Trusts may create new alternatives
Professional service firms and technology providers are beginning to offer services that overlap with community foundation services
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Community philanthropy has long been connected to several allied industries, such as accounting, tax law, estate planning, investment advising, and financial management. As each of these industries innovate, merge, and develop new services, they will force philanthropy to respond.
Philanthropy in the next generation will operate under increased regulatory and public scrutiny. The field will also be affected by regulatory changes in other sectors, including tax law, homeland security, and intellectual property law.
In the next generation, America will grow bigger, older, and more diverse. The changing face of the population will fundamentally alter the composition and social dynamics of communities, as well as the services they require.
With the shift from an industrial economy to an information-based one, corporate consolidation, globalization, and outsourcing are likely to rearrange local economies as corporations become increasingly mobile.
Forces Shaping the New Era
• Economic and market pressures
• Demographic changes
• Changing expectations for regulation and accountability
• The commercial sector as innovator
• Changing relationships between sectors and new expectations for public problem solving
Ongoing structural shifts in government services and corporate responsibility will require philanthropy to continuously assess these relationships as it defines its role.The combination of these forces is inescapably changing much
of what now feels familiar.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
The forces and circumstances of today aren’t just a blip in time, unrelated to what has come before or after.
Learning from the Past
The same forces have shaped each of the major historical periods of evolution of community philanthropy in the U.S.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Early Community Philanthropy
Early American community philanthropy was characterized by informal practices of “taking care of one’s own” that were integrated into the daily life of every American demographic group.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
The Institutionalization of Community Philanthropy
This period witnessed the formalization of early giving practices and the creation of many of today’s key institutional structures, such as community foundations, giving federations, and United Ways.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
The Democratization of Community Philanthropy
After the Great Depression and World War II, organized community philanthropy spread and diversified into new communities and populations.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
The Age of Commercial Charity
This period included the explosive growth of community philanthropy organizations in the 1990s and the entrance of commercial charitable gift funds into the philanthropic arena.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
The Next Era
What will the next era look like?
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
A large provider of data management services for foundations begins to use its enormous database to directly connect donors to nonprofits, effectively “disintermediating” community foundations?
What if…A national partnership between community foundations and back-office technology providers allows community foundations to work together as a seamless network of connected community offices?
Changes in tax regulations and giving patterns force the consolidation of community foundations, United Ways, and other identity-based funds as a way to streamline overhead costs?
Community philanthropy organizations began to cross traditional borders and boundaries to work together on a pressing regional or national issue?
Lessons from the Future:
What Could the New Era Bring?
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Strategic Implications for Community Foundations
The best efforts of previous generations have left us with an incredible legacy to build upon, and the community philanthropy that we know today will not disappear.
But many of the original assumptions that guided the early community foundations no longer necessarily fit today’s operating environment.
The mindset that guided the field to this point will need to be replaced with a new set of principles and priorities.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Community foundations must move beyond the important emphasis on operational efficiency of the last decade to a second order of change.
Every service and product community foundations offer is now available from other sources, or soon will be.
More than ever before, community foundations will need to use your community knowledge, relationships, and leadership to “walk the talk” of community benefit.
Principles for a New Era of Community Philanthropy
• A shift in focus from the institution to the community
• A shift from managing financial assets to long-term leadership
• A shift from competitive independence to coordinated impactBuilding an endowment is one important part of helping communities, but it is not the only measure of success. The endowment is a means to service, not the end in itself.
Just as important is permanence—the assurance of a strong, enduring commitment that will allow donors to feel secure that gifts given today will continue to serve the community for the long term.
Community foundations can now do this by choosing from a wide range of strategic roles in your communities. These roles are the “building blocks” of community philanthropy strategy in the future.
Success on the ground in communities and successful competition for donors will require a fundamental shift from a mindset of independent value to one of coordinated impact.
In many cases you will need to structure yourselves to work in real partnership with other community philanthropy organizations and to piggyback, rather than fight, commercial innovation.
In other cases, mergers and consolidation may be necessary to reduce operational expenses.
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
What this means in [Your community name]
• [Your content here]
• [Your content here]
• [Your content here]
Rapid and Significant
Slow andIncremental
Degree of change in our community over the next decade?
Assessment Scales
• What types of changes do we expect?
• How well positioned are we to respond to these changes?
• What implications do the changes have for our organization and the services we provide?
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
How well do our people and programs reflect our changing community?
Assessment Scales
• How well do our staff and board reflect our community?
• How well do our programs address the varied needs of different parts of our community?
• What level of cultural competence does our organization have for working with various population groups in our area?
Not as well as they should
Very well
Prettywell
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Rarely Often
How often does our foundation take leadership on local issues?
Assessment Scales
• What are the issues where we have been a successful community leader?
• What was it that made those efforts successful?
• Are there issues where we act as a complementary partner or “follower” of others?
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
What type of capital does our foundation provide to the community?
Assessment Scales
• What types of non-financial assets (skills, capacities, influence) do we bring to bear on local issues?
• How do others in the community view our contributions?
• How do we finance our leadership activities?
Social capital and leadership as important as money
Entirelyfinancial
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Degree of collaboration
Assessment Scales
• What are examples of the collaborative work that we have done?
• What characterized our successful collaborations?
• What types of organizations have we partnered with? How was power shared?
Nearly always work with other organizations
Primarilywork
alone
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Are we providing distinctive value to our community?
Assessment Scales
• How are we distinctive?
• How do we know?
• What would others say? For example, the head of the local United Way? Local politicians? Community members?
No YesSometimes
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Very little A fair amount A lot
How much does our community foundation need to change in the next 10 years?
Appetite for Change
1 2 3 4 5 6 7 8 9 100
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
© Blueprint Research & Design, Inc. and Monitor Company Group, LLP
Questions for Discussion
• What should we hold on to?
• What do we need to let go of?
• What do we need to learn?
For more information, visit:
www.communityphilanthropy.org
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