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On the Brink of New Promise
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Page 1Blueprint Research & Design, Inc. and the Monitor Institute, a member of Monitor Group
On the Brink of New Promise
THE FUTURE OF U.S. COMMUNITY FOUNDATIONS
By Lucy Bernholz, Katherine Fulton, and Gabriel Kasper
Page 2Created with funding support from theCharles Stewart Mott Foundation and the Ford
Foundation
© Copyright 2005 Blueprint Research & Design, Inc. and Monitor Company Group, LLP.
Weencourage readers to use and share the contents of this report, with the understanding thatit is the
intellectual property of Blueprint Research & Design and the Monitor Group, andthat full
attribution is required.
Page 3We recommend this report to communityfoundation staff, boards of directors,volunteer
committee members, and donors.
William S. WhiteSusan Berresford
President & CEO, Charles Stewart Mott FoundationPresident & CEO, Ford Foundation
Elan Garonzik Linetta Gilbert
Program Officer, Charles Stewart Mott Foundation Program Officer, Ford Foundation
S
An invitation from theCharles Stewart Mott and Ford foundations
Our two foundations have been privileged to have worked with community foundations across the
UnitedStates over the past quarter century.
For both of us, this is an area of philanthropy we care
about deeply.The Charles Stewart Mott and Ford foundations work at national and indeed
international levels. Yet weboth know how valuable it is for large private foundations to have strong,
dynamic community founda-tions as partners working at the local level. This is why we embraced
the opportunity to look deep into thefuture of the field through the expert eyes of Lucy Bernholz,
Katherine Fulton, and Gabriel Kasper.Over those years, Mott and Ford have made grants to
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community foundations to build general andadministrative endowments, to provide peer-to-peer
learning opportunities and technical assistance, andto strengthen programming expertise in areas
such a
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s low-income neighborhoods, the
environment, andminority communities. We have also assisted the field to develop abroad,and we
have helped build the infrastructure for community foundationsacross the nation.What we and
American society have gotten back has been immeasur-able. Community foundations are important
funding partners at the local, sometimes even the neigh-borhood, level. Where it may be difficult
for a large foundation to make a small grant to a grassrootsorganization, community foundations
can do that, and then share their knowledge. They allow countlessdonors, large and small, to
express their charitable impulses and to give back to their local communities.Across the nation, they
have become powerful, robust community assets to address local challenges withcourage and
leadership.In today’s world, the pace of change is highly accelerated, and the number of
community philanthropicorganizations has grown dramatically. That is why we asked the authors
to explore the future of the field.In the following pages they offer a compelling vision of trends that
will affect community foundationsand local philanthropy, such as globalization, changing
demographics, a shifting regulatory environment,and the commercial sector’s interest in
philanthropy. We recommend this report to community foundation staff, boards of directors,
volunteer committeemembers, and donors.
It should help them understand the changing world. It
will also help them en-vision how to continue to build this valuable philanthropic asset, and how to
use that asset for theircommunity’s best advantage, today and into the future.
Page 4ON THE WEB: Tools for building your future
This document contains the synthesis of our findings, and is designed for the leaders of U.S.
communityfoundations, both senior staff and board members. A companion discussion guide and
other
resources
will
beavailable
http://www.downhi.com/doc/jgeK0xvj0z9K.html
at
ropy.org to
www.communityphilanth
help
individual
community
foundations apply the lessons ofthis document to the specific circumstances of their communities
and organizations.
U.S. community foundations have entered apivotal new era. The generation ahead, from 2005to
2025, will be marked by dynamic change with-in and around community philanthropy.
Everyindividual community foundation—and the fieldas a whole—will face new choices. The
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path aheadis full of promise. Unfortunately, that promise willnot be easily realized.These are bold
claims, and we make them only aftera process of discovery, analysis, and iteration that hasinvolved
more than 300 philanthropic leaders sincethe spring of 2004. The impetus for the research
camefrom the Charles Stewart Mott and Ford foundations,who asked us to provide U.S. community
foundationswith some advance warning about the world to come.The study looks not just at
community foundations, butat the entire field of community philanthropy, whichwe define as the
practice
of
catalyzing
and
raising re-sources
from
a
community on
behalf
of
a
community.“Community― itself is defined in a number of differ-ent ways, including affinity
across geography, issues,and identity. Within this, community foundations aresimply one form of
community philanthropy, in whichthe community is defined in terms of geography. Asgeography
has slowly become just one of many waysthat people identify their communities, it becomes
Introduction
The growth and adaptation ofcommunity philanthropy in the U.S.has unfolded in fits and starts. A
scanof history reveals an inspiring andinstructive story of adaptationand growth.
Learning from the past
PAGE 1
Growing competition and diversificationwithin the field have created a verydifferent operating
environment forcommunity foundations, and have led tothe breakdown of many of the
foundingassumptions of the organizations.
Today’s
la
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ndscape
forcommunity
foundations
PAGE 11
Overview
Page 5increasingly important to understand communityfoundations as inseparable from this broader
whole.In the past decade, the new complexity and competi-tion facing community foundations has
led the U.S.field to look inward to the mechanics of philanthropy—areas where organizations can
assert control—anunderstandable, and necessary, first-order reactionto external forces. This new
moment clearly callsfor the opposite—for looking outward and forward,for embracing the new
possibilities and makingcalculated gambles.Not all of today’s institutions will survive. Some
willsurvive and even grow, even as they become less rel-evant to the changing needs of their
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communities.Others will adapt and thrive in every sense, for bring-ing people and resources
together to address the social,educational, economic, environmental, and culturalchallenges of the
country’s places is an inspiring mis-sion. Indeed, leading our communities toward greatercivic
resilience and building trusted global connec-tions are among the compelling opportunities of
thegeneration ahead.What’s clear is that in the coming years, communityfoundations will face a
far greater challenge than theyhave in the past to define and act on their distinctivevalue to their
communities. The good news is that thisnext era is ripe with opportunities. Our purpose is tohelp
you seize them.
A combination of inescapableexternal forces—economic pressures,demographic changes,
shiftingexpectations for regulation andaccountability, the emergence of thecommercial sector as an
innovator, andchanging relationships between thesectors—is leading communityphilanthropy
toward something new.
The emergenceof the next era
PAGE 15
Community foundations haveidentified many of their currentchallenges, but the future also holds
dimensions that we cannot nowpredict. Sc
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enarios help shed lighton how today’s choices might shapetomorrow, and allow us to
imaginedifferent, yet plausible, futures thatcould emerge.
The future is now forcommunity foundations
PAGE 23
Individual community foundationsand the field as a whole will needcreative and courageous
leadership tothrive in the era ahead. Much of themindset that has guided the field tothis point needs
to be replaced witha new set of assumptions aboutpriorities, operations, and thedefinition of
success.
Lessons from the future
PAGE 35
Page 66 ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
The growth and adaptation of community philanthropyin the U.S. has unfolded in fits and starts. A
scan ofhistory reveals an inspiring and instructive story ofadaptation and growth.
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Page 7Learning from the past 1
Learning from the past
To understand the prospects for community philanthropy—and therefore forcommunity
foundations—we first have to understand the field’s context andevolution. A scan of key
changes, primarily in the United States, reveals aninspiring and instructive history.The growth and
adaptation of community philanthropy in the United Stateshas unfolded in fits and starts.
Nevertheless, in scanning the past, we foundseveral formative periods, each marked by notable
growth in community phi-lanthropy, changes in the organizational forms and structures, and new
rolesfor both established and emerging structures. Our scan is illustrative, not ex-haustive, drawing
from those fields within community philanthropy that havethe most accessible documentary history.
Most ofour conclusions are drawn from data on Americancommunity foundations, as there is
considerablymore data on these structures than on others. Butwe believe that our findings are
broadly relevant to all forms of communityphilanthropy. Closer historical analyses of women’s
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funds,
mutual
aid
societies,hometown
associations, or faith-based giving communities will each reveal itsown important storylines as
well.A quick tour of history is important for two reasons. First, it highlights theinherent adaptability
of community philanthropy to challenging new circum-stances and provides us with an evolutionary
understanding of the roles andpotential for these organizations. Second, we find in this historical
scan mo-ments in time quite similar to the one in which we find ourselves today. We cansee how
community philanthropy adapted to earlier eras marked by large-scaleshifts in economics,
demographics, regulatory structures, and social attitudesabout the roles of public and private
institutions. The debates taking place
The debates taking place today should be understoodas part of a long evolution—not as a blip in
time,unrelated to what has come before or after.
Page 8ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
2
today should be understood as part of a long evolu-tion—not as a blip in time, unrelated to what
hascome before or after.One key indicator in each era is the growth ofcommunity foundations. The
first U.S. communityfoundation was founded in 1914. The ebbs and flowsof community foundation
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growth since then aretelling markers, though by no means completeindicators, of the punctuated
growth in communityphilanthropy over the course of the last century.Figure 1 presents a snapshot
of U.S. community foun-dation growth from 1914 to 2005, along with theperiods we see in
community philanthropy history.By using community foundation creation as a proxy,the preceding
century reveals four loosely definedperiods: the era prior to 1900; 1900 to 1929, whenthe Great
Depression hit and reshaped the Ameri-can economy, politics, and society; a post-Warboom era
running
until
1990;
and
the
more
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recentexplosive
growth
of
the
199
0s. Each of these erasis detailed on the
following pages, with an em-phasis on the commonalties in their economic andsocio-political
characters and how those influencedcommunity philanthropy.
Figure
1:
The
evolution
of
community
philanthropy
in
the
United
States190019051910191519201925193019351940194519501955196019651970197519801985199
019952000200520181614121086420Before
1900:Early
communityphilanthropy1900-1929:The
institutionalization ofcommunity philanthropy GreatDepressionand World War II1950-1990:The
democratization ofcommunity philanthropy 1991-2005:The age ofcommercialcharity 2005-?:The
nexteraNumber of U.S. Community FoundationsEstablished Per Year
Source: Sample of 337 Community Foundations;Foundation Center Data, Monitor Institute
Analysis
Page 93
Learning from the past
EARLY COMMUNITY PHILANTHROPY:BEFORE 1900
American community philanthropy is a collageof many diverse traditions of giving. In
NativeAmerican communities, notions of sharing, honor,exchange, and mutual responsibility were
alreadyembedded in many rituals, ceremonies, spiritualevents, and tribal activities even before
Europeansbegan to arrive in the country. Similarly, Catholics,Protestants, Jews, Muslims, Asians,
Latinos, AfricanAmericans, and others transplanted and adaptedthe customs of giving and sharing
from each oftheir cultures.The last half of the nineteenth century saw theAmerican republic fracture
and then rebuild itself.Mid-century was marked by the discovery of newwealth in the American
West and, 50 years later,the country experienced an even broader economicshift from agriculture to
industry. Finally, the pe-riod was marked by massive migration that broughttens of millions of
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people across the Atlantic Oceanfor a new beginning in the United States.Each of these factors
shifted
the
notion
andlocation
of
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communities in the U.S. and abroad. Inmany ways, these shifts served to strengthen prac-tices of
community philanthropy—of “taking careof one’s own”—that have long been based in
thedaily practices of community life itself. In boomingAmerican cities, immigrant communities
organizedin pockets locally to help and support one anotherand to preserve their distinct cultural
identities.Enclaves of Irish residents helped new Irish im-migrants. Italians supported other Italians,
bothnew arrivals and those back home. Jews aided Jews.Community philanthropy was simply a part
of theway groups of people lived; it was informal and in-tegrated into daily life, just as it long had
been forAfrican Americans, Latinos, and other racial andethnic communities.By the late 1800s,
these unstructured activitieswere beginning to develop into more organized,charitable bodies to help
local populations care formembers of their communities. Much of this newinstitutional philanthropy
was organized around re-ligious and ethnic identity. Lutherans and Jews weretwo of the first groups
to formally organize theirgiving and distinguish between religious activitiesand community services.
Mexicans in the Ameri-can southwest organized mutualistas as early as the1880s, helping newly
arrived Mexican immigrantsadjust to life in the United States. In the AfricanAmerican community,
black churches, fraternal or-ganizations, and Freedmen’s Aid Societies providedrelief and
assistance to newly emancipated slaves.
Community philanthropy was simply a part of theway groups of people lived; it was informal
andintegrated into daily life.
Page 10ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
4
This was a period of powerful, and subtle, commu-nity philanthropy. Institutions were secondary
tothe shared identity and commitment within groups.Communities, both geographic and
identity-based,were
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largely responsible for
meeting their ownneeds, as government services were only just be-ginning to grow beyond
elementary schooling andpublic safety services.
THE INSTITUTIONALIZATION OFCOMMUNITY PHILANTHROPY: 1900-1929
As the twentieth century dawned, the economicand demographic forces at work on
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Americancommunities only intensified. Great fortunes weremade in steel, oil, and finance. Southern
blacksflocked to northern cities; Eastern European im-migrants rewrote entire neighborhoods in
Greekand Cyrillic alphabets; and brand new systems ofpublic transportation and private motor cars
put theentire country on the move. The greatest fortuneslived only blocks from the depths of
poverty. FromSan Francisco’s geology to Chicago’s meat packingplants, every force from
city-leveling earthquakesto muckraking journalism to podium-stompingpoliticians would shine its
light on the profounddisparities between rich and poor.These disparities and the varied attempts to
redressthem radically transformed American expecta-tions for the public sector, private enterprise,
andcommunity organizations. As Carnegies, Morgans,and Rockefellers amassed unprecedented
fortunes,they created new institutions to hold them. Theprivate foundation structure was developed,
as wellas other vehicles for community giving, includinggiving federations and “community
chests,― earlyprecursors to the United Way.In 1914, a Cleveland banker named Frederick
Goffcreated the first U.S. community foundation, TheCleveland Foundation, as a way to collect
manycharitable trusts under unified management and al-low a select group of local leaders to ensure
thatthe funds’ charitable directives would be served overtime and under changing local
circumstances.1 Hethen took his “Cleveland Plan― around the country,and in 1915 alone,
eight new community founda-tions were created.Coinciding with this activity in communities was
aseism
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ic shift in the public’s expectations
for its gov-ernment bodies. This period gave birth to modernpublic health systems, social work,
public libraries,and high schools. Some of these new public insti-tutions were catalyzed initially
with philanthropicsupport. With the passage of the first federal in-come tax, the Congress codified
tax structures thatwould shape government services and institutionalphilanthropy to the present day.
THE DEMOCRATIZATION OF COMMUNITYPHILANTHROPY: 1950-1990
Following the Second World War, American commu-nities returned to the work they had left off
before theGreat Depression. The decade immediately following
As Carnegies, Morgans, and Rockefellers amassedunprecedented fortunes, they created new
institutionsto hold them.
Page 115
Learning from the past
V-J Day saw birth rates grow and economic prospectsfor many turn positive. Even such far off
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dreams ashome ownership and a college education came with-in reach of millions though public
support for GIbenefits. Union membership made middle-class livespossible for millions, and New
Deal promises such asSocial Security let people dream of retirement.These gains were not universal,
however. Race,ethnicity, gender, and immigration status stillmarked clear divisions in American
society afterthe Second World War. Where it had been neces-sary to build whole new institutions in
the priorera, the fight now was to provide broad access tothe rights embodied by those institutions.
The civilrights battles for educational opportunity, accessto the ballot box, and fair pay marked this
40-yearperiod. In general, these efforts were pitched alongtwo strategic lines: democratizing
existing institu-tions and building ethnically specific organizationsthat gave communities ownership
and control.For example, in schools the required shift was foraccess and opportunity. When it came
to commu-nity phi
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lanthropy, however, the
emphasis turnedto building institutions for self-help. For reasonsof both exclusion and
self-identification, manyAfrican Americans, Hispanics, Asian Americans,Native Americans, women,
gays and lesbians, andactivists from the environmental or social justicemovements often chose to
create their own philan-thropic institutions rather than fight for inclusionin those that existed. This
led to the formation ofdozens of women’s, Latino, progressive, and otheralternative
funds.Within community foundations, the democratiza-tion of giving was bolstered in the
mid-1970s whennational regulatory changes established the “publicsupport test,― which
required community founda-tions to demonstrate that they received at leastone-third of their support
from the general pub-lic, in effect launching the widespread practice ofdonor development.This era
also saw the spread of philanthropicinstitutions beyond their original urban centers.Community
foundations, once the purview oflarge cities, spread across the country through the1970s and 1980s,
often aided by support from largeprivate foundations.2The tax changes passed in1969 and enacted
by the mid-1970s temporarilyslowed new philanthropic formation, but within adecade the rate of
new institutional creation was
Many African Americans, Hispanics, AsianAmericans, Native Americans, gays and lesbians,women,
and others chose to create their ownphilanthropic institutions for self-help.
Page 12ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
6
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once again on the rise. By the end of the period,three states in the Midwest—Michigan, Ohio,
andIndiana—would account for more than one-thirdof the nation’s community foundations.
THE AGE OF COMMERCIAL CHARITY:1991-2005
By 1990, the American philanthropic landscape wasbroadly dispersed, diverse in function and form,
butuniform in that almost
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all philanthropic
institutionswere securely situated within the nonprofit sphere.This all changed in 1991 with the
advent of the Fi-delity Charitable Gift Fund, a shot across the bowof endowed philanthropic entities.
With that singleproduct launch, the commercial financial servicesfirms that had played a supporting
role to nonprofitphilanthropy for generations showed that theywere ready to sell “direct to the
customer.― Othercommercial enterprises quickly followed suit. Dur-ing this period, community
foundations also grewtremendously in both number and assets. Withina single decade the
commercial financial servicessector established itself as a major purveyor of phil-anthropic
products, and community foundationsfound themselves focusing anew on organizationalefficiencies
and alternative streams of revenue.The interest in philanthropy was, of course, a natu-ral outgrowth
of the search for new products andservices to the wealthy—a group growing rapidlyin number
because of the long bull stock market,the growth of the mutual fund industry, large-scale
generational wealth transfers, and the boomin technology stocks. That wealth created not onlymore
philanthropy but the sudden realization thatphilanthropy was a business and potentially a prof-itable
market or product extension for financialservices firms.The nonprofit sector of philanthropy
respondedto the entrance of commercial firms by gettingorganized. Together, community
foundations cre-ated Community Foundations of America andthe Community Foundations
Leadership Teamof the Council on Foundations; regional associa-tions of grantmakers in Michigan,
Wisconsin, andelsewhere began to work to strengthen communityfoundations in their territories.
These groups spentsignificant resources to improve their members’ op-erating practices in order
to compete in a world inwhich access to information is instant and consum-ers hold the power of
cho
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ice.Commercial funds, motivated to
maintain customerrelations and portfolio assets, extended and acceler-ated the field’s use of
asset size as a proxy measure ofsuccess. Where growth mattered explicitly and for
3000250020001500100050001993
1994
1995
1996
2003 200435000300002500020000150001000050000
1997
1998
1999 2000 2001 2002
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AssetsGiving Accounts
Assets ($, MM)Giving Accounts (#)Figure 2: Fidelity: Growth in assets and giving accounts
Source: Fidelity Annual Report, 2004
Page 137
Learning from the past
obvious business reasons to the commercial play-ers, in the past 15 years it has become a measure
ofmeaning for most community foundations as well.It was the more fundamental shift in the
powerof the consumer, however, that truly transformedphilanthropy in this period. Unleashed by
theInternet, the combined force of consumers’ access toinformation and new business models
that bypassintermediaries reshaped industries as diverse as autosales, journalism, financial services,
music, movies,and publishing.3 This force has only just begun tohit philanthropy and the broader
nonprofit sector.Online giving raised an estimated $2 billion in2003, up more than 60 percent from
2002,4withenormous potential for even more growth. Despitethe tremendous response in the wake
of the South-east Asia tsunami (where online giving alone raisedover $350 million for relief
efforts)5, still just 13percent of Internet users report having ever givento charity online.6This age of
commercial charity has led us to ourcurrent circumstances, and to the brink of a new erafor
community philanthropy.
Page 148 ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
Growing competition and diversification within thefield have created a very different
operatingenvironment for community foundations, and haveled to the breakdown of ma
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ny of the foundingassumptions of the
organizations.
Page 159
Today’s landscape forcommunity foundations:
Today’s landscape for community foundations: An assault on old assumptions
The cumulative changes both inside and outside philanthropy have created achallenging new
landscape for community foundations that is remarkably dif-ferent from a generation ago. If the last
era forced community foundations toimprove themselves operationally, the coming decades will
challenge them todefine and distinguish themselves strategically.Before looking at the forces that
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are creating the next era of adaptation, itis worth pausing to take a closer look at community
foundations’ presentoperating environment—the growing competition, the diversity within
thecommunity foundation field, and the breakdown of many of the fundamentalassumptions that
once guided community foundations.
THE NEW COMPETITION
The most striking aspect of the new environment is the diversity of competi-tive forces that have
emerged. Regardless of where you reside, chances are goodthat your community is now served by
several kinds of philanthropy organiza-tions besides the local community foundation. The next two
pages highlightthe changing landscape in which community foundations are operating—firstlisting
many of the types of philanthropy organizations now found in com-munities, and then, in Figure 3,
picturing the other competitive forces at workin the field.
If the last era forced community foundations to improve themselvesoperationally, the coming
decades will challenge them to define anddistinguish themselves strategically.
An assault on old assumptions
Page 16ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
10
The landscape of communityphilanthropy today
Community philanthropy is as old as human civilization. Bornfrom innate human desires to care
http://www.downhi.com/doc/jgeK0xvj0z9K.html for our neighbors and improveour surroundings,
groups of people have long expressed theirmutual responsibility through aid societies, faith groups,
funeralsocieties, loan funds, and community funds in virtually every placeand every culture.Over
the last century, the long-standing functions of communityphilanthropy—mutual assistance and
shared responsibility—havenot changed. However, the number and types of institutions
thatprovide these functions and the scale of the resources involved havegrown exponentially.
Community philanthropy organizations nownumber in the thousands, manage billions of dollars,
and regularlyact in the public eye and on the public’s behalf. Below is a selectsnapshot of some
of the most prominent of today’s players.COMMUNITY FOUNDATIONS. More than 46
countries arenow home to 1,175 community foundations.7 The growth ofthese organizations has
been unprecedented, with the UnitedStates itself experiencing almost 300 percent growth over
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twodecades, from the 250 community foundations that existed in1985 to approximately 750 today.8
These organizations controlmore than $30 billion, and range in size from a few thousanddollars to
almost $2 billion in assets.9UNITED WAYS. There are more than 1,400 United Waychapters in the
U.S. Focused primarily on workplace giving, theygenerated more than $4 billion in revenues in
2003-2004.10United Ways and other workplace giving funds can be found inmany parts of the
world.FEDERATED GIVING. Hundreds of Jewish, Lutheran, and otherfederated charities exist in
the United States and abroad. Theyare a mix of multimillion dollar endowments and annual
givingcampaigns, small entities focused on single cities, complexinternational organizations that
aggregate many small gifts intosignificant global revenue streams. North America is home tomore
than 150 Jewish federations with assets of more than$7.9 billion.11IDENTITY-BASED FOCUS
FUNDS. The exact
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number of fundsthat
serve communities defined by race, ethnicity, gender, reli-gion, and other identity-based distinctions
is not known, but isat least several hundred. There are more than 100 institutionalmembers of the
Women’s Funding Network and more than 50funds for Native Americans. Similar funds exist
for AsianAmerican, African American, and Hispanic communities; gayand lesbian populations; and
most
religious
denominations.12ALTERNATIVE
AND
COMMUNITY-BASED
PUBLIC
FOUNDA-TIONS. A 2004 National Committee on Responsive Philanthropyreport identified 192
community-based public foundations in theU.S. These include identity-based funds, funds for
communitiesgalvanized by common political beliefs, and issue-specific fundsdedicated to education,
health, and other issues.13GIVING CIRCLES. A 2004 survey found 220 U.S. givingcircles—more
or less formally organized groups of individualdonors who come together to learn and give
collectively—andestimated that the actual number of circles is many hundredhigher.14 Social
Venture Partners, one form of giving circle, haschapters in more than 20 U.S. cities and is helping
chaptersdevelop in Europe, Canada, and Mexico.15HOMETOWN ASSOCIATIONS AND OTHER
REMITTANCEGIVING. Immigrant groups have always sent money home, andin recent years this
giving has been aided by formal organiza-tions. In 2003, for example, more than 600 Mexican
HometownAssociations (HTAs) contributed to the flow of funds fromMexicans in the U.S. back
home. The total given exceeded $13billion.16 These associations pool many small gifts from
donorsto provide substantial aid to their towns and communities.HEALTHCARE CONVERSION
FOUNDATIONS. More than 165new foundations have formed in the last two decades as hospi-tals,
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health plans, or health systems have converted their statusfrom nonprofit to commercial.17 As a
result,
new
entities
dedi-cated
to
community
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health
were
born,
many
of
which
operateas public grantmaking charities. Almost
all of these are requiredto involve target populations in their work, creating new formsof
community accountability mechanisms.COMMERCIAL CHARITABLE GIFT FUNDS. Fidelity
Invest-ments launched a new age of philanthropy in 1991 with theintroduction of its Charitable Gift
Fund. Since its inception, theFidelity fund has brought in more than $3 billion in assets18
andattracted a multitude of similar products from Fidelity’s com-petitors. In 2004 alone, the 23
commercial gift funds surveyedby Bloomberg Wealth Manager magazine saw their assets rise
27percent to $5.1 billion.19Some of these institutional forms were nurtured within com-munity
foundations themselves. Others were created becausespecific communities felt excluded from
community foundationsor as intentional competition to them. In a sense, community foun-dations
have helped create many parts of the crowd in which theynow find themselves.
Page 17Today’s landscape for community foundations: An assault on old assumptions 11
Commercial PlayersWithin CommunityPhilanthropy
Competition among com-munity foundations, UnitedWays, identity-based funds,and other vehicles
for com-munity-based giving
SubstituteProducts and ServicesSuppliers,Distributors,VendorsNonprofits
Professional services firms areincorporating philanthropic advice aspart of a suite of services they
offer torelationship clients, and technologyvendors like Kintera and FoundationSource are building
(and buying)powerful databases that track donorand nonprofit data that couldpotentially bypass
communityphilanthropy organizations altogetherImproved technology andconnectivity allow
donors to linkdirectly with the nonprofitsWinklevoss Consulting is now attempting topatent Donor
Managed Investment Fundsthat allow donors to directly manage theinvestment of their
contributions aftermaking a tax-d
http://www.downhi.com/doc/jgeK0xvj0z9K.html
eductible
gift, and DynastyTrusts now allow family trusts to exist inperpetuity; in the few years since
DynastyTrusts were developed, $100 billion in familyassets have been moved into the
trustsCompetition from low-cost/high-volume providers from thecommercial sector, such asFidelity,
Vanguard, and Schwab,as well as high-end wealthmanagement advisers andfamily offices
Figure 3: Today’s competitive environment for community foundationsThe increasingly
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crowded nature of the field prompts new questions about the relationship betweencommunity
foundations and the rest of community philanthropy. What does real cooperation acrosscommunity
philanthropy look like? How do innovations that come from outside the field, such asDonor
Managed Investment Funds and Dynasty Trusts, affect community foundations? What
arecommunity foundations best positioned to create, and how can they catalyze the necessary
innova-tion? How can community philanthropy accelerate its work by capitalizing on commercial
investmentin new products? What must community foundations do to remain necessary partners as
donors andnonprofits become ever more able to access and assess each other directly?
*Based on Michael Porter’s Five Forces Analysis
Page 18ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
12
DIVERSITY WITHIN THE FIELD
As community foundations have responded andadapted to their communities’ needs and to
newplayers and new forces, the field has grown dramati-cally more diverse. Today, a community
foundationin the U.S. can be:• Located in a rural, agricultural area, withassets of less than $2
million, with a workingboard that cooperates with local governmentto plan, and in some cases
operate, majorinfrastructures projects, among many otherthings needed by its community.•
Located in a large metropolitan area, manag-ing more than $850 million in assets in morethan
http://www.downhi.com/doc/jgeK0xvj0z9K.html
1,500 funds, making annual grants in
atraditional philanthropic style of almost $75million a year.• Located not in a local community,
but insteadin a state, serving as an umbrella organizationfor more than $100 million in assets
spreadacross regionally distributed offices that makegrants from more than 130 funds advised
bylocal councils.Although they look very different, each of these isstill a community foundation,
which raises a ques-tion: What do community foundations really have incommon, and how do they
differentiate themselvesfrom others working on behalf of communities?
ORIGINAL PRINCIPLES—AND HOW THEY’VEBEEN CHALLENGED
Many of the original assumptions that guided theearly community foundations—and continue
toinfluence the DNA that forms community founda-tions’ core identity today—no longer
necessarily fittoday’s operating environment.A close look at history indicates that the
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followingfive key principles once guided the first communityfoundations. For each, we have noted
how chang-ing circumstances have now altered the relevance ormeaning of that principle.1) The
money comes from within a communityand goes to that community—which is defined byplace.
This principle was rooted in the importanceof geographic communities in a time when
long-distance travel and communication were expensive,time consuming, and often very difficult.
But today, with advances in technologyand transportation, individuals are nolonger as bound to a
single place as theyonce were, even as place remains central.People now identify in many new
ways—by race, ethnicity, gender, religion—andthrough the course of their lives they maydevelop
deep relationships with severalplaces. They emphasize some elements of
Assets ($, MM)Figure 4: Community foundations sorted by asset size, 2003
Source:
The Columbus Foundation, Community Foundation Survey 2003; sample n=645
$1,900$1,800$1,70
http://www.downhi.com/doc/jgeK0xvj0z9K.html
0$1,600$1,500$1,400$1,300$1,200$1,100$1,000$900$800$700$600$500$400$300$200$100$0
Only 70 communityfoundations hadassets over $100million
Number ofCommunityFoundationsPercent of All U.S.CommunityFoundation AssetsTop 1029%Top
2045%Top 3056%Top 4063%Top 5069%
Page 19Today’s landscape for community foundations: An assault on old assumptions 13
their identity more than others at various times intheir lives, and want multiple, meaningful
connec-tions to all relevant communities.
2) Community foundations do multipurpose,non-sectarian giving. Individuals and communi-ties in
the first part of the twentieth century weretightly connected to houses of worship that man-aged
their own fundraising. Non-sectarian groupsand community issues needed alternative struc-tures of
support.
Since then, entire systems of social services, arts,health providers, and educational options
havedeveloped outside of sectarian worship, and vastpublic programs have been built, redesigned,
anddevolved that address community needs.
3) The purpose is to build a permanent non-profit institution that both honors donor intentand
flexibly
responds
to
community
needs
overthe
long
term.
Back
when
the
first
communityfoundations were established, many kinds ofinstitutions in the U.S. were being built to
serveas reliable, credible pillars of society. While fewmembers of society had estate resources,
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thosewho did had few ways beyond the promises offamily members to ensure that their
charitablegoals were carried out after death.
Today, there are many other visible alternativesfor long-term estate planning that did not exist
acentury ago, and the credibility of institutions ofall kinds has eroded. Furthermore, while giving
inperpetuity still has appeal for some donors,especially late in their lives, a new generation ofdonors
is just as interested in making an i
http://www.downhi.com/doc/jgeK0xvj0z9K.html
mpacttoday,
while they are alive.
4) Money comes from wealthy elites who alsodecide where it goes through governance power.This
principle would not have been questioned ina time when communities had clear social hierar-chies
and individuals and families with financialresources could expect to exercise influencewithout
being seen to do so, much less heldaccountable for how they did so.
Social hierarchies are not as stratified as they werea century ago, and many disenfranchised
commu-nities are now calling for greater control over theirown direction.
5) Community foundations serve the communityby being a bank for philanthropic
transactions.Banks were once trusted financial institutions;there was a belief that the community
needed abank for social resources just as it had a bank forlocal business needs. The same
decision-makersoften led both organizations.
Today, banks and other financial institutions nolonger have the untarnished reputations they
didwhen community foundations came into being.Individuals are increasingly able to manage
theirassets on their own, without the intervention oftraditional intermediaries.
The slow erosion of the relevance of these princi-ples has made it increasingly difficult to
understandcommunity foundations as a unique field, distinctfrom the rest of community
philanthropy.But here’s the real kicker: The changes have onlyjust begun, as the next section
will demonstrate.
Page 2014 ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
A combination of inescapable external forces—economic pressures, demographic changes,
shiftingexpectations for regulation and accountability,the emergence of the commercial sector as
aninnovator,
and
changing
relationships
philanthropytoward something new.
between
thesectors—is
leading
community
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Page 2115
The emergence of the next era
The past eras sho
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w how philanthropic
institutions are shaped by economicpressures, demographic shifts, and the relationships between
communi-ties, commerce, and the public sector. The current changes in our economic,demographic,
and sectoral relationships are at least as profound as those ofearlier eras.Our research indicates that
a “fifth― formative period is now beginning. Thechanges coming in this period will challenge
the core assumptions aroundwhich community foundations have built their operations.We expect
that the coming period will evolve more rapidly than its prede-cessors, and that the rate of change
and required adaptation will continue toaccelerate in the future. Thus, the next two decades may
even see two cyclesof adaptation and reformation for communityphilanthropy, whereas previous
periods oftentook a generation or longer to fully play out.The community philanthropy that we
know to-day will not disappear, and its descendants willsurely resemble some of what is now
familiar. But like it or not, a combina-tion of inescapable changes will alter many fundamental
aspects of communityphilanthropy. Community philanthropy, our research shows, is heading
towardsomething new.It is worth taking a closer look at the forces that are shaping this new era.
The community philanthropy that we know today will notdisappear, and its descendants will surely
resemble someof what is now familiar. But like it or not, a combinationof inescapable changes will
alter many fundamentalaspects of community philanthropy.
The emergence of the next era
Page 22ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
16
ECONOMIC PRESSURES
The economic changes now underway ensure thatcommunities that have experienced profound
successin the past generations are by no means assured ofsuccess in the near or long-term future.
Wealth
willbe
created
in
places
http://www.downhi.com/doc/jgeK0xvj0z9K.html
and
in
ways
unfamiliar
to
us now;some communities will benefit while
others will fail.
The shift from the agricultural to the industrialage at the turn of the last century unleashed
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newfortunes, new poverty, new politics, and new glob-al relationships. Changes spawned by the
currentglobal transition from the industrial to the infor-mation age are already proving equally
profound.As the U.S. displaced Great Britain as the world’slargest economy a century ago,
China and India arenow predicted to eclipse the U.S. in less than twodecades. New global
telecommunications networksand skilled workers in these nations are shifting thelocus of all
manufacturing work from the WesternHemisphere to the East, while also rewriting
globalexpectations on where professional services such asaccounting, software development,
engineering, anddesign take place.20The economic upheaval of the last century was metwith great
institution building efforts and new de-mands for public services; current reformers arenow fighting
about the shape and scope of thosesame institutions and services. Americans are in themidst of a
major overhaul of social welfare programs,medical support for the elderly, and public retire-ment
plans, even as the country’s elderly become alarger percentage of the population than ever
be-fore. We are in the midst of a significant declinein the ratio of workers to retirees,21 and whole
in-dustries from airlines to auto makers are turning tothe public sector to meet their pension
obligations.The pitched political rhetoric and divisive nature ofthe U.S.’s first two twenty-first
century presiden-tial elections may only increase as the global wealthdisparity continues to grow
and the gap challengessocieties at local, state, national, regional, and inter-national levels.That there
will continue to be turbulence and eco-nomic upheaval is certain. That they will affectcommunity
philanthropy is also certain. Communi-t
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ies
have already seen significant shifts in leadershipas corporations have merged and moved out of
thecommunities that spawned them. The globalizingeconomy is likely to accelerate the mobility of
cor-porations and their jobs. Decisions about economicpolicy at the national and global levels, as
well as lo-cal experiences of gaining or losing jobs and industry,will determine community by
community whetherthe coming age is prosperous or embattled. This isthe context in which
community philanthropy willseek to define, and continually redefine, its niche.
Page 23The emergence of the next era 17
DEMOGRAPHIC CHANGES
In the next 50 years, the U.S. will grow bigger, older,and more diverse.22
The face of America in 2050 will be quite unlikewhat it was in the 1950s, or even 2000. It is
alreadychanging astonishingly quickly in some regions. Onthe whole, the nation is getting older and
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more di-verse, and the overall population of the country isexpected to increase by almost 50 percent
by 2050,much of the growth due to immigration. As theearly twentieth century saw great growth in
newimmigrants in a short quarter-century or so, thenext 25 years will also see large numbers of
newimmigrants. A baby boom within certain ethnicgroups is also underway. In fact, most of the
growthin the U.S. population in the next 50 years will beamong Hispanics and Asian
Americans.23The white population is growing at the slowest rateand makes up the largest
percentage of residentsover age 65. By 2030, the U.S. as a whole will “looklike Florida,― with
one in five people over age 65.24Aging populations put a different set of prioritiesbefore public
policy makers and may significantlyshift public resource flows from youth and educa-tion services
to elder care and medical support. Thebalance between workers (who are increasingly di-verse) and
retirees
(who
are
predominantly
white)will
be
unlike
any
http://www.downhi.com/doc/jgeK0xvj0z9K.html other point in American history.This has already
informed fairly dire predictionsabout tax revenue and the cost of public services;the cultural and
social implications (e.g., on mobil-ity, community concerns, safety, family structures)are subjects of
much speculation.Of special note to community foundations is howthe aging population will
influence estimates ofwealth transfer between generations. As lifespanincreases, medical and living
costs rise. Couplingthese new demands with uncertainties about every-thing from estate taxes to
public health and socialsecurity programs for the elderly adds up to a greatset of unknowns for
elderly residents, their families,and their communities.As the overall population grows,
communities (andcommunity philanthropy) will be influenced by mi-gration patterns within the
U.S., rural and urbandiscrepancies, and new or emerging populationcenters.25 The social dynamics
and politics of placeswill shift as new population majorities are estab-lished or emerge. Community
philanthropy facesthe increasing mobility of residents, more temporalor seasonal populations, and
an increasing percentageof donors who have the technological wherewithalto direct their giving
themselves as they move fromplace to place.
CHANGING EXPECTATIONS FOR REGULATIONAND ACCOUNTABILITY
Philanthropy in the next generation will operate underincreased regulatory and public scrutiny. It
also willbecome increasingly sensitive to changes in relatedsystems such as tax law, homeland
security, andintellectual property law.
Regulation in one form or another reared its headas a force in each of the previous eras of
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adaptivechange, first with the passage of the income tax,then with new tax regulations in 1969, and
againwhen the commercial gift funds were approved bythe IRS in the early 1990s. The nested
systems
ofregulation
that
guide
philanthropy
http://www.downhi.com/doc/jgeK0xvj0z9K.html
are
complex
andinvolve
tax
structur
es at multiple jurisdictional lev-els (state,
national, international) and can be shifted
Page 24ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
18
by new regulations on organizations (foundations)and/or individuals (the estate tax).The
combination of increased public awareness ofphilanthropy, fueled by national disasters (naturaland
manmade) and public oversight by legislatorsand regulators (from state attorneys general to theIRS
to Capitol Hill), sets the stage for an era ofcontinued regulatory proposals and revision.
Phi-lanthropy is also affected by changes to regulationsfrom other sectors, including intellectual
propertyand copyright law, homeland security, communica-tions, civil rights, immigration law, and
the
personaland
corporate
tax
codes.26Alongside
the
external
regulatory
activity,
organizedphilanthropy continues to implement efforts at self-monitoring. More than two-thirds of
U.S. communityfoundations have taken the first step toward compli-ance with national standards. In
addition, commonstewardship principles were developed and launchedfor corporate, independent,
and family foundations.All of this activity creates an important edge of un-certainty for community
philanthropy.
THE COMMERCIAL SECTOR AS INNOVATOR
By 2025, and perhaps much sooner, even philanthropictransactions with complex tax implications
will be aseasily processed as credit card or ATM transactions—and the need for help of the kind
that created commu-nity foundations in the first place will lessen. This doesnot mean help will not
be needed, but that help maychange in nature. As it does, community philanthropywill be nested
differently in the advisory universe.
Ever since the age of institution building,community philanthropy has been connected toseveral
allied industries, such as accounting, taxlaw, estate planning, investment advising, andfinancial
http://www.downhi.com/doc/jgeK0xvj0z9K.html
management. As institutions have grown,these
connections have tightened. Technology ven-dors that build software and hardware systems
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formanaging grants, investments, and entire charita-ble operations are the latest new player in this
mix.As each of these industries innovate, merge, anddevelop new services, they force the others to
do soas well, each exerting and responding to ebbs andflows in the others.The age of commercial
charity was driven in largepart by innovation within the financial servicesindustry. Much of
today’s dynamism is coming fromthe technology companies that provide softwaresystems and
platforms for managing grantmaking,investments, and foundation administration. Thesame
technological advances that forced down thecosts of transactions while raising the bar on report-ing
accuracy, speed, and access will soon introducederivative products that will challenge
communityphilanthropy’s dominance of knowledge and lever-age services as well.Each of the
technology vendors now selling grantsmanagement, donor-advised fund management,or foundation
administration platforms are creat-ing enormous proprietary databases on donor be-havior and
grants. Trend reports and aggregatedata analyses from these sources could ultimatelyreplace current
nonprofit industry data resourcessuch as the Urban Institute and Foundation Center.The commercial
sector prioritizes product developPage 25The emergence of the next era 19
ment and is motivated to innovate on informationdelivery, subscription models, syndication,
real-time reporting, and any other packaging of modelsthat proves profitable. Their independence,
built-inscalability, and customer focus give them animportant
advantage over individual and joint
ef-forts by community foundations. Given this, weanticipate that commercial vendors will
continueto be the source of much of the new product inno-vation in philanthropy.T
http://www.downhi.com/doc/jgeK0xvj0z9K.html
hese
shifts
follow
on
a
decade
that
significantlylowered the costs of conducting philanthropictransactions and gave the advantage to
mass pro-viders.27As a result, transactional efficiency hasshifted from being a distinguishing value
to beinga baseline standard that community philanthropyorganizations must meet. Community
founda-tions now seek to define themselves by broad-basedknowledge, social missions, the
potential to lever-age other donors, and the breadth of services theycan provide to
communities.These services are directly in the line of sight ofthe commercial sector. Commercial
innovationthreatens community philanthropy organiza-tions’ position as the premier provider of
servicesto match donor interests with community causesand its role in helping donors find peers and
lever-age their gifts. Specifically, it will put the tools forfinding partners or pooling funds,
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benchmarkingprogress, and aggregating information in the handsof consumers, at unbeatably low
prices,
and
with“always
on―
availability.Many
of
the
industries
that
have
traditionallypartnered with community philanthropy are alsochanging in significant ways. For
example, lawfirms are bringing in finance and philanthropy ex-perts and credit unions have
developed an interna-tional remittance network to compete with globalbanks. Family offices and
wealth management ad-visers are growing in number, services, and assetsunder management.28The
banking industry is of special note, as it is ahighly regulated and globally dynamic industry inwhich
changes can have an almost immediate in-fluence on philanthropy. Banking regulations in
theEuropean Union have already caused sea changesin community philanthropy organizations.
Finan-cial industry watchers are paying attention to theprovision of retail financial services by
Wal-Mart,the growth in international remittances facilitatedby global banks, the creation of new
financial
http://www.downhi.com/doc/jgeK0xvj0z9K.html
prod-ucts such as PayPal, and
increasing concerns aboutidentity theft and financial security.
Transactional efficiency has shifted from being adistinguishing value to being a baseline standard
thatcommunity philanthropy organizations must meet.
Page 26ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
20
We can expect all of these industries—banking,law, accounting, and finance—to continue
seekingopportunities to direct the flow of philanthropicassets, either by doing it themselves or
through cost-efficient relationships with other vendors (possiblycommunity philanthropy
organizations).
CHANGING
RELATIONSHIPS
BETWEENSECTORS
AND
NEW
EXPECTATIONS
FORPUBLIC PROBLEM-SOLVING
Ongoing structural shifts in government services andcorporate responsibility will require
philanthropy to con-tinually assess these relationships as it defines its role.
Each of the previous eras of community philan-thropy saw new norms emerge for the
expectationsof communities, the public sector, and private cor-porations. The age of
institutionalization coincidedwith broad new expectations for public systems, aswell as the creation
of permanently endowed, proudcommunity institutions dedicated to knowledge,health, and well
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being. After the Second WorldWar, whole classes of Americans joined the ranksof college-educated
homeowners by virtue of publicincentive programs. By the end of the last century,many of our
expectations for community benefithad shifted to corporate entities, as we dependedon jobs for
health insurance, sought corporate socialresponsibility in our stock portfolios, and turned tofinancial
services firms for philanthropic products.In line with this increasing reliance on corporategoodwill
has been a long-term reconsideration ofthe role of the government in American life. Slowbut steady
progress
has
been
made
in
shifting
http://www.downhi.com/doc/jgeK0xvj0z9K.html
fed-eral
programs
to
the
s
tates, and deregulation ofindustry has been a
primary element of almost everypresidential administration since Richard Nixon.The result for
community philanthropy is an un-certainty in its relationship to local governmentdecision makers
who have new responsibilitiesbut not the accompanying funding to fulfill them.The devolution of
funding and social services, newdemands for homeland security, and the extend-ed deployment of
National Guard troops haveincreased demands for local services without anyconcurrent growth in
local funding.As government and corporate roles and responsi-bilities have shifted, the nonprofit
community ben-efit sector has been exploding in size and diversity.More than 1.5 million
organizations that account
Individually and together, the roles and responsibilitiesfor community philanthropy, the public
sector, and privateenterprise are in flux.
Page 27The emergence of the next era 21
for 5 percent or more of U.S. gross domestic prod-uct make up the American nonprofit sector.29
Mostof the organizations are small, local entities, but thesector also includes large slices of the
healthcareindustry and the majority of higher education andreligious institutions. Within this broad
expanse canbe found 72,000 philanthropic foundations, nearly1,000 of which are classified as
public grantmakingcharities. The universe as a whole is large. In manyregions of the country it is so
densely packed thatthe differences between nonprofit organizations,community philanthropy groups,
and faith-basedsocial service providers are hard to articulate.This all adds up to a dynamic set of
changes withinphilanthropy and around it. Even as communityphilanthropy navigates the effects of
governmentdevolution on local social services or cultural enti-ties, it is also trying to attract
corporate partners.Individually and together, the roles and respon-sibilities for community phi
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lanthropy, the publicsector, and private
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enterprise are in flux, greatlymagnifying the intensity—and the potential—ofour current time.
Page 2822 ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
Community foundations have identified many of theircurrent challenges, but the future also
holdsdimensions that we cannot now predict. Scenarioshelp shed light on how today’s choices
might shapetomorrow, and allow us to imagine different, yetplausible, futures that could emerge.
Page 2923
The future is now for community foundations
It is not simply the presence of deep changes in separate realms that will forcecommunity
philanthropy to adapt. It is the ways in which these forces combineand compound one another that
mark true transition periods. This is why weconclude that:
• The combination of the new complex environment within philanthropyand the inescapable
forces around the field is already creating a new waveof adaptation in community philanthropy.•
The next generation is likely to create surprises as important as Fidelity’sentrance into the field
in the past generation.• In the coming years, community foundations will face a far
greaterchallenge than they have in the past to define and act on their distinctivevalue to their
communities.
In this section, we do two things to begin to make sense of how the futuremight evolve from the
choices being made today. First, we highlight a fewthemes that we believe will characterize the next
era. Then, we dive into keyaspects of the ways community foundations and other community
philanthro-py organizations might respond to the forces we have been outlining. We’ll dothis by
telling some brief stories of the future, looking back from 2025 at howtoday’s field might
change.
The future is now forcommunity foundations
Page 30ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
http://www.downhi.com/doc/jgeK0xvj0z9K.html FOUNDATIONS
24
At a high level, it is important to stress that we donot think that growth will be the defining
charac-teristic of the next era in community philanthropyas a whole and community foundations in
particular.By virtue of their endowed invested status and newwealth creation and transfer,
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philanthropic assets inthe United States will grow over time even if noth-ing more is done from now
on. But growth in assetscannot—and should not—be equated with success.It is an easy marker,
but not the most useful one. Asthe responsibilities and potential for philanthropyare recalibrated in
this coming era, the measure thatmatters will be impact, not asset size.Measuring impact is hard.
This is partly why assetsize has been so popular—it is an easy proxy. Thetask of measuring impact
is not going to get anyeasier. Indeed, it is likely to get harder, as invest-ments become more
complex and strategies involvemultiple partners. But doing the easy thing becausethe right thing is
too hard is no longer an option.Community foundations must find ways to helpgauge improvement,
if for no other reason than todistinguish themselves in the increasingly crowdedmarketplace of
choices.While those institutions that are already establishedand endowed are unlikely to disappear,
we expectthat U.S. community philanthropy will undergo aninitial fracturing in the coming years as
identity-based and other focused groups proliferate to servethe (often sizeable) interests of specific
communi-ties. The abundance of organizations serving somecommunities, however, may reward
consolidation,as the emphasis rightly returns to the functionof philanthropy, not its operational
structure. Atthe same time, philanthropists will begin to capi-talize on the power of the Internet, and
this willdrive all intermediary organizations to prove againand again the value they add that justifies
theiradditional cost.Another maj
http://www.downhi.com/doc/jgeK0xvj0z9K.html
or factor to
highlight is that whatwe are experiencing today is both deep, structuralchange within each of the
sectors—nonprofit andphilanthropic, commercial, and public—and rapidre-alignment in the
relationships between these sec-tors. In a time of such disruptive change, individualorganizations
must define their value within theirown sector and the sectors must calibrate their rolesin
relationship to one another. Only then will com-munities realize their promise.Here we can see the
real opportunity that has beencreated by the great distance community philan-thropy has already
traveled over the last century.Disparate local action was once the content andthe sum of the whole.
Now we have parallel, yetdisconnected silos of foundations, federations,identity-funds, giving
circles, and workplace givingefforts. Where we once had only a “bottom,― wenow have a
system with many “bottoms” and many“tops,” each operating only within its own
structur-al realm and with few if any positive connectionsacross the different forms.As community
philanthropy organizations of allkinds look to distinguish themselves from the crowd,one of the
obvious answers will be to join togetherin new combinations—because of the need for ef-ficiency
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and the need to create value in new ways
As the responsibilities and potential for philanthropyare recalculated in this coming era, the measure
thatmatters will be impact, not asset size.
Page 31The future is now for community foundations 25
caused by the shifting sectoral dynamics. Thereforewe believe the next era will be characterized not
justby consolidation, but also by the creation of manynew fluid and temporary networks that come
to-gether to meet common goals.The coming cycle of change will be dynamic andhave many
dimensions we cannot now predict. Ex-panded regulations may create opportunities for
newnonprofit
structures
or
http://www.downhi.com/doc/jgeK0xvj0z9K.html
even
more
commercial
i
nno-vation. The standards movement within
communityfoundations and similar efforts at self-regulation inother arenas of community
philanthropy can playout many ways. Alternatively, newly consolidatedor allied organizations may
unleash creative ways ofapplying resources across sectors, leading in turn toentirely new measures
of impact.As the universe of community philanthropy hasexpanded, the number and types of
networks havealso grown. Some of these are affiliation-based, de-cision-making bodies such as
United Way or Com-munity Foundations of America. Others, such asthe Philanthropy Roundtable,
are loose collectionsof organizations that share a political point of viewor a common belief in how
change happens. Stillothers, such as the Alliance for Charity Reform, arecreated by their funding
organizations to promotespecific regulatory or legislative agendas. The deci-sions made by and for
these alliances, and the or-ganizations that constitute them, will be factors inhow the future
unfolds.The scenarios that follow are designed to help shedlight on how choices made today within
the fieldof community philanthropy could shape the fieldtomorrow. Scenarios are invented stories
that help
Standards and outsourcing
The standards movement is a key element in definingthe success of the next decade for community
founda-tions. It is absolutely essential that American communityfoundations meet national
standards for ethical behavior,accountability, transparency, and transaction processing.But that is a
first step, not an end game.The national standards will not themselves bring aboutstandardization,
but the forces of industry evolution will.Writing about the role that standards play in all industriesin
the Harvard Business Review, Thomas Davenport says, “Abroad set of process standards will
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soon make it easy todetermine whether a business capability can be improvedby outsourcing it.
Such
http://www.downhi.com/doc/jgeK0xvj0z9K.html
standards will also make it easier
tocompare service providers and evaluate the costs versusthe benefits of outsourcing.― Most
community foundationsalready rely on commercial providers of payroll services,legal and
accounting processes, investment advising,grants processing, online content management, and
fundaccounting. As the field has articulated its standards ofpractice for accounting, reporting,
monitoring, grant pro-cessing, and so on, it should assume that those processesthat can be
standardized will be. They will then becomeautomated and offered for sale back to the community
foun-dations at prices lower than they can do those functionsin-house (think of payroll processing
or benefits manage-ment) and with greater accuracy.The question to be asked is: Which processes
matter towho we are and what we do? The opportunity for com-munity foundations is to embrace
those back-office toolsand restructure their front offices to be innovative con-tributors to
community improvement.
* Thomas H. Davenport, “The Coming Commoditization of Process,― HarvardBusiness
Review, June 2005, p102.
Page 32ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
26
All situations described in these scenariosare fictional. When possible, the names oforganizations
have been selected to conveya real sense of place and activity. This is not,however, intended to
reflect the choices andbehaviors of actual organizations.IMAGININGTHE FUTURE
us imagine different, yet plausible, futures. Theychallenge us to test assumptions about what
mighthappen and why, and to carefully consider ourchoices for adapting to change. The purpose of
cre-ating them is to help craft strategies based as muchon tomorrow’s emerging shape as on
practices fromthe past.There are literally endless combinations of the ex-ternal forces we have
described
and
innumerablepossible
http://www.downhi.com/doc/jgeK0xvj0z9K.html
responses
to
them.
Th
e following scenarioswere selected to give a
flavor of these possibilities,and they highlight some of the coming threatsand opportunities that we
believe have not yetreceived the attention they deserve. Many oth-er stories could—and
should—be told, becauselooking ahead in this way helps leaders build skillin seeing changes more
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quickly. This, in turn, helpsorganizations respond more rapidly, shaping theirown future before
someone else shapes it.The seven sketches that appear here look back from20 years ahead, in the
year 2025. They are clusteredaround three overall themes that we believe war-rant special
consideration: the need to experimentwith new ways to create benefit for communities,the pressure
for accountability, and the response toinnovation from the private sector.
SCENARIO THEME 1: CONFIGURING FOR COMMUNITY BENEFIT
The complex environment that community philanthropy organizations nowoperate within will
require them to consider new ways of aligning and arrang-ing themselves to achieve greater impact
on their communities. The first threescenarios highlight opportunities for community philanthropy
organizationsto work with one another and their constitu-encies in new ways. In the first, we
describe afuture in which shared commitment to a com-munity could allow several different types
oforganizations to consolidate their efforts. Inthe second, we explore what might happen if aset of
community philanthropy organizationsbegan to coordinate their efforts to achieve shared goals. The
third describes atrajectory where a community foundation rethinks its business model to serveits
community better.
Page 33The future is now for community foundations 27
Consolidating for clout
By 2010, the permanent repeal of the federal estate tax and the discontinuation of taxdeductions for
gifts of land dried up much of the expected intergenerational transfer of wealthand
http://www.downhi.com/doc/jgeK0xvj0z9K.html significantly reduced prior levels of charitable
giving. With charitable contributions downmore than 25 percent from their peak in 2005,
Miami/Dade County United Way CEO BruceDallimore, Miami Community Foundation president
Tanya Anderson, and United Cuban Amer-ican Fund executive director Juan Lopez Famosa
convened 10 Miami-area community-basedfoundations (including the Dade County Black United
Fund, the Miami Public Foundation forJustice, the Miami Gay and Lesbian Fund, the Dade County
Social Venture Partners, and thecommunity giving programs of BankUnited and the Carnival
Corporation) to discuss ways theycould collaborate to cut costs. In an unprecedented move, all 10
organizations agreed to mergeunder the umbrella of the consolidated Miami Funding Center (MFC)
over the next five years,although they each maintained their separate identities and
programs.“The initial idea was that it just didn’t make any financial sense for all of us to
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have our ownseparate organizations and back offices anymore,― explained Dallimore, who
shifted from theUnited Way to manage the MFC. “But what we ended up finding is that the
benefits of consoli-dating have been far greater than any initial cost savings we were originally
hoping for.―The closer relationship among the funds also helped them see where their interests
and ex-pertise overlapped and complemented one another. With help from the John S. and James
L.Knight Foundation, the MFC began to map funding flows in the metropolitan area, which itused
as the basis for coordinating local activity on four key local priorities: healthcare for theelderly,
early childhood development, job training, and after-school care. This tool and processproved
particularly valuable as public funds for these programs continued to shrivel. In particu-lar, the
funding maps allowed the philanthropic partners to bring new information to the tableand facilitate
community input into the budg http://www.downhi.com/doc/jgeK0xvj0z9K.html
eting process
for the relevant public departments.Since 2020, the Center has coordinated grants from its
component organizations when pos-sible, but has also managed to leverage more than $20 million
fromother private and government sources to support local initiatives. Ac-cording to Dallimore,
“It wasn’t always a perfect fit between all of us,but once we consolidated our back office, we
quickly realized thatit didn’t make any sense to keep trying to operate our front
officescompletely separately either. We will always maintain the differentapproaches and strong
separate presences within each of our coreconstituencies, but we are also helping all of the different
parts ofthe area come together as part of a larger community. We can do alot alone, but we have
even more capacity when we can easily worktogether too.―sCEnARIo
Page 34ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
28
Working across boundaries
Inspired by the tremendous success of Community Foundations of Canada in buildingnetworks of
community foundations cooperating on environmental issues that crossedgeographic boundaries
within Canada, a set of 10 U.S. Latino, Asian American, and AfricanAmerican identity-based
community funds in California launched the multiracial CaliforniaDiverse Communities Campaign
(CDCC) in 2012. Starting that year, each focus fund led itsown constituency through a year-long
community assessment and agenda-setting process.The funders then came together in a regional
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summit to identify the challenges common toeach of the different populations, develop cooperative
programs to address these challenges,and create a plan for funding key priorities. The plan was used
to engage mainstream commu-nity foundations, local government, and other private and corporate
funders in achieving betteroutcomes for communities of color throughout California.According to
Marion Cho, th
http://www.downhi.com/doc/jgeK0xvj0z9K.html
e consultant who facilitated
the campaign for the identity-basedfunds, “We knew that if community foundations in Canada
could create solutions that crossgeographic boundaries, there was no reason we couldn’t find
solutions that bridge the tradi-tional racial and ethnic boundaries here in California. What surprised
us, though, was that theissue at the top of all of our agendas was actually an issue shared by all
California communities,not just communities of color: the way that Proposition 13 [the 1978 ballot
initiative that cappedstate property tax increases] has hamstrung local governments’ finances
and their ability tomeet community needs.―The CDCC funds launched coordinated advocacy and
organizing programs in each of theircommunities, and were soon joined by several of the state’s
largest private and communityfoundations. The three-year collaborative effort culminated in 2018
with the repeal of Propo-sition 13. According to Cho, “We minorities are now the majority here
in California, and prettysoon, that’ll be the case for America as a whole. Our success repealing
Prop 13 shows how wecommunities of color can take the lead, capitalize on our collective power,
and improve qualityof life for everyone.―\parStanding on principle
Back in 2008, recognizing that they simply couldn’t match Fidelity and other charitable
giftfunds when it came to the efficiency and cost of the transactional component of donor
service,the Burlington (Vermont) Community Foundation (BCF) decided that it would take a new
tactto differentiate its services: injecting its community-based values into every aspect of its
opera-tions. Most visibly, this has meant that BCF will only accept donor advised funds (DAFs)
thatcomply with its institutional principles about diversity and equity.sCEnARIosCEnARIo
Page 35The future is now for community foundations 29
According
to
BCF
president
http://www.downhi.com/doc/jgeK0xvj0z9K.html
Gopal
Krishnan,
“We
decided
the bestway we could add value was to get
serious about really standingfor something. We realized that it was silly to allow people to
makegrants that didn’t promote the types of social justice values thatwe feel are essential to a
strong and healthy Burlington. And whileit forced us to make some difficult choices, we were
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confident thatit was the right direction for the foundation.―The sorts of difficult choices that
Krishnan refers to
began toemerge almost
immediately after
the announcement of
thefoundation’s new policy. Local businessman Jim Walters pub-licly declared that he would
remove his $350,000 donor advisedfund from BCF. “I don’t think it’s their place to tell
me what to dowith my money,― he explained, from the Walters & Co. building indowntown
Burlington.But the foundation’s commitment to its community principles wasreaffirmed over
the ensuing two years, as the number of DAFs sky-rocketed by more than 300 percent. Donors were
attracted to the institution’s clearly articu-lated point of view. In the 10 years since, BCF has
added more than $9 million in assets in morethan 300 new donor advised funds.“We’ve been
blown away by people’s interest,” said Krishnan. “The alignment between ourDAFs and
grantmaking ensures that we’re all working toward common community goals. Andbecause all
our donors’ interests are in sync with ours, we’ve also seen an increase in the num-ber of
our people who transferred their assets to our general fund as they got older.―The alignment of
its operations with its principles has also meant that the foundation haschanged the way the
community foundation invests and uses its endowment assets. Begin-ning in 2010, the foundation
began screening its investment portfolio for socially responsiblecorporate practices. “Our
grantmaking was supporting our principles, but we weren’t being socareful with all of the rest
of
our
assets,―
admits
http://www.downhi.com/doc/jgeK0xvj0z9K.html
Krishnan.
After
seeing
positiv
e asset growthfrom socially responsible
investing for almost five years, BCF’s board then agreed to go a stepfurther, and began to allow
the use of its endowment more proactively to make PRIs, loans, andinvestments in
Burlington-based businesses and social ventures.As board chair Susan Herndon puts it,
“Everything in the foundation—from our investments toour staff and board to our
grantmaking—is now aligned with the community principles that webelieve will make Burlington
a better place to live and work. Looking back, it’s just hard to seewhy it took us so long to take
a stand.―\parPage 36ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S.
COMMUNITY FOUNDATIONS
30
SCENARIO THEME 2: THE PRESSURE FOR ACCOUNTABILITY
Pressure for greater accountability over philanthropic resources is coming from manydirections. A
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need for public revenue, concern about corporate scandal, and real storiesof shocking corruption
within the nonprofit sphere have heightened calls for better be-havior within philanthropy and more
oversight from outside. Community foundationsare designed to exist for the long term, and this
commitment influences how near-termscandals affect them as well as how they must highly value
the enduring trust of theircommunities. The scenarios that follow look back from 2025 to imagine
two less obviousways that today’s imperative for accountability might play out.
Suing for support
In an unprecedented legal move, the Tennessee Hispanic Federation, a collection of
Latinononprofits that fundraise jointly in the central Tennessee region, filed suit in 2008 against
theRadford (TN) Community Foundation for failing to act in the interests of the area’s
growingHispanic population.As THF president Stephen Reyes explained, “They receive tax
benefits because they’resupposed to be there serving the whole community. That’s written
directly
into
their
mission.But
there
is
not
a
single
L
http://www.downhi.com/doc/jgeK0xvj0z9K.html atino on their board and not one on their staff.
They’ve been so busysetting up donor advised funds for rich white guys that they’ve
completely abandoned effortsto improve conditions for Latinos around Radford. They aren’t
acting in accordance to theircommunity mission, and we hope that our lawsuit will make them
realize that they can’t ignoreus anymore.―Reyes has spent the last year documenting the
grantmaking record of the Community Founda-tion, and believes he can demonstrate a systemic
pattern of exclusion of Latino populations andnonprofits. “The only reason our Hispanic
Federation even exists in the first place is that theCommunity Foundation has been ignoring Latinos
for years. We needed to figure out new waysto help our communities since they weren’t doing
it.”The national Latinos in Philanthropy (LIP) affinity group filedan amicus brief on THF’s
behalf, and LIP president Luis Medinaexplained that this case may be just the first of many
similarsuits around the country. “If community foundations aren’t go-ing to hold themselves
accountable to their communities, thenwe may see more and more communities looking for ways
toforce them to do it.―sCEnARIo
Page 37The future is now for community foundations 31
Standardizing to a standstill
“We owe a good part of our success to the backfiring of the standards movement,―
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explainedJulie Treshman, CEO of the Ohio Giving Circle Collective (OGCC). “When the
communityfoundations started down the standards path, I’m sure they didn’t intend for the
complianceprocess to stifle creativity the way it did.―The surprise was that changes in reporting
regulations created by the federal Philanthropy Ac-countability Act of 2010 forced community
foundations to strictly adhere to the common set ofpractices and approaches they had laid out in
their standards. Suddenly a huge amount of thefield’s effort was devoted to figuring out who
qualified to
http://www.downhi.com/doc/jgeK0xvj0z9K.html
be called a community
foundation,causing the field as a whole to look inward instead of outward.According to Treshman,
one effect, at least in her area, was that community foundations hadto dedicate their staff to more
traditional operational functions to maintain compliance, ratherthan getting out into the community,
experimenting, and trying new approaches.“Among other things, it made it so the foundations
just couldn’t keep the best and bright-est program staff,” she explained. “Those folks
were tired of filling out forms and wanted toget back to making a difference in their communities.
The community foundations basicallycannibalized themselves—promising great understanding
and community knowledge but thenmaking the work of program staff so miserable the real
innovators left to work elsewhere—likewith us.―Since technology and outsourcing had made it
possible to just “rent― back-office functions, theOhio giving circle was able to focus on
creating flexible programs for helping donors and com-munity activists to connect, both with one
another and with local nonprofits. And it wasn’t longbefore donors looking for greater
engagement began to head to the OGCC. Its membershiprose more than 350 percent between 2015
and 2017.Similar growth was also happening at other types of community giving vehicles, like the
AkronAfrican American Federation, which gained citywide recognition (and a huge boost in
donorinterest) after its community health fairs and outreach programs began to demonstrate
statis-tically significant impact on prenatal healthcare outcomes in the city.According to Federation
president Shawn Johnson, “Sometimes I’m glad we don’t count as acommunity
foundation. If we’d had to stick only with the traditional grantmaking activities thatfit under the
community foundation standards, we never would’ve hit on this approach, or got-ten the sort of
results
in
the
community
http://www.downhi.com/doc/jgeK0xvj0z9K.html
that
we
have.―sCEnARIo
parPage 38ON THE BRINK OF NEW
PROMISE: THE FUTURE OF U.S. COMMUNITY FOUNDATIONS
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32
SCENARIO THEME 3: COMMERCIAL INNOVATION SETS THE STAGE
As Fidelity did more than a decade ago, new philanthropic vehicles and technology firmsare poised
to fundamentally change the way philanthropy is transacted. Technologycompanies like BlackBaud,
Bromelkamp, Collaborative Standards, Foundation Source,Kintera, MicroEdge, and Telosa are
competing madly among themselves for market shareand breakthrough products. Some of these
companies will thrive; others are on the brinkof going out of business. This dynamic marketplace
represents either new challenges ornew opportunities for community philanthropy organizations
depending on how the fieldresponds to their entry into the marketplace.As with the previous
scenarios, the following sketches look back from 2025 to exploretwo different trajectories that
could have resulted from the choices that community foun-dations and other community
philanthropy organizations made in responding to theentrance of Kintera, a publicly-traded
philanthropic data management giant. The sce-narios could just as easily be painted with a different
organization such as FoundationSource, which is beginning to be able to make the creation and
management of privatefoundations much more accessible and cost effective for individual donors.
Kintera, the competitor
It was no surprise that Kintera—bolstered by its extensive acquisitions of grants management
andnonprofit fundraising software companies in the early 2000s—became the newest giant in
thephilanthropic data management field. But what did surprise many in the field was the way the
com-pany leveraged its dominance in online giving to patent data collection practices and
consolidateinformation across nonprofits and donors to develop a massive, proprietary database of
donor
andfundraising
information.By
http://www.downhi.com/doc/jgeK0xvj0z9K.html
early
2010,
Ki
ntera began to offer a new service as the
“data aggregator― for the field, mining itscollective databases to provide unparalleled
information about trends and patterns in giving thatbegan to draw both nonprofits and funders away
from community foundations. Kintera software wasable to make tailored online grant
recommendations to donors based on their giving history and thegiving patterns of other donors
with similar interests, while at the same time providing nonprofitswith a way of reaching out to
donors directly without help from intermediaries.The company’s dominance over community
change information snowballed throughout the 2010s,as its leadership position allowed it to
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increase revenues and decrease costs as it scaled. At thesame time, it continued to siphon donors
and community-based organizations away from commu-nity foundations, and raised costs for
community foundations that chose to use its proprietary ser-vices. By 2020, according to an analysis
by The Wall Street Journal, almost 40 percent of all organizedphilanthropic transactions were
managed through Kintera systems, and estimates of the company’smarket share today actually
put the figure at closer to 50 percent.sCEnARIo
Page 39The future is now for community foundations 33
Kintera, the partner
After adding Collaborative Standards and MicroEdge—two of the field’s largest grants
managementsoftware providers—to its already extensive holdings of technology companies in
2005 and 2007,Kintera was positioned to manage the back-office and transactional functions of a
vast majorityof the nation’s community foundations. Looking ahead and recognizing the power
of this massivegrants dataset, Community Foundations of America and the Council on Foundations
negotiated anunprecedented national partnership with Kintera in 2008 to link and unify the back
offices
of
par-ticipating
community
foundations
http://www.downhi.com/doc/jgeK0xvj0z9K.html
across
the
country
using
Kinte
ra software.As a result, each community
foundation was able to essentiallyoutsource its back-office operations and enjoy the economiesof
scale that came from consolidating multiple organizations’operations and finances. This
allowed each foundation to offertransactional costs and standardized reporting competitive
withthose of national charitable gift funds like Fidelity.Within communities, the partnership
revolutionized the way com-munity foundations were able to work across localities. With
themerged back-office data, community foundations using Kinterawere able to identify trends in
grantmaking across communities,coordinate activity as never before, and provide donors with the
op-portunity to tap the community knowledge of a national network oflocal funders. One
impressive example of this was the rapid growthin financial support for school voucher programs
that was enabledsoon after the Olin, Bradley, and Walton family foundations under-wrote
Kintera-based systems for a network of scholarship programsand community foundations across the
south and southwest.According to Kintera president and CEO Aaron Brighton, “By takingover
the administrative side of the community foundations, we’veallowed them to focus more on
being out there with theirconstituencies. Each foundation is able to focus its staffingand activity on
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the dual local services of donor salesmanshipand community knowledge. And we are able to link
togetherall of that on-the-ground local knowledge and expertise sothat no matter what community
foundation door a donorwalks into, they can be connected to a deep community un-derstanding
anywhere else in the country. You could walk ina door in Raleigh, North Carolina, and learn about
nonprofitsin Taos, New Mexico, just as easily as you could about thenonprofits there in your own
neighborhood.―sCEnARIo
About Kintera
WHERE
IT
IS
TODAYA
leading
provider
http://www.downhi.com/doc/jgeK0xvj0z9K.html
tenable
of
online
nonprofit
solutions
organizations
to
tha
use
theInternet to increase donations, reduce fundrais-ing costs, and build awareness and affinity foran
organization’s cause by bringing itsemployees, volunteers, and donors together inonline,
interactive communities.WHERE IT COULD BE IN THE NEAR FUTUREIn reality it is only a
small leap to get fromtoday—where Kintera is a key player in onlinegiving—to tomorrow, when
the firm could capi-talize on its proprietary database of informationon nonprofits and donors and its
marketingmuscle and real-time presence on websitesaround the world to both build and serve
themarket for community change information.
Acquisition of newproprietary softwareservice functionalitiesAccess to new NGOcustomers,
corporatecustomers,
andnew
donorsAble
to
consolidatedata
across
donors,NGOs,
and
volunteersAble to offer valuableservices as a dataaggregator, increasingits differentiation andvalue
propositionIncreased revenuesand decreased costsas it scales
Source: Monitor Institute hypothesis of possible Kintera strategy
Page 4034 ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
Individual community foundations and the field as a wholewill need creative and courageous
leadership to thrive in theera ahead. Much of the mindset that has guided the field tothis point needs
to be replaced with a new set of assumptionsabout priorities, operations, and the definition of
success.
Page 4135
Lessons from the future: Strategic implications for community foundations
The best efforts of previous generations of leaders have left our generation anincredible legacy—a
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diverse and growing institutional infrastructure—to buildupon. But as the scenarios we imagine
suggest, incremental change may not besufficient to ensure the field’s relevance and impact in
the
pivotal
new
era
thathas
already
begun.Today’s
compelling
need
is
t
http://www.downhi.com/doc/jgeK0xvj0z9K.html o summon the courageous leadership that will
berequired to meet the challenges and opportunities we have been describing.How community
foundations organize and act now will reverberate for yearsto come. And we do mean now. The
window for action in this era is likely to bemuch shorter than in previous ones, because of the pace
and scale of change inAmerican communities and among the innovators from inside and outside
thefield who are busily creating the future.As a result, much of the mindset that has guided the field
to this point needs tobe replaced with new assumptions about what constitutes success. The
leader-ship task we see lies in creating three subtle but significant shifts in assumptionsand
priorities:
• 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 impact
Lessons from the future:
Strategic implications forcommunity foundations
Page 42ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
36
We think of these shifts as new principles forperformance. Each of them plays out both at thelevel
of individual community foundations and atthe field level, where investments must be made
toenable progress that individual institutions cannotaccomplish alone. What follows is a basic
explana-tion of how community foundations can changein order to thrive in the next era, with
illustrativeexamples of actions that can be taken at the fieldlevel. A separate discussion guide,
downloadable at
www.communityphilanthropy.org, has been designed to help community foundations apply theseprinciples in their particular context.
A SHIFT IN FOCUS FROM THE INSTITUTIONTO THE COMMUNITY
Over the last decade, the new competitive envi-ronment—and the realities on the
ground—haveunderstandably
led
American
community
founda-
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http://www.downhi.com/doc/jgeK0xvj0z9K.html tions to an emphasis on operational efficiency
andto a primarily defensive response of institutionalpreservation. That was the critical first-order
re-sponse. It has been visible in the move to nationalstandards; the cost-basis studies conducted for
thefield; the widespread implementation of nationalmarketing efforts; and the creation, evolution,
andcurrent alignment of the field’s two national bod-ies—the Community Foundations
LeadershipTeam and Community Foundations of America.Many community foundations have
considerablework to do in bringing their operational and tech-nological capacity up to par. These
responses
andstrategies
are
essential.Community
foundations
do
have
a
business
modelproblem—how to value and price their communityexpertise and leadership as they get
squeezed be-tween large-scale, low-cost, do-it-yourself productproviders on one side and
specialized, high-end,custom service firms on the other. They also face areal challenge in appealing
to a new generation ofliving donors (many of whom are going to live avery long time). But the race
is not just to makethe current model more efficient and to raise ev-eryone’s performance to a
“best practice― from thepast. It is not just to pull in and “protect― the com-munity
foundation from all its competition. And itis certainly not to protect the old franchise of
doingtransactions, because that is a race that they will al-most certainly lose.There is a very real
danger that by remainingprimarily focused on these institution-buildingand operational issues today,
community founda-tions may be working hard to perfect an industrythat will not be matched to
emerging realities. It isnow time to move on to a second order of change—a shift outward, to
re-examining the function andimpact of their work in the context of rapidlychanging
communities.The field has long known and acknowledged that itsstrategic advantage is in its
communit
http://www.downhi.com/doc/jgeK0xvj0z9K.html
y knowledge,relationships, and
leadership. But with notable ex-ceptions, this is still basically rhetoric. To capitalizeon their unique
advantage, community foundations
Every service and product community foundations offer—from donor education to program
capacity-building, fromestate planning to initiative management, from donoradvised funds to
scholarships, giving circles, online fundmonitoring, and more—is now available from other
sources,or will be soon.
Page 43Lessons from the future: Strategic implications for community foundations 37
will need to refocus on why they exist and whomthey ultimately serve.Why? Because every service
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and
product
that
com-munity
foundations
offer—from
donor
educationto
program
capacity-building, from estate plan-ning to initiative management, from donor advisedfunds to
scholarships, giving circles, online fundmonitoring, and more—is now available from oth-er
sources, or will be soon. Furthermore, since veryfew of a community foundation’s constituents
useall of the foundation’s services, the value is not in-herent in the mix itself. Quite the contrary.
Today’scommunity foundations need to figure out howthey can be indispensable additions to
communi-ties’ improvement strategies and to donors’ portfo-lios of giving options.With
many other types of organizations able tohandle the services that community foundationshave
traditionally
managed—often
with
lower
costsand
greater
efficiency—community
foundationsmore than ever before will need to demonstratetheir value by emphasizing their impact
on and ac-countability to their communities. This is a pointthat others before us have also
emphasized. Com-munity foundation president and leading thinkerEmmett Carson articulated it
well in a speech tothe 2004 Global Symposium of Community Foun-dations: “We may be
required to leave behind thosewho are wedded to the path of being charitablebankers
http://www.downhi.com/doc/jgeK0xvj0z9K.html
rather than social change agents.―30The
upshot is that the primary definition of institu-tional success cannot be the size of the
endowment.Success will come from the organization’s role asa focused, long-term advocate on
behalf of thecommunity. Building an endowment is one impor-tant part of helping communities, but
it is not thefinal measure of success nor the primary reason forthe organization to exist. Community
philanthropyorganizations, especially community foundationsoutside of the United States and
identity funds andalternative funds in the States, have developed awide range of other ways to help
donors and com-munities work together and prepare for the longterm. It is permanence—the
assurance of a strong,enduring commitment that will allow donors to feelsecure that gifts given
today will continue to servethe community for the long term—that matters.Community
foundations will need to articulate thelink between their demonstrated, principled leader-ship in
communities and the promise that perma-nent resources can be used nimbly and effectivelyto
address the pressing problems of the future. Theendowment is the means to service, not the endin
itself.This is, of course, the rhetoric of most communityfoundations already. But in the coming
years, everyinstitution needs to ask how to make it more a real-ity. And the various leadership
bodies for the fieldas a whole need to find ways to help communityboards and staff refine the skills
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necessary to “walk
Page 44ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
38
the talk― of community benefit and to focus atten-tion on the purposes of community
foundations,not just their operations or marketing.For instance, when will U.S. community
foundationsfollow the lead of Canada, and seek to stimulate co-operation on a national issue where
together
theycould
make
a
difference,
http://www.downhi.com/doc/jgeK0xvj0z9K.html
benefiting
all
their
com
mu-nities? Problems no longer fit neatly into
geographicboundaries, if they ever did. Solutions often needto reach across the boundaries of
place—whetherwithin regions, states, or the nation. Communityfoundations will be able to best
serve their commu-nities if they work in ways that recognize the largercontext in which their
communities now exist.
A SHIFT FROM MANAGING FINANCIALASSETS TO LONG-TERM LEADERSHIP
For most of their history, community foundationshave helped their towns, cities, and regions by
giv-ing money for a variety of purposes, often thosedesignated by donors. The obvious question
iswhether this will be a successful strategy in an eracharacterized by competition for donor dollars
andgrowing community needs.Each community foundation must ask itself: Whatis the problem to
which this institution is the solu-tion? The answer will vary from place to place, butwe believe that
in the future, the answer will in-creasingly be this: mobilizing a community and itsresources to
recognize the community’s collectiveaspirations, engage its own toughest challenges,
andembrace its most inspiring opportunities.31Strategic positions on challenging issues,
cross-sector solutions, and a relentless commitment tothe betterment of communities must be as
much apart of community foundation parlance and actionin the future as donor services and grants
manage-ment have been in the past.Many community foundations have already beenbreaking
ground in just these ways and more, dem-onstrating leadership on difficult local issues, fromyouth
violence to economic development, socialjustice to environmental awareness. An impor-tant study
from Chapin Hall Center for Childrenproduced a very helpful way of categorizing thestrategic
leadership roles of community foundationsbeyond simple grantmaking.32 The roles outlined inthe
study
include:•
Building
useful
knowledge.
Communityfoundations
have
bo
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th firsthand contact withcommunity problems
and access to infor-mation, ideas, and approaches outside theirlocalities. They can spot trends,
surface issues,provide analysis, and serve as hubs for com-munity information.• Shaping
community discourse.Community foundations are well positionedto shape public opinion about key
communityissues and to bring together community stake-holders to forge long-term connections
andplan local agendas that involve all constituentsin the design and implementation.• Growing
and linking local leadership.Community foundations can help to linkdiverse stakeholders to build
broader constitu-encies and create new partnerships.
Page 45Lessons from the future: Strategic implications for community foundations 39
• Brokering regional solutions. Communityfoundations can help to facilitate action acrosscities,
school districts, and service areas toaddress regional problems that extend beyondthe boundaries of
any one city.• Maximizing access to government resources.Community foundations can help
communi-ties to connect with the public sector to accessgovernment resources and develop
collabora-tive solutions.• Nurturing high-impact philanthropists.Community foundations can
engage andmobilize donors as participants and leaders incommunity problem solving, helping
donorsto share not just their money, but also theirknowledge, expertise, and networks.•
Collaborating for local systems reform.Community foundations can help disconnect-ed local
agencies take a comprehensive view ofissues and solutions.• Advocating and partnering for
policy
solutions. With the devolution of federal authority to state and local control, communityfoundations are increasingly becoming activepolicy
advocates on a range of communityissues. More community foundations will pur-sue policy roles,
either
directly
or
indirectly,as
the
issues
their
constituents
face
cann
http://www.downhi.com/doc/jgeK0xvj0z9K.html ot beaddressed solely though grant funding.•
Enhancing community capacity.Community foundations can build theknowledge and capacity of
community-basedorganizations to achieve their goals throughtraining, technical assistance,
coaching, refer-rals, and other learning opportunities.• Strengthening accountability.Community
foundations can help local lead-ership to develop metrics and think throughissues of accountability,
measurement, andevaluation to inform local decision making.In addition, we see a future in which
communityfoundations begin to use their intellectual, reputa-tional, and financial resources to get
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all three sectorsto the design table with citizens to craft long-termcommunity solutions that use
these resources. Sim-ilarly, we can imagine a day that recognizes ratherthan resists the fact that
more and more donors usemore and more giving vehicles; in response, com-munity foundations
will build ways to help themrealize their dreams across those vehicles and useeach one more
strategically to benefit communities.While there has probably never been one model fora
community foundation, there certainly will not bein the future. These kinds of roles will make up
the“building blocks― of community philanthropy strat-egy in the future. No single role or set
of roles willmake sense in all communities. And communityfoundations will not be the only ones
using them, ofcourse. A community foundation can now mix andmatch from among these building
blocks to meetthe specific needs of its community and comple-ment the existing competencies of
other communityorganizations.As individual community foundations seek to in-novate, they will
increasingly want to know what
A community foundation can now mix and match from arange of strategic roles to meet the specific
needs of itscommunity and complement the existing competenciesof other community
organizations.
Page 46ON THE B
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RINK OF NEW
PROMISE: THE FUTURE OF U.S. COMMUNITY FOUNDATIONS
40
has—and has not—worked elsewhere. Some in-novations will require more than one
institution.That’s where leadership at the field level must beprovided.The field currently lacks
ways to capture the rangeof existing practices, catalyze innovation, experi-ment broadly,
communicate success, and rewardcreativity. National bodies such as the CFLT andCFA and regional
associations of grantmakerscould play an important role in fostering and shar-ing innovative
efforts.Certain types of innovations probably must be ledfrom the national level. Several
community foun-dations, for example, might be invested in as pilotpartners for a national shared
back office by creatingregional relationships with United Ways, or to syn-dicate community
information for resale throughGuideStar, Kintera, Charity Navigator, or othercommercial partners.
The key would be to seed thiswork, learn from it, and spread what is learned toenable the field as a
whole to adapt more quickly.
A SHIFT FROM COMPETITIVE INDEPENDENCETO COORDINATED IMPACT
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Community foundations cannot rethink their ownstrategic roles without developing a deeper
under-standing of how they fit into the larger network ofcommunity philanthropy organizations and
ven-dors. Otherwise, they risk wasting time and effortby competing unnecessarily or duplicating
effort.Or they risk missing the ways to render servicemore efficiently and effectively by taking
advantageof new tools and products coming into the fieldfrom the outside.We believe that the future
success on the ground incommunities and successful competition for donorswill require a
fundamental shift from a mindset of“independent value― to one of coordinated
impact.Today’s community foundations need to figure outhow they can be indispensable
additions to com-munities’ improvement strategies and to donors’portfolios of g
http://www.downhi.com/doc/jgeK0xvj0z9K.html iving options. They need to structurethemselves
to work in real partnership with othercommunity philanthropy organizations and com-mercial
innovators while enhancing and deepeningthe connections people make to one another and
tocommunities.The new challenge is not just to figure out how tocompete individually, but also how
to add value byfacilitating the aggregation of resources, capaci-ties, and connections to produce and
demonstratebetter outcomes for communities. Free from elec-toral cycles and bottom-line pressures,
community
Free from electoral cycles and bottom-line pressures,community foundations must capitalize on
theirindependence by demonstrating their interdependence.
Page 47Lessons from the future: Strategic implications for community foundations 41
foundations must capitalize on their independenceby demonstrating their interdependence.There are
three major ways this can happen: forgingnew collaborative arrangements with other com-munity
philanthropy organizations; anticipatingand capitalizing on commercial innovation; andfacing the
inevitability of consolidation. We discusseach in turn below.
New collaborative arrangements withincommunity philanthropy
Community foundations now operate in anenvironment populated by a wide range ofplayers,
including United Ways, race and eth-nic funds, alternative workplace giving funds,consolidated
federal campaigns, giving circles,remittance networks, faith institutions, and lo-cal nonprofits.
While each community may nothave all of these resources, most have several. Forcommunities to
thrive, there needs to be a clearsense that the whole is more than the sum of itsparts. This means
that networks of communityphilanthropy organizations, including commu-nity foundations, need to
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be able to demonstratethat they give back more to the community thanthey take from it.Such an
equation is only possible if the choru
http://www.downhi.com/doc/jgeK0xvj0z9K.html
sof
organizations in any given community workstogether and if each individual organizationadds value
to
the
whole.
Not
every
communityneeds
every
type
of
community
philanthropyorganization—some simply cannot afford theduplicative infrastructure required to
support somany organizations.As a result, community philanthropy organiza-tions must reconsider
their own contributionsand re-imagine the connections between theirinstitutions to achieve better
outcomes for theircommunities. A recent collaboration between theAnnie E. Casey Foundation and
the East BayCommunity Foundation, for example, mappedthe disparate flows of resources in the
easternSan Francisco Bay region to better understandpatterns of funding and how support might
beorganized more strategically to achieve commongoals. In another way, the Women’s Funding
Net-work organizes community-focused individualsand foundations with a commitment to
genderequity so that the creativity of each communityis captured, added to, and reapplied across
thenetwork. Investments in joint evaluation frame-works, benchmarks, financial tools, and
jointprogramming are made at the central level andshared across the network. In Canada, the
powerof individual community foundations is magni-fied by a common commitment to social
justicethat frames local initiatives and elevates their re-sults to a national scale. Along the
U.S.-Mexicoborder, a collaborative of cross-border commu-nity foundations is learning how to
nurture andfacilitate community philanthropy across culturaland political boundaries.
Community foundations now operate in an environmentpopulated by a wide range of players. For
communitiesto thrive, there needs to be a clear sense that the wholeis more than the sum of its parts.
Page 48ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
42
Anticipating and capitalizing on commercialinnovation
C
http://www.downhi.com/doc/jgeK0xvj0z9K.html
ommunity philanthropy organizations
areonly one type of partner that will shape the fu-ture success of community foundations. Therise of
commercial vendors over the last decademay be at least as important a development forthe way that
community foundations operate.The response from community philanthropy tothese new entrants
has evolved since Fidelityentered the field in 1991 from an initial pos-ture of defiance and denial to
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acceptance andonto partnerships of various sizes and successes.Community Foundations of
America and theCommunity Foundations Leadership Teamhave provided leadership here, in terms
of theTechnology Syndicate, the Technology Steer-ing Committee, the Merrill Lynch Initiative,
andemerging relationships with Kintera. Similarly,individual foundations around the country
havenurtured strong relationships with local law firmsand investment managers, boutique financial
ad-visory firms, and other commercial enterprises.But the pace of the field’s response to
commercialactivity is still too slow and too hesitant.Community foundations have spent 14
yearsresponding to the introduction of the first com-mercial charitable gift fund. The window
ofopportunity for the next major change will be sig-nificantly smaller. In the next 14 years,
communityphilanthropy will need to respond to several wavesof innovation, each of this same
magnitude.The area to watch, as our scenarios highlight, iscommercial vendors of all philanthropic
trans-action services, including all gift processing,reporting, monitoring, information gathering,and
matchmaking services for donors and non-profits. The tools that organizations like Kinteraand
Foundation Source are now creating are builtfrom the Web out, are designed to go quickly toscale,
and can quickly and universally be updatedto respond to new regulatory requirements or tofold in
new
information
sources.
The
businessmodel
http://www.downhi.com/doc/jgeK0xvj0z9K.html
behind
these
approaches
r
evolves aroundthe ability to constantly lower
the costs of in-dividual transactions, thereby allowing the feescharged for these services to be as
low as possibleand to profit by processing as many transactions.In short, what Fidelity did to the
communityfoundation’s business model for gift process-ing, these companies are set to do to
communityfoundations’ services for data gathering, donorservices, and nonprofit information.If
community foundations respond to these com-petitors the way they responded to Fidelity in1991,
the next decade will see a repeat of many(if not all) of the challenges of the last: outdatedbusiness
models, diminished visibility, and in-creased competition. If, instead, they respond byaccepting the
fundamental changes in both thecommunities they aim to serve and in the op-tions those
communities can access, communityfoundations can build on nearly a century’s worthof
experience and remain vital components in thephilanthropic network of the next era.
Community foundations have spent 14 years respondingto the introduction of the first commercial
charitable giftfund. In the next 14 years, community philanthropy willneed to respond to several
waves of innovation, each ofthis same magnitude.
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Page 49Lessons from the future: Strategic implications for community foundations 43
To understand how new relationships with com-mercial vendors might look, consider the
realexample of community foundations in Italy.The Cariplo Foundation, a supporter of com-munity
foundations, partnered with a commer-cial software firm to build a Web-based systemfor
grantmaking, fund accounting, and regula-tory reporting. The system is supported by
theFoundation’s program manager with responsibil-ity for community philanthropy. As a
Web-basedsystem, it can be updated automatically, technicalassistance can be provided remotely,
and the in-frastructure investments for individ
http://www.downhi.com/doc/jgeK0xvj0z9K.html
ual commu-nity foundations are minimal. This is especiallyimportant in Italy, where most of the
foundationsare quite small and currently run by volunteers.The software ensures that legal standards
are metby all users, reporting meets all compliance re-quirements, and the information across
fundersand grantees is always up-to-date. While the sys-tem ensures standards are met for
accounting andreporting, it invites diversity because data can beaccessed in the language of the
user’s choice. Inaddition, each foundation works on its own data-base of donor and grantee
information. Even asthis protects the privacy of all involved, the factthat these databases are all
consistently structuredmeans the foundations are in effect building theirown, always updated,
national database of non-profit organizations and funding trends.While by no means a perfect
example, the Car-iplo story reveals what we believe will be animportant characteristic of innovation
in thefuture. Next-generation community philan-thropy, in terms of everything from software
up-grades and knowledge products to relationshipsthat foster community improvement, are
beingbuilt with input from both the commercial andnonprofit sectors, with each contributing
theircomplementary expertise. Software firms makeand sell software and the community
foundationboards focus on community improvement. Eachside benefits by doing what it does
best.These are lessons of great importance in the U.S.Our nonprofit community philanthropy
organi-zations need access to affordable, scalable toolsfor running themselves. Commercial vendors
aredetermined to offer these. They will always beable to move more quickly as
individualenterprises than can a field of communityphilanthropy organizations. They are built on
themotivation of cost cutting, profit maximization,and market share—and are thus compelled to
scanmarkets,
consider
the
http://www.downhi.com/doc/jgeK0xvj0z9K.html
future,
and
experiment
w
ithnew products.The nonprofit sector of
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community philanthropyneeds to move beyond reluctant partnership andon to a next phase where
commercial enterpriseis embraced for its innovations. Communityfoundations need to move more
rapidly thanever before to establish themselves as sources ofreal community knowledge that add to
the com-mercial products coming online. The timeframein which to make this happen is very short,
and
The nonprofit sector of community philanthropyneeds to move beyond reluctant partnership andon
to a next phase where commercial enterpriseis embraced for its innovations.
Page 50ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
44
the window may close if mutually beneficial re-lationships are not created soon. This is becauseof
the pace at which the commercial is moving to“productize― information, package it
specificallyfor donors, syndicate content, and make it avail-able at the lowest possible cost (or for
free). Ifthis happens without some meaningful partner-ship, community foundations will find it
difficultto entice people to pay for their own knowledgeproducts and services.Community
foundations have a moment of op-portunity to capitalize on the innovation and ef-ficiencies of the
commercial services, rather thantrying to defeat them. The scenarios earlier inthis paper dramatize
some of the choices, andthe stakes. The current opportunity offers thefield a rare second chance to
get right the sorts ofworking relationships with Kintera, FoundationSource, and other commercial
providers that weremissed with Fidelity a decade and a half ago.But this opportunity can only be
seized witha better field-level scanning and monitoringsystem for understanding where commercial
in-novation is coming from—and how to adapt itfor community foundation purposes. Communi-ty
foundations
need
to
have
an
eye
http://www.downhi.com/doc/jgeK0xvj0z9K.html
on
even
newertechnologies
and
the ways they change humaninteraction.
Cellphones and social networkingprograms like MeetUp.com are changing the waypeople find one
another. Social tagging programslike de.li.ci.ous and community knowledge sourc-es such as wikis
are changing how people findinformation. These are only two core elements ofcommunity
organizing and information gather-ing that are changing rapidly and profoundly.Functions such as
community identification, in-formation gathering, and resource development,which lie at the heart
of community philanthropy,are also changing. Community foundations mustfind ways to regularly
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anticipate, understand, andexperiment with the tools that are changing theircore functions, as well
as the new organizationsand community behaviors that result from wide-spread adoption of these
tools. For while theymay be new today, tomorrow they will be as com-mon as teens with
cellphones—or as common ascharitable gift funds.
The inevitability of consolidation
New kinds of cooperation and collaboration—withother community philanthropy organizations
and
Community foundations must find ways to regularlyanticipate, understand, and experiment with
thetools that are changing their core functions.
Page 51Lessons from the future: Strategic implications for community foundations 45
with commercial vendors—will not be sufficientin some communities and regions. In the
com-petitive marketplace for donors that now exists,the ongoing pressure to lower the costs of
doingbusiness will require some degree of consolidationamong community foundations and with
othercommunity philanthropy organizations.Throughout the country we have seen beginningefforts
to consolidate the back-office functions ofcommunity foundations, thereby reducing over-all costs,
decreasing administrative demands, andstill maintaining leadership boards, local capacity,and
resident visions. As philanthropic t
http://www.downhi.com/doc/jgeK0xvj0z9K.html
ransac-tion
processing moves to the Web in the ways wehave just described, we will only see more of this.In
fact, the field should take it upon itself to en-courage and reward consolidation. To really leadon
this issue, the field needs to take a long-termapproach to building resources for communitiesand
imagine new ways that today’s technologiescan facilitate the application of local
expertise.Consolidation is not merely a call for merg-ers of organizations. It is an opportunity
toredesign the building blocks of local expertise,long-term commitment to improvement, the
di-versity of our communities, and the developmentof philanthropic assets using technologies,
con-figurations, and expectations that fit the currentand coming generations. By doing so,
communi-ties can reap the benefits that come from moreefficient infrastructure.There are several
factors visible now that point toan era of consolidation. Indeed, consolidation isnot so much a
prediction of the future as it is pat-tern recognition of what’s already happening
today.Community foundations and philanthropy orga-nizations are struggling to compete with
onlinevendors on the sheer cost of doing business. Lead-ers around the nation are reaching
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retirement age,and many communities are deeply concerned aboutnext-generation leadership. Many
regions of thecountry (though not all) are saturated with foun-dations, philanthropy organizations,
and nonprofitsall seeking support from the same donors.As a result, board and staff members of
theseorganizations and the communities they serveare beginning to see the potential in
reducingoperational expenses while maintaining commu-nity control. Successful administrative
alliancesfrom Northern California to Michigan’s UpperPeninsula to New England have shown
that lo-cal control and stand-alone institutions are notone and the same thing. New structural
arrange-ments, from advisory boards to r
http://www.downhi.com/doc/jgeK0xvj0z9K.html
egional alliancesto umbrella funds, make this possible. New tech-nology means philanthropic
organizations candeploy turnkey software suites that handle all thereporting requirements and
transaction detailswith fewer or no dedicated staff people, officespace, or utility costs.Other
community philanthropy organizationsare also surrounded by consolidation pressures.Already,
many focused, identity-based funds havetaken shelter at community foundations as a wayof
mitigating the significant overhead and otheroperating costs of managing a small organization.
The opportunity for community foundations today is toget in front of the consolidation wave and
shape it. Thealternative is to wait for it to wash over them.
Page 52ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
46
Technology
vendors,
consulting
firms,
andother
service
providers
to
community
phi-lanthropy—including the alignment of theCommunity Foundations Leadership Teamand
Community Foundations of America—point to the limits on infrastructure fundingand the
efficiencies being sought.The situation with United Way deserves spe-cial mention, as national
leadership is alreadydriving the organization to assume the typeof local leadership role we have
been de-scribing here for community foundations. Inmany communities, United Ways and
com-munity foundations are on a collision course,as both seek ways to reduce costs and pro-vide
distinctive value in a new context. Whiletensions and positive co-existence have bothbeen
hallmarks of the long history betweenthese institutions, the new pressures make itlikely that the
future will be less conducive tosuccessful independent cohabitation. Skill-ful leadership is needed at
both the nationaland community levels to ensure that com-munities are not the victims of
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unproductivecompetition between community founda-tions and United Ways.The opportunity f
http://www.downhi.com/doc/jgeK0xvj0z9K.html or community foundationstoday is to get in front
of the consolidationwave and shape it. The alternative is to waitfor it to wash over them. The wave,
in ourview, cannot be stopped.One approach might be for the field’s leader-ship organizations,
such as CFLT and CFA,to take on the unpopular issue of duplicativeinfrastructure and to explore the
practicalityof consolidation and partnerships betweencommunity philanthropy organizations.This
could begin with an economic studyon what is spent maintaining and operatingall independent
community philanthropyorganizations, including United Ways andcommunity foundations.
In many communities, United Ways and communityfoundations are on a collision course, as both
seekways to reduce costs and provide distinctive valuein a new context.
Page 5347
Lessons from the future: Strategic implications for community foundations
Conclusion:Betting on the future
Shifting fundamentals
The old measure of success was growth in assets undermanagement.The new measure of success is
demonstrated leadership onbehalf of a community.The old definition of a philanthropic product was
a structurefor devoting financial assets to charity. Examples include donoradvised funds,
scholarships, and charitable annuities.The new definition of a philanthropic product is a
combinedpackage of know-how and financial resources that results incommunity improvement.
Examples include successful com-munity development investments, rehabilitated housing,
andeffective artist-in-residency programs.*The old question was, “What did our grant
accomplish?”The new question is, “How do we work with others tocontribute to community
improvement?―The old business model was based on fees on assets undermanagement.The new
business model is being invented by this generation ofcommunity philanthropy leaders.
*Articulated
by
Ronn
Richard,
president
of
The
Cleveland
F
http://www.downhi.com/doc/jgeK0xvj0z9K.html oundation, July 2005.
We have highlighted the key choices facing individual organizations and the field asa whole as they
attempt to make a difference in American communities in this newera. Given the mix of certainties
and unknowns about how communities will chooseto organize, how market forces will treat new
technology vendors, how communityphilanthropy networks will be structured, and how politics and
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public outcry will shaperegulatory oversight, today’s decision makers are forced to make
calculated bets.None of the recommendations we’ve made will be easy to implement. Finding
sustain-able ways to focus on communities, provide long-term leadership, and create
coordinatedapproaches that demonstrably improve communities is tough work. Community
foun-dations are being squeezed from all sides in the community philanthropy universe. Onone side,
their donor and financial services are the objects of great interest, innovation,and competition from
commercial financial and technology vendors. On the other side,their roles as community leaders
and knowledgebrokers is based on relationships with service-providing local organizations, many of
whomare increasingly able to grow and manage com-plex philanthropic relationships on their
own.The choices are difficult, but choosing to donothing is likely to result in declining relevancefor
community foundations. Big bets will needto be made and whole new ways of structuringthe work
of community philanthropy created.There are already leaders in many places—somepredictable
and some unexpected—who arecreating the “new promise― this report heralds.These are
leaders who cultivate philanthropicresources as diverse and dynamic as their com-munities and who
continually engage new tools,ideas, and people in their endeavors. Such lead-ership has defined
previous eras of communityfoundation success. Such leadership will deter-mine whether our own
era realizes i
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ts promise.
Page 54ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
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ENDNOTES
1 It is important to note that from their inception, community foundations have had a close relationship with thefinancial services industry. For more
information on Goffand The Cleveland Foundation, see Diana Tittle, RebuildingCleveland: The
Cleveland Foundation and its Evolving UrbanStrategy, Columbus, OH: The Ohio State University
Press,1992.
2 Among the private funders that provided significant support
for community foundations were the Ford, Mott, Hewlett,Irvine, Kellogg, Knight, Kresge, and
Packard foundations, aswell as the Lilly and California endowments.
3 In the financial services industry, for example, the Internet
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allowed almost anyone to go online to research stocks andmutual funds and to make financial
transactions that oncerequired assistance from a financial broker. The transfer ofinformation and
functionality into the hands of consumersdramatically altered cost structures and models of
servicedelivery in the industry and forced many financial servicesfirms to rethink how they add
value to their clients.
4 “The NonProfit Times/Kintera Online Giving Survey Show
Donors May Have Contributed $2 Billion,― The NonProfitTimes, February 17, 2004,
http://www.nptimes.com/enews/Feb04/news/news-0204_3.html.
5 Online Giving to Tsunami Disaster Relief Efforts Surpasses
U.S. Support of $350 Million, Kintera Estimates, Kinterapress release, January 3, 2005.
6 Website Back to Basics: Online Giving, Association of
Fundraising
Professionals,
May
27,
2005,http://www.afpnet.org/tier3_print.cfm?folder_id=893&content_item_id=20731.
7 Eleanor Sacks, 2005 Community Foundation Global Status
Report,
Worldwide
Initiatives
for
Grantmaker
Support(WINGS),
May
2005,http://www.wingsweb.org/information/publications_community.
http://www.downhi.com/doc/jgeK0xvj0z9K.html cfm.
8 Foundation Center statistics, April 2005,
http://fdncenter.org
9 The Columbus Foundation, 2003 Community Foundations
Survey,
http://www.columbusfoundation.org/GD/_gd_templates/pages/gdPageSecondary.aspx?page=38.
10 United Way of America,
http://national.unitedway.org/aboutuw.
11 United Jewish Communities, http://www.ujc.org. See also
Gary Tobin’s work on Jewish philanthropy in the U.S. at theInstitute for Jewish and Community
Research,http://www.jewishresearch.org/projects_philanthropy.htm.
12 Women’s Funding Network, http://www.wfnet.org/ and
Michael Anft, “Tapping Ethnic Wealth,― Chronicle of Phi-lanthropy, January 10, 2002. See
also Scott Nielsen, GabrielKasper, and Jessica Chao, “Democracy in Action,― Founda-tion
Free Document Search and Download
http://www.downhi.com/
News
and
Commentary,
Nov/Dec
2004,
http://www.foundationnews.org/CME/article.cfm?ID=3064.
13 Rick Cohen, Community-Based Public Foundations: Small
Beacons
for
Big
Ideas,
National
Committee
for
ResponsivePhilanthropy,
January
2004,http://www.ncrp.org/PDF/CBPF_Report.pdf.
14 Tracey A. Rutnik and Jessica Bearman, Giving
Together: a National Scan of Giving Circles and SharedGiving, Forum of Regional Associations of
Grantmakers,2005, http://209.219.39.150/givingcircles/downloads/Long report.pdf.
15 Social Venture Partners International, http://www.svpi.org.16 Xochitl Bada, Mexican Hometown
Associations, P.O.V.,
Latino
Public
Broadcasting,
August
2004,
http://www.pbs.org/pov/pov2003/thesixthsection/special_mexican.html.
17 Grantmakers in Health, A Profile of New Health Foundations,
May 2003,http://www.gih.org/usr_doc/2003_Profile_Report.pdf.
18 Fidelity Charitable Gift Fund,
http://www.charitablegift.org.
19 Kieran Beer, “It’s Better to Give,― Bloomberg Wealth
Manager, April 2005, pp 17- 21.
Page
55Lessons
from
the
future:
Strategic
implications
for
community foundations
http://www.downhi.com/doc/jgeK0xvj0z9K.html 49
20 Thomas Friedman, The World is Flat: A Brief History of the
Twenty-first Century, New York: Farrar, Straus and Giroux,2005.
21 The ratio is expected to drop from 5:1 to 3.5:1 workers to
retirees by 2020. The ratio captures the numbers of peoplepaying into Social Security and pension
funds to thenumber of people drawing from them. See analysis of U.S.Census data from the
Population Reference Bureau,http://www.prb.org.
22 Paola Scommegna, U.S. Growing Bigger, Older, and
More
Diverse,
Population
Reference
Bureau,
April2004,
http://www.prb.org/Template.cfm?Section=PRB&template=/ContentManagement/ContentDisplay.c
fm&ContentID=10201.
Free Document Search and Download
http://www.downhi.com/
23 “More Diversity, Slower Growth,― U.S. Census Bureau News,
U.S.
Census
Bureau,
March
18,
2004,http://www.census.gov/Press-Release/www/releases/archives/population/001720.html.
24 “More Diversity, Slower Growth,― U.S. Census Bureau.25 See William H. Frey,
“Minority Myth Vs. Reality,―\parAmerican Demographics, September 2004.
26 For example, international giving, an increasing part of
community foundation activity, is now subject to certainprovisions in the U.S. Patriot Act.
Foundations also havereported on the increased need to scrutinize any gifts forre-granting purposes,
out of concern for liability regardingthe actions of re-granting partners. Intellectual property lawand
copyright structures have changed dramatically with theadvent of the internet. Foundations have felt
these changesin many ways, from realizing that they may not own digitalpublishing rights for their
older annual reports to limita-tions on strategic initiatives involving corporate oracademic partners.
27 Kintera went public in 2003 and proceeded to purchase
several other firms focused on nonprofit and philanthropythroughout 2004. Other notable
mergers/alliances includethe 2005 merger of iapps and Bridgeline software and theStrategi
http://www.downhi.com/doc/jgeK0xvj0z9K.html
c Alliance announced by The Minneapolis
Founda-tion and Foundation Source in 2004. Other developmentsin this field include the entrance
of a new vendor, Collabor-ative Standards (purchased by Kintera in 2005); the roll-outof preferred
provider services from Community Founda-tions of America’s Technology Initiative; and an
initiative byCitibank to facilitate international disaster relief throughits ATMs.
28 Bloomberg Wealth Management, Fall 2004.29 Independent Sector, The New Nonprofit Almanac
and Desk
Reference, New York: Jossey-Bass, 2002.
30 Emmett Carson, “The Road Not Yet Traveled: A Community Foundation Movement for Social Justice,― speech atCommunity Foundations:
Symposium on a Global Movement,Berlin, Germany, December 2004. Carson, among others,has
emphasized the important leadership role of communityfoundations as social change agents in many
of his speechesand writings.
31 Our understanding of leadership is heavily influenced by
Ronald Heifetz’s Leadership Without Easy Answers, BelknapPress, September 1994.
Free Document Search and Download
http://www.downhi.com/
32 Ralph Hamilton, Julia Parzen, and Prue Brown, Community
Change Makers: The Leadership Roles of Community Foun-dations, Chapin Hall Center for
Children,
University
ofChicago,
2004,
http://www.chapinhall.org/article_abstract.aspx?ar=1366&L2=63&L3=110.
Page 5650 ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
This report was created in close partnership with manyothers in the community philanthropy field,
and its ideaswere built upon a rich foundation of research and analysisfrom dedicated scholars and
community practitioners.
Page 5751
Resources, Project history & credits, and Authors
Resources
There is a growing body of literature about community foundations and thelarger field of
community philanthropy. A number of organizations, includingWorldwide Initiatives for
Grantmaker Su
http://www.downhi.com/doc/jgeK0xvj0z9K.html
pport, the Nonprofit Sector
ResearchFund at the Aspen Institute, and the Transatlantic Community FoundationNetwork, have
developed extensive bibliographies on community foundations.Among the many resources
available, we have selected a few here that we foundespecially valuable in deepening our
understanding of the field, and that we be-lieve would be helpful resources for community
foundation leaders.
A Profile of New Health Foundations, Grantmakers in Health, May 2003,
http://www.gih.org/usr_doc/2003_Profile_Report.pdf. An analysis of the structures, roles,and
growth of healthcare conversion foundations in the United States.
An Agile Servant: Community Leadership by Community Foundations,
Richard Magat, ed., The Foundation Center, 1989. This is the classic text on communityfoundations,
including essays about their history, activities, and roles in communities, as wellas case studies
about community foundation practice.
Community-Based Public Foundations: Small Beacons for Big Ideas,
Rick
Cohen,
National
Committee
for
Responsive
Philanthropy
(NCRP),
January
2004,http://www.ncrp.org/PDF/CBPF_Report.pdf. A report profiling the status and approachesof
Free Document Search and Download
http://www.downhi.com/
nearly
200
progressive
“community-based
public
foundations―
identified
in
a
2002-2003survey by NCRP.
Community Change Makers: The Leadership Roles of CommunityFoundations, by Ralph Hamilton,
Julia Parzen, and Prue Brown, Chapin Hall Center
for
Children,
University
of
Chicago,
2004,http://www.chapinhall.org/article_abstract.aspx?ar=1366&L2=63&L3=110. A thoughtfullook
at the many ways that community foundations throughout the U.S. are developing andexpanding
their leadership roles in their communities beyond grantmaking.
Page 58ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
52
2005 Community Foundation Global Status Report, by Eleanor Sacks, Worldwide
Initiatives for Grantma
May
http://www.downhi.com/doc/jgeK0xvj0z9K.html ker Support (WINGS),
2005,http://www.wingsweb.org/information/publications_community.cfm.
A
comprehensiveoverview of the status and development of community foundations around the world
andcountry by country.
2003 Community Foundations Survey, The Columbus Foundation,
http://www.columbusfoundation.org/GD/_gd_templates/pages/gdPageSecondary.aspx?page=38.
The most recent results of a comprehensive survey of community foundationsin the United States
conducted by The Columbus Foundation since 1998.
Covering Rural Territory: A Framework of Rural Service Structures forCommunity Foundations,
Aspen Institute Community Strategies Group, 2004,
http://www.aspencsg.org/rdp/matrix. A guide for community foundations about how to usetheir
endowment building, grantmaking, and community-building tools to better serve ruralpopulations
and areas.
“Democracy in Action,― by Scott Nielsen, Gabriel Kasper, and Jessica Chao, Foundation
News
and
Commentary,
Nov/Dec
2004,
http://www.foundationnews.org/CME/article.cfm?ID=3064. An article examining the growth,
development, and prospects of identity-based focus funds in the United States.
Giving Together: A National Scan of Giving Circles and Shared Giving, Tracey
Free Document Search and Download
http://www.downhi.com/
A. Rutnik and Jessica Bearman, Forum of Regional Associations of Grantmakers (RAGs),2005,
http://209.219.39.150/givingcircles/downloads/Long report.pdf. A report docu-menting the results
of a national scan of giving circles—groups of individuals who pooltheir money and decide,
collectively, where to donate the resources—conducted by the NewVentures in Philanthropy
initiative of the Forum of RAGs.
Identifying the Patterns, Prospects, and Pitfalls in Community FoundationGrowth and Development,
by Kathryn Agard, Council of Michigan Foundations,
1992, http://www.cmif.org/Documents/IdentifyingThePatterns.pdf. This CMF study exam-ines how
community foundations develop over
http://www.downhi.com/doc/jgeK0xvj0z9K.html
time
and identifies a set of typical growthstages that they will go through during their life cycles.
Mexican Hometown Associations, Xochitl Bada, P.O.V., Latino Public Broadcasting,
August 2004, http://www.pbs.org/pov/pov2003/thesixthsection/special_mexican.html. Inthis report,
Bada, a sociologist from the University of Notre Dame, examines remittancegiving and the growing
movement of Mexican Hometown Associations.
Page 59Resources, Project history & credits, and Authors 53
Serving a Wider Community: Community Foundations’ Use of GeographicComponent Funds
and other Strategies and Structures to Cover Territory, by
Eleanor
Sacks,
WINGS-CF,
May
2002,http://www.wingsweb.org/information/downloads/serving_a_wider_community.pdf. Thispiece
assesses how community foundations can use affiliates and other structures to betterserve their
existing geographic territories and to expand into new areas.
Smart Growth: A Lifestage Model for Social Justice Philanthropy, Women’s
Funding
Network,
2003,
available
at
http://www.wfnet.org/documents/publications/smart-growth.pdf. A report and accompanying
workbook designed to help funders understand thephases of organizational development that are
typical of the lifecycle of growing women andgirls’ funds. The basic framework is also
informative for other types of community philan-thropy organizations.
Sowing the Seeds of Local Philanthropy: Two Decades in the Field ofCommunity Foundations,
Charles Stewart Mott Foundation, March 2001,
http://www.mott.org/publications/websites/cfp. In this highly regarded special report, theMott
Free Document Search and Download
http://www.downhi.com/
Foundation shares lessons and experiences from more than 20 years of working withcommunity
foundations.
Strengthening Community Foundations: Redefining the Opportunities,
Foundation
Strategy
Group
2003,http://www.foundationstrategy.com/fsg_whitepaper.html.
http://www.downhi.com/doc/jgeK0xvj0z9K.html
(FSG),
This
landmark
October
white
paper
documents FSG’s analysis of costs and
revenues for various services and activities at ninecommunity foundations, and explores the
implications of its findings for community foun-dation sustainability and competitiveness.
The Big Are Big and the Small Are Many: A View from the Community Foun-dation Field, by
Leslie Lilly, unpublished paper, December 2004,
http://www.cfsymposium.org/Docs/8c-Lilly.doc. This short paper by Lilly, presidentand CEO of
The Foundation for Appalachian Ohio, examines the divide between smalland large community
foundations in the United States and what the differences may meanfor the field.
“The Road Not Yet Traveled: A Community Foundation Movement for SocialJustice,― a
speech by Emmett Carson, December 2004. In this provocative speech at the
Symposium of Community Foundations in Berlin, Germany, Carson examines the stateof
community foundations and challenges them to think about whether they are part of amovement or
a field. Transcripts of the speech, along with other articles and talks by Carson,are available online
at http://www.minneapolisfoundation.org/about/news.htm#articles.
Page 60ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
54
We created this report in the same spirit in which we are encouraging com-munity foundations to
operate: in deep partnership. It was a joint effort of twoindependent consulting firms, working in
close collaboration with two of thenation’s leading foundations, with extensive input and
feedback from hundredsof community philanthropy practitioners.From the start, the project was not
designed as a typical research effort. Webegan at the Council on Foundations annual meeting in
Toronto in the springof 2004 by sitting down with about 20 leaders of the community
foundationfield. In the 18 months since then we have held more than 20 meetings andworkshops
and conducted dozens of interview http://www.downhi.com/doc/jgeK0xvj0z9K.html
s dedicated
Free Document Search and Download
http://www.downhi.com/
to the developmentof these ideas, including:• Two working meetings in Emeryville, California
(Summer/Fall
2004)•
Meeting
with
the
Council
on
Foundations
Community
FoundationsLeadership Team (CFLT) (September 2004)• Annual conference of Arizona
Grantmakers Forum (October 2004)• Board meeting of Asian Americans Pacific Islanders in
Philanthropy(October 2004)• CEO Retreat, plenary session, and two small salon discussions at
theCouncil on Foundations Community Foundations Conference in Min-neapolis (October
2004)• Two sessions at the annual conference of Grantmakers for Oregon andSW Washington
(October 2004)• Global Symposium on Community Foundations in Berlin (December2004)•
Community Foundations CEO retreat of the Council of MichiganFoundations (February 2005)•
ADNET Conference, Scottsdale, AZ (February 2005)
Project history & credits
Page 61Resources, Project history & credits, and Authors 55
• Three working group sessions hosted by the Mott and Ford foundationsin Emeryville, CA; Flint,
MI; and New York (March and April 2005)• Community philanthropy conference of the
European FoundationCentre Annual Conference, Budapest, Hungary ( June 2005)• Joint meeting
with the CFLT and representatives of CommunityFoundations of America ( June 2005)•
Community foundation CEO retreat of the Ohio Grantmakers Forum( July 2005)Throughout these
sessions, there have been literally scores of people bothinside and outside our organizations who
contributed generously to the cre-ation and development of the ideas in this report.We are
particularly grateful to our program officers from the Mott and Fordfoundations, Elan Garonzik and
Linetta Gilbert, for their invaluable leadership,insight, and patience throughout the project, and to
the executive leadership ofthe two foundations—Bill White, Susan Berresford, and Barry
Gaberman—for
their
continuing
support
http://www.downhi.com/doc/jgeK0xvj0z9K.html
and
engagement
in
this
w
ork. We also owe specialthanks to Suzanne
Feurt of the Council on Foundations; Jennifer Leonardof the Rochester Area Community
Foundation; and Kathy Merchant of TheGreater Cincinnati Foundation for generously sharing their
knowledge andcritical intelligence many times over the course of the project. And we wouldlike to
specifically thank Emmett Carson, Ralph Hamilton, Mark Kramer,Peter Pennekamp, Dorothy
Reynolds, Margaret Sellers-Walker, and DianaSieger for their thoughtful review of the final version
of this report.We cannot thank enough our colleagues at Blueprint Research & Design andthe
Free Document Search and Download
http://www.downhi.com/
Monitor Institute for their dedicated work on this project. In particular,Tina Joh and Amita
Govindaswamy were active and thoughtful partners incrafting the content and ideas in this report.
Lori Jones, Ken Fisher, and LoriShouldice provided steady administrative and logistical support
throughout.And our editorial and design team members—Jenny Johnston of Global Busi-ness
Network and Lily Robles and Julie Sherman of the Design Studio atMonitor—were responsible for
beautifully shaping this document.
Page 62ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
56
Karla Aaland, Fargo-MoorheadArea FoundationKatherine Acey, Astraea LesbianFoundation for
JusticeSheryl
Aikman,
CommunityFoundation
of
WesternNorth
CarolinaLois
Albrecht,
Duluth-SuperiorArea Community FoundationIvye Allen, MDCSteve Alley, CommunityFoundation
for
Southern
ArizonaJocelyn
Ancheta,
The
McKnightFoundationSherry
Anderson,
MarshallCommunity FoundationSusan Andrus, Tuscola CountyCommunity FoundationCarl
Anthony, Ford FoundationNancy Anthony, Oklahoma CityCommunity FoundationJosephine Bacon,
AkronCommunity FoundationBonnie Ballinger, BarryCommunity FoundationRini Banerjee, The
OverbrookFoundationAlison Barberi, GreenvilleArea Community FoundationRick Batyko, The
ClevelandFoundationJan
http://www.downhi.com/doc/jgeK0xvj0z9K.html
CountyCommunity
FoundationSusan
CountyCommunity
FoundationAndrew
Berresford,
Blau,
FordFoundationSharon
Global
et Bauer, Four
Bisher,
BusinessNetworkJennifer
Hillsdale
Bloswick,
MackinacIsland Community FoundationWilliam Boersma, Sturgis AreaCommunity FoundationSue
Bolde,
Leelanau
TownshipCommunity
FoundationMarsha
Bonner,
MarinCommunity
FoundationAnn Bova, CommunityFoundation of GreaterNew BritainJoyce Bove, The New
YorkCommunity TrustJames Bower, Stark CommunityFoundationKatie Braswell, TheCommunity
Foundation ofWest Chester/LibertyAmy Braun, Huron CountyCommunity FoundationCatherine
Brooks, AdirondackCommunity TrustKeith Burwell, Toledo CommunityFoundationBrian Byrnes,
The VermontCommunity FoundationPhyllis Campbell, The SeattleFoundationJohn Carreon,
Hancock CountyCommunity FoundationEmmett Carson, The MinneapolisFoundationElizabeth
Cherin, FremontArea Community FoundationTheresa Chimner, Allegan CountyCommunity
FoundationStephanie
Clohesy,
IndependentconsultantRobert
Collier,
Council
ofMichigan
Free Document Search and Download
http://www.downhi.com/
FoundationsMary Command, Williams GroupEileen Connolly-Keesler, OshkoshArea Community
FoundationKit Conroy, The New YorkCommunity TrustPhyllis Cook, JewishCommunity
EndowmentFundJacqueline Copeland-Carson,Edwards Memorial TrustNancy Cunningham ,
Funders forLesbian and Gay IssuesKimberly Cutlip, Scioto CountyArea FoundationSandy Daniels,
Johnson CountyCommunity FoundationSusan Brown Davis, CommunityFoundation Serving
Richmond &Central VirginiaWilliam Dawson, Otsego CountyCommunity FoundationCarla Dearing,
CommunityFoundations
FoundationHans
of
Dekker,
CommunityFoundation
for
CommunityFoundationLeslie
AmericaBarbara
The
the
Deerhake,Findlay-Hancock
CommunityFoundation
FoxValley
Dunford,
ExchangeTamera Durrence, TheColu
of
RegionJennifer
TheCleveland
New
CountyCommunity
JerseyCurt
Dowley,
FoundationTrinh
Detjen,
BerkshireTaconic
Duong,
Funding
http://www.downhi.com/doc/jgeK0xvj0z9K.html
mbus
FoundationRobert Eckardt, TheCleveland FoundationCheryl Elliott, Ann Arbor AreaCommunity
FoundationMaggie Evans-Rael, TaosCommunity FoundationPablo Farias, Ford FoundationDavid
Farley, AlbionCommunity FoundationLew Feldstein, New HampshireCharitable FoundationDavid
Fischer, CommunityFoundation of Tampa Bay
We do not have all of the names of the many others who contributed to eachof our workshops and
meetings, but the people noted below represent what webelieve is a nearly complete list of those
who helped to co-create the substanceof this report by giving us direct feedback and input in
working sessions andinterviews during the project:
Page 63Resources, Project history & credits, and Authors 57
Suzanne Feurt, Council onFoundationsBurt Feuss, PeninsulaCommunity FoundationMargaret
Flanagan, SouthernIllinois Community FoundationDebra Flannery, Dickinson AreaCommunity
FoundationCarol
Flatten,
Foundation
forSoutheast
TexasJames
Flavell,
Marin
CommunityFoundationDennis Fliehman, Capital RegionCommunity FoundationJulie Lynn Ford,
Council ofMichigan FoundationsLucille Ford, Ashland CountyCommunity FoundationEllen Foster,
The PhiladelphiaFoundationBrian Frederick, The CommunityFoundation of GreaterLorain CountyE.
Kristen Frederick,Community Foundation forthe Capital RegionTerri Lee Freeman,Community
Foundation for theNational Capital RegionRick Frost, The WinnipegFoundationMary Fry,
Roscommon
CountyCommunity
FoundationDeborah
Fugenschuh,
DonorsForum
of
WisconsinKirstin Fulkerson, Gulf CoastCommunity Foundation of VeniceKathy Gaalswyk,
Free Document Search and Download
http://www.downhi.com/
InitiativeFoundationBarry
Gaberman,
FordFoundationIrena
CommunityFoundationElan
Garonzik,
CoshoctonFoundationElizabeth
Gawron,
C.S.
The
Gadaj,
Bilgoraj
MottFoundationJames
Cape
CodFoundationLinetta
Gauerke,
Gilbert,
Ford
FoundationWilliam Ginsberg, TheCommunity Foundation forGreater New HavenPilar Gonz
http://www.downhi.com/doc/jgeK0xvj0z9K.html
ales,
ChangemakersWarren
Goodell,
SouthfieldCommunity FoundationHelen Goodman, NewHampshire CharitableFoundationDiane
Gordon, The GreaterWayne County FoundationGita Gulati-Partee,Community Foundation
ofGreater
GreensboroRobert
Habicht,
MichiganGateway
Community
Hammersmith,
LenaweeCommunity
FoundationRalph
Hamilton,
ChildrenRon
Hanft,
ExchangeKaying
Hang,
Funding
MinnesotaFoundationSid
AlliancemagazineDavid
Hartman,
Hatfield,
Marin
FoundationSuann
Chapin
HallCenter
BluecrossBlueshield
CommunityFoundationCaroline
KalamazooCommunity
FoundationTom
for
of
Hartnell,
Hay,
The
PittsburghFoundationCrystal Hayling, Blue Shield ofCalifornia FoundationJames Head, The San
FranciscoFoundationPeter
Hero,
CommunityFoundation
Silicon
ValleySusan
Herr,
CommunityFoundations of AmericaYarice Hidalgo, Puerto RicoCommunity FoundationBill Ong
Hing, RosenbergFoundationJack Hopkins, KalamazooCommunity FoundationKathi Horton,
CommunityFoundation of Greater FlintMichael Howe, East BayCommunity FoundationShannon
Sadler Hull, Community Foundation for PalmBeach & Martin CountiesMary Sue Hyslop,
KeweenawCommunity FoundationAni Hurwitz, The New YorkCommunity TrustKathy Im, The
John D. &Catherine T. MacArthurFoundationMary Jalonick, The DallasFoundationBen Johnson,
The
Greater
NewOrleans
FoundationLarry
Johnson,
SangamonCounty
Community
FoundationRenee Johnston, SaginawCommunity FoundationFelecia Jones, Black BeltCommunity
FoundationRob Jordan, Fremont AreaCommunity FoundationSteven R. Joul, CentralMinnesota
CommunityFoundationAmber
FoundationLinda
Kimbel,
Khan,
Cadillac
TheCommunications
AreaCommunity
NetworkBarbara
FoundationCindy
S.
Kibbe,
Skoll
Kissin,
The
GreaterBridgeport Area FoundationRichard Kiy, InternationalCommunity FoundationMelissa
Kleptz, The TroyFoundationJim Klusman, Greater LafayetteCommunity FoundationColleen Knight,
Branch CountyCommunity Foundati
http://www.downhi.com/doc/jgeK0xvj0z9K.html
onMark
Kramer, FoundationStrategy GroupDori Kreiger, Council onFoundationsDouglas Kridler, The
ColumbusFoundationDavid Kronberg, Greater LowellCommunity FoundationColin Lacon,
Free Document Search and Download
http://www.downhi.com/
Northern CaliforniaGrantmakersGary LaPlant, CommunityFoundation of the UpperPeninsulaJ.
Augustin Landa, LoterÃ-aNacional para la AsistenciaPúblicaJudy Larson, SouthwestMinnesota
FoundationValerie Lee, The MinneapolisFoundationJennifer Leonard, Rochester AreaCommunity
FoundationWendy Lewis Jackson, GrandRapids Community FoundationPat Lile, Arkansas
CommunityFoundationLeslie Lilly, The Foundation forAppalachian OhioRose Lincoln, The
GreaterTacoma Community FoundationDavid Lindberg, Council ofMichigan FoundationsTracy
Locke, Council onFoundationsKelly Lucas, CommunityFoundation of SouthWood CountyJoe
Lumarda, CaliforniaCommunity FoundationJames Magowan, CommunityFoundation for Northern
IrelandIdelisse Malave, TidesFoundationJanet Manning, Lapeer CountyCommunity FundJeanette
Mansour, C.S. MottFoundationRobert Martin, CommunityPlanning & ResearchSteven Mayer,
EffectiveCommunities
ProjectJudy
McGuigan,Community
Foundation
McCormick,
The
forMuskegon
DaytonFoundationChris
CountyWinsome
Ann
McIntosh,
Rachel’sNetworkKathy Merchant, The GreaterCincinnati FoundationRoger Merrifield, Bay
AreaCommunity FoundationDonnell Mersereau, Council ofMichigan FoundationsJuraj Mesik,
World Bank CivilSociety GroupGretchen Minekime, TheCommunity Foundation ServingBoulder
CountyChar Mollison, Council onFoundationsHelen Monroe, EndowmentDevelopment Institute
Page 64ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
58
Kathleen
Moxon,
FoundationJoan
Humboldt
Nagelkirk,
AreaFoundationKevin
Sanilac
Murphy,
CountyCommunity
Berks
CountyCommunity
FoundationSteven
Newcom,
HeadwatersFoundation for JusticeMaureen Nicholson,Petoskey-Harbor Springs AreaCommunity
Fou
http://www.downhi.com/doc/jgeK0xvj0z9K.html
ndationMariam
Noland,
CommunityFoundation for SoutheasternMichiganCao K. O, Asian AmericanFederation of New
YorkRick O’Farrell, M & M AreaCommunity FoundationGary Officer, Associated
BlackCharities of MDDarcy Oman, The CommunityFoundation Serving Richmond &Central
VirginiaRuben Orduña, BostonFoundationWilliam David Osmer, GreaterEverett Community
FoundationAlan Pardini, League of CaliforniaCommunity FoundationsKari Pardoe, Council of
MichiganFoundationsMike Parks, The DaytonFoundationMonica Patten, CommunityFoundations
of
CanadaPeter
Pennekamp,
HumboldtArea
FoundationJoy
Persall,
Native
Americans
Free Document Search and Download
http://www.downhi.com/
inPhilanthropyThomas
Peters,
MarinCommunity
FoundationRobin
Pfeil,
SpringfieldFoundationAlicia Philipp, The CommunityFoundation for Greater AtlantaLisa Philp, JP
MorganPrivate BankJanet Pry, Bucyrus AreaCommunity FoundationPatricia Quick, Stark
CommunityFoundationAmy
Rabbino,
JewishCommunity
Endowment
FundDonna
Rader,
TheWinston-Salem FoundationHugh Ralston, Ventura CountyCommunity FoundationHenry Ramos,
Mauer KunstConsultingStan Rathbun, Mt. Pleasant AreaCommunity FoundationCristina Regalado,
The CaliforniaWellness FoundationDottie Reynolds, IndependentconsultantCarleen Rhodes, The
Saint
PaulFoundationRonn
CommunityFoundation
of
CommunityFoundation
of
FoundationKimberly
Richard,
Roberson,
The
ClevelandFoundationC.
LouisvilleSharon
Dennis
Riggs,
The
Risk
Stark,
HeritageFund—The
BartholomewCountySherry
Ristau,
SouthwestMinnesota
C.S.
MottFoundationCarla
Roberts,
ArizonaCommunity
FoundationHolly Robinson, YES! (Youth forEnvironmental Sanity)Julie Rogers, Meyer
FoundationC.J.
Liu
Rosenblatt,
SocialVenture
Partners
InternationalGloria
Royal,
KalamazooCommunity FoundationGiles Ruck, Scottish CommunityFoundationEmily Jones
Rushing, TheCommunity Foundation ofGreater BirminghamPeggy Saika, Asian Americans/Pacific
Islanders In PhilanthropyHolly Sampson,
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Duluth-SuperiorArea Community FoundationRoger Samuel, CommunityFoundation of Greater
FlintLynn Sargi, The ClevelandFoundationShelly Schadewald, The JacksonCounty Community
FoundationHank Schmelzer, MaineCommunity FoundationRick Schoff, Foundation CenterAlison
Schumacher, IndianaGrantmakers AllianceHeather Scott, Council onFoundationsChristine Searson,
The Saint PaulFoundationMargaret Sellers-Walker, GrandRapids Community FoundationMichael
Seltzer, New YorkRegional Association ofGrantmakersKaren Yarza Sieber, FundaciónComunitaria
de la Frontera NortePamela H. Siegenthaler, RichlandCounty FoundationCathy Silak, Idaho
CommunityFoundationDiana Sieger, Grand RapidsCommunity FoundationFred Silverman,
MarinCommunity FoundationCarol Siyahi-Hicks, The DaytonFoundationNina Smart, Jacobs
FamilyFoundationErik Smith, Global BusinessNetworkMaureen Smyth, C.S. MottFoundationSuzy
Sonenberg, Long IslandCommunity FoundationDenise Spencer, Midland AreaCommunity
FoundationSterling Speirn, PeninsulaCommunity FoundationKurrin Spray, PeninsulaCommunity
FoundationSusan
Springgate,
KalamazooCommunity
FoundationAlta
Starr,
New
WorldFoundationJane Stevenson, Door CountyCommunity FoundationMolly Stearns, The
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SeattleFoundationNancy Straw, West CentralInitiativeShannon St. John, TriangleCommunity
FoundationAnn Irish Tabor, Grand HavenArea Community FoundationRobert Tambellini,
CharlevoixCounty Community FoundationKristin Theisen, CommunityFoundation of Monroe
CountyJanet Topolsky, Aspen InstituteCommunity Strategies GroupTina Travis, Gratiot
CountyCommunity FoundationR. Andrew Swinney, ThePhiladelphia FoundationDave Uffelmann,
CommunityFoundations of CanadaSusan Urano, Athens FoundationWilliam R. Vanderbilt,
TheCommunity Foundation of theHolland/Zeeland AreaRobert Vazquez-Pacheco,Funders for
Lesbian and GayIssuesSue Atkins
Wagner, ChippewaCounty Community FoundationR
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Whitehurst,
ArizonaCommunity
ichard Ward, Boston FoundationDeborah
FoundationThomas
Wilcox,
BaltimoreCommunity
FoundationReggie Williams, San AntonioArea FoundationMary Wiseman, Foundation forthe
Tri-State CommunityNancy Washington, ThePittsburgh FoundationBill White, C.S. Mott
FoundationJane
Winters,
Parkersburg
AreaCommunity
FoundationStephanie
Wolf,
SolanoCommunity FoundationRobert Woodbury, MaineCommunity FoundationPatricia Wright,
CommunityFoundation of Dutchess CountyTimothy Wu, Small ChangeFoundationJeffrey G. Yost,
NebraskaCommunity FoundationRichard Ylvisaker, CommunityFoundation of the NortheastIowa
RegionGreg Zerlaut, Fremont AreaCommunity Foundation
Page 65Resources, Project history & credits, and Authors 59
LUCY BERNHOLZ
Lucy Bernholz is the founder and president of Blueprint Research & DesignInc., a strategy
consulting firm specializing in program research and design forphilanthropic foundations. She has
worked as a program officer and consultantto foundations for 15 years. As a community foundation
program officer shewas responsible for developing and managing grant programs in the arts
andhumanities, community development, education, environment, health, historicpreservation, and
human services. She also supervised the implementationof special initiatives focused on
neighborhood development, lesbian and gaycommunity issues, management assistance, citizenship,
and early adolescence.She is a noted analyst of the philanthropic industry and has published
numer-ous articles in the trade and general press, edited collections, and scholarlyjournals. Her most
recent book, Creating Philanthropic Capital Markets: TheDeliberate Evolution, was published by
John Wiley & Sons in 2004. In 2003-2004, she was a visiting scholar at Stanford University’s
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Graduate School ofBusiness, where she began work on a new book. Lucy earned an M.A. andPh.D.
from Stanford
http://www.downhi.com/doc/jgeK0xvj0z9K.html
University and a B.A. from
Yale, where she captainedthe lacrosse team and played field hockey. She can be reached via email
atLucy@blueprintrd.com.
KATHERINE FULTON
Katherine Fulton is president of the Monitor Institute and a partner of theMonitor Group. Her career
path has been shaped by two passionate interests:the use of private resources for public purposes,
and the connection betweenleadership and learning. She has explored these themes through
leadershippositions in organizational consulting and journalism, and through teachingand volunteer
service. Prior to moving to the Monitor Institute, Katherinewas the co-head of the consulting
practice at another Monitor Group com-pany, Global Business Network. During much of the past
decade at GBN,she helped organizations in more than 12 industries manage more skillfullyin the
face of increasing uncertainty. In recent years, her consulting practiceincreasingly focused on the
future of philanthropy and nonprofits, and she
Authors
Page 66ON THE BRINK OF NEW PROMISE: THE FUTURE OF U.S. COMMUNITY
FOUNDATIONS
60
has given more than three dozen major speeches on the subject. She is the co-author of two new
publications, Looking Out for the Future: An Orientation forTwenty-First Century Philanthropists
and What If? The Art of Scenario Thinkingfor Nonprofits. Her efforts have won her both a Nieman
Fellowship at HarvardUniversity and a Lyndhurst Foundation prize for community service, and
herinnovative course design at Duke University was featured in Time magazine.She is a Phi Beta
Kappa graduate of Harvard College, where she was alsothe captain of the women’s basketball
team. She can be reached via email atKatherine_Fulton@monitor.com.
GABRIEL KASPER
Gabriel Kasper joined the Monitor Institute in 2004. He is a strategist withextensive experience
working
with
foundations
and
other
social
changeorganizations.
Befor
http://www.downhi.com/doc/jgeK0xvj0z9K.html e coming to Monitor, he was the program officer
forphilanthropy at the David and Lucile Packard Foundation, where he was re-sponsible for
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developing the foundation’s strategy and managing its grantmak-ing to increase the
effectiveness of philanthropy as a field. Gabriel also spenttwo years managing neighborhood
programs at a small community foundationin Berkeley and has nearly 10 years of experience as a
consultant, providingapplied research, program design, and strategic advising services for
foun-dations, nonprofits, and corporations. He has written numerous articles ontopics including
philanthropic innovation, diversity in philanthropy, founda-tion collaboration, community
development, and the growth of philanthropyin Latino and other identity-based communities. He is
a graduate of WesleyanUniversity and holds a master’s in city planning from the University of
Cali-fornia at Berkeley, where he was captain of the men’s ultimate frisbee team. Hecan be
reached via email at Gabriel_Kasper@monitor.com.
Page 67BLUEPRINT RESEARCH & DESIGN INC. is a strategy consulting firm that specializes
inhelping foundations and other philanthropic entities capture, use, and share information inways
that will amplify the impact of their philanthropic practices. For more information, see
www.blueprintrd.com.
MONITOR INSTITUTE is part of the Monitor Group, a family of professional service
firmsemploying more than 1,000 professionals who operate in a closely-linked network of 29
officesaround the globe. Monitor Institute leverages the intellectual, human, and financial
resourcesof
Monitor
Group
to
customize
and
innovate
strategies
used
by
private
actors—citizens,nonprofit organizations, philanthropists, and corporations—to solve complex
socialchallenges. For more information, see www.monitorinstitute.com.
Page 68U.S. community foundations have entered a pivotal new era. The generationah
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ead, from 2005 to 2025, will be marked by
dynamic change within andaround community philanthropy. Every individual community
foundation—andthe field as a whole—will face new choices. The path ahead is full of
promise.Unfortunately, that promise will not be easily realized.This report on the future of U.S.
community foundations is a far-reachingsynthesis of the changing environment for community
philanthropy and itsimplications for community foundations. A companion discussion guide
andother resources will be available at www.communityphilanthropy.org to helpindividual
community foundations apply the lessons of this document to thespecific circumstances of their
communities and organizations.
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