Helping Community Foundations Adapt for the Future

Community foundations today operate in an environment that is dramatically different from the one in which many of their current practices and structures were developed. After all, back when the Cleveland Foundation was first established in 1914, the U.S. telephone service had just been launched and supermarkets were only beginning to pop up in neighborhoods throughout the country.

Since then, the pace of change has continued to accelerate, and a dizzying array of global and community trends—unprecedented demographic shifts, new technologies, economic uncertainty, and growing competition, to name just a few—are radically reshaping local landscapes.

The field of community philanthropy is changing too. Alternatives to community foundations abound, and often have the advantage of being built to target specific populations or to harness new technologies from the outset. The increasingly crowded field now includes local United Way branches, private foundations, charitable gift funds, volunteer organizations, identity-based funds, online giving platforms, community-development finance institutions, and organized giving circles, among many others.

And donors have other new options for effecting social change as well. They can increasingly influence political and electoral outcomes through political-action committees or support socially responsible businesses and make “impact investments” in enterprises that produce both social and financial returns.

In the midst of all of this dynamism, the centennial milestone provides an opportune moment to look ahead and consider what change may be necessary for community foundations to remain relevant for the next hundred years.

Some community foundations are already beginning to adapt. The Telluride Foundation in Colorado, for example, is building the local economy by managing a “venture accelerator” that helps incubate early-stage and start-up businesses. It provides entrepreneurs with their first funds and connects them with local venture capitalists and angel investors as mentors, coaches, and financiers who can help them expand. Other community foundations are experimenting with new roles like facilitating community dialogue, advocating for policy change, and leading local planning processes.

This experimentation and variety is an important sign of promise. But in the midst of a rapidly shifting world, the question is: are community foundations changing enough?

For some—especially small community foundations—adaptation will be a matter of survival. Necessity will demand that they innovate and tailor their services to demonstrate their value to the community and raise the resources needed to sustain their operations.

But even bigger and more stable institutions will need to adapt to keep up with the sheer pace of community change. If community foundations can’t effectively meet the shifting needs of local donors, nonprofits, and residents, they risk losing their relevance and standing in their communities.

CEP’s recent survey of over 6,000 donors to community foundations, What Donors Value: How Community Foundations Can Increase Donor Satisfaction, Referrals, and Future Giving, provides us with great insight into what is working within community foundations, and what is not. But it also leads us to an interesting question for the field: will the systems and practices that are helping community foundations thrive right now be the best ones for meeting the needs of their users in the future?

To help community philanthropy organizations answer this question, the Monitor Institute has been working with community foundations and other place-based funders on a new set of tools that enable local groups to think creatively and adapt to their changing context. The resulting What’s Next for Community Philanthropy toolkit focuses on four key approaches for helping organizations open up their thinking:

Look outward. Community philanthropy organizations will benefit from getting better at tracking emerging global and regional trends and making sense of what they might mean for local communities. At the same time, they will need to build a stronger understanding of what groups already serve their communities and the roles they play.

Look around. Innovation doesn’t need to be completely new and original; it just needs to be new to a particular community. By simply looking at “bright spots” already emerging at other foundations, nonprofits, and businesses around the world and copying or adapting those approaches, community philanthropy organizations can get a good start on introducing new ways to serve their communities.

Look inward. Traditional orthodoxies about “how things are done” can often get in the way of exploring productive new approaches. Some orthodoxies may plague an entire field, while others are unique to individual organizations and require more introspective examination. Community groups can focus on their own practices, break free from unproductive assumptions, and build a portfolio of roles that are right for their organizations and communities.

Take action. With a clearer sense of what is possible, community foundations can deliberately try to generate new services and programs and then prototype those that show real promise. This might mean rethinking how they play roles that are core to the organization today, or it might instead mean taking ideas that are on the margins now but could become more important in the future.

If community foundations hope to live up to their potential, they will need to innovate and adapt. Place by place, they will need to figure out what to hold onto, what to let go of, and what to create anew to better meet the evolving needs of their donors and constituents. In the process, the lines between community foundations and other community philanthropy organizations will probably continue to blur.

Each organization will need to creatively reimagine how it provides value to the community—and then keep reimagining it, because the world isn’t going to stop changing. And the community philanthropy organizations that truly flourish will be the groups that can adapt and innovate regularly.

For more information about the What’s Next for Community Philanthropy initiative, visit monitorinstitute.com/communityphilanthropy.

Gabriel Kasper is a senior manager at the Monitor Institute, a part of Deloitte Consulting LLP. Megan Schumann is a senior consultant in the Monitor Institute’s Arlington office.

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