Fall 2008
Community Philanthropy: Leading and
Collaborating for the Greater Good
By Maya Petrovic
This year in Minnesota a new experiment on leadership in community philanthropy is taking place. The Minnesota Council on Foundations and eight of its community foundation members, along with Donors Forum of Wisconsin and three of its members, are partnering in the Superior Community Leadership Network.
The network's goal is to explore how community philanthropies can serve as a catalyzing force that create a better future for the entire community by inclusively uniting people, institutions and resources; addressing the community's most critical or persistent issues; and producing significant, widely shared and lasting results. No small task. But where did all this begin and how did we get here?
History of Community Giving
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The Early Childhood/Child Care work group of the Family Economic Success Initiative helps job seekers and workers
find and afford dependable, convenient and appropriate child care. This program is facilitated by West Central Initiative.
Photo courtesy of West Central Initiative.
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As America grew and immigrants flocked to the New World, they sought familiar settings in their brand-new environment. Moving to familiar terrains and climates and living among people of common heritage and language made their transition much easier.
As these newcomers formed larger groups, they developed a strong sense of community and identity. They helped one another in times of despair and trouble. They favored fellow community members in matters of finance, employment and business.
In addition to sharing cultural similarities, people living in the same geography had a natural stake in each other's well-being and in the well-being of the community as a whole. As residents grew closer, they helped each other more and more. They also joined together to remedy social problems.
In short, they took care of their own. They also laid the groundwork for modern community philanthropy.
Growth and Change in Community Philanthropy
Throughout the 20th century, community philanthropy became increasingly organized. Major community foundations sprouted and spread across the nation. After World War II, the number of community foundations established each year in the United States steadily increased, until reaching a zenith in the mid-1990s. The Foundation Center reports that in 1985 there were 250 community foundations in the U.S. Twenty years later that number had climbed to 750.
But today's community foundations find themselves in an environment unlike that of earlier years. The world of philanthropy is experiencing profound change, and its members are taking notice.
CFLeads, an organization devoted to connecting and mobilizing community foundations to build thriving communities, the national Council on Foundations, and other philanthropic leaders have teamed up to analyze the current state of community foundations in the United States. One recent research study and report, On the Brink of New Promise: The Future of U.S. Community Foundations (PDF), describes the current environment for U.S. community foundations as complex, crowded and competitive. Economic pressures, demographic changes, and legal and regulatory changes further complicate the landscape.
The Minnesota Council on Foundations and Donors Forum of Wisconsin embraced the findings of the report and sought to become one of two national pilot projects undertaken by CFLeads. And so the Superior Community Leadership Network was formed.
Understanding Changes, Challenges
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Cindy Ballard |
For the past 17 years, Cindy Ballard, executive director of CFLeads, has led the effort to build leadership capacity in community foundations. She insists that a strong, driven initiative toward community leadership is vital. But why exactly do community foundations need to become community leaders? And why now?
First, Ballard says, it's about survival — remaining relevant in an environment where individuals can use technology to directly access and be better informed about organizations of interest. Furthermore, the entry of big corporate players such as Fidelity and Merrill Lynch is applying pressure on foundations to adapt.
Companies have the capacity and resources to conduct financial transactions and other philanthropic administrative functions very quickly and cheaply. "They're fabulous check writers, if a check is all you really want," says Ballard. "If they [community foundations] can't compete in processing transactions and check writing, then in order to remain salient, they need to do some hard thinking about how to remain relevant."
Secondly, Ballard attributes the current paradigm shift to the will and aspirations of individuals involved in community philanthropy. She says that their desire to help communities thrive is perhaps an even stronger catalyst for change than external market forces. After working with hundreds of community foundations, Ballard has recognized that individuals in community philanthropy have chosen their work for deep, altruistic reasons, to develop strategies that focus on common goals. "They truly want to have a greater impact," she explains.
Lastly, Ballard asserts that changes in society have left large voids in community leadership across the nation. Communities are changing at unprecedented rates due to globalization, demographic shifts and a drastic increase in mobility for people and businesses in the information age. Entire industries are becoming obsolete and disappearing. Outsourcing and the influx of immigrants into rural and urban areas are changing the business and societal landscapes.
Today business interests are no longer restricted to specific geographic areas and are increasingly spreading out across the country and the world. Ballard points out that, as these shifts occur, community leadership becomes a casualty. "Leadership, as we traditionally have experienced it from our community's business and civic leaders, has eroded," she explains. "The concept of the town hall meeting and the public square — what was quintessential America — does not exist anymore."
Ballard asks, "Where are people from varying sectors meeting? Who will form the coalitions that will make things happen? Who will cross the sectors whose interests are connected to other groups?" The answer, she says, is community foundations. "They need to promote the ‘public space.' They need to be that organization whose mandate is as broad as the community itself."
Ballard sees this shift in strategy not as an option but as a necessity. It worries her to think of a future without this vision being realized. She believes a failure to achieve this mission may very well lead to community foundations and nonprofit organizations becoming powerless and increasingly marginalized.
"Nonprofits and philanthropic organizations are keepers of the social compact," says Ballard. "It is our responsibility to take care of each other, as residents, as citizens, as neighbors. We need community foundations to be robust and hold the interest of the entire community. We need them to be leaders."
Minnesota Leaders Forge New Paths
The leaders of community and public foundations in Minnesota are well aware of the challenges and opportunities articulated by Ballard. Developing effective leadership in community philanthropy sometimes requires a complete transformation of strategy and the creation of new paradigms.
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Lauren Segal |
Four years ago the board of directors of Greater Twin Cities United Way displayed strong leadership while making some very difficult decisions. The board agreed that it was in the community's best interest to devote more United Way resources to fewer issues, which meant the elimination of funding for certain long-time programs.
Lauren Segal, president and CEO of Greater Twin Cities United Way, explains her organization's shift in focus: "Funding agencies has been our sole strategy for 90 years. While critically important to us, it was not sufficient. If an agency is doing well, great! But we wanted to be about impact on community. This turned our historical model upside down."
Fully aware of the consequences of changes, but with the community's greater good in mind, United Way eased the blow by offering affected organizations an 18-month buffer period before funding ceased. Segal admits, "Our great change was, for some, a great stress. At the end of every dollar that we have distributed, there is a human life connected to it. We needed to be thoughtful and compassionate while making changes."
When United Way leaders chose to concentrate significant resources on three issues they believed most important for the community — basic needs, health and independence, and children and families — donors expressed appreciation for the decision's resulting impact. Segal says the response from donors was more positive than anticipated. Donors told her, "Bravo! We feel like we've been giving and giving, and things didn't seem to change."
Filling the Community Leadership Gap
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Carleen Rhodes |
As a foundation becomes a leader, it must willingly take on enormous levels of responsibility and accountability. Carleen Rhodes, CEO and president of Minnesota Community Foundation and The Saint Paul Foundation, explains, "Need for leadership is a critical issue. There is a gap in community leadership. Government is stretched. The issues community foundations are dealing with in the community are becoming critical and pressing. It's becoming more dire." As government resources and efforts are spread ever thinner, and gaps in social welfare damage communities, the presence of competent and compassionate leadership becomes absolutely vital.
Rhodes asserts, "We can bring different sectors together. Today's problems will not be solved by any one sector alone." To best serve the community, foundations may collaborate or even merge with other entities to expand ability and scope. They may disband ineffective relationships, or they may develop complicated partnerships with a dozen organizations to tackle complex initiatives. They may take actions and adopt philosophies that maximize social impact, strengthen the community, and solidify their role as permanent member, protector and champion of the people.
Rhodes adds that good leaders are also often good team builders: "Community foundations are well-positioned players to begin the process of convening." The Saint Paul Foundation has recently done just that with its participation in Heading Home Minnesota, a collaborative statewide effort to end homelessness. Rhodes and James Frey, president of the Frey Foundation, co-chair the steering committee. The Minneapolis Foundation, The McKnight Foundation, Wilder Foundation, Travelers Foundation and Greater Twin Cities United Way are part of this effort, along with many businesses and existing homelessness initiatives at the city, county and state level.
"We as a sector need to work smarter as colleagues and co-problem solvers," says Rhodes. "It's daunting, but you have to start. If you are working on such issues, you may feel alone. Working collaboratively, we can reduce isolation, increase the potential to solve problems and have greater impact."
Sectors Working in Collaboration
For community foundations to be solid leaders, they must strategically choose, craft, and time their social change efforts. "We can't stay in the same old comfortable place. We need to move with our partners and with our community," says Sandra Vargas, president and CEO of The Minneapolis Foundation.
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Sandy Vargas |
Vargas notes that The Minneapolis Foundation is redefining its role in the community, striving to be a stronger community leader and partner in addition to grantmaker. The foundation's new strategy focuses on four key initiatives: grow philanthropy by proactively engaging and forming stronger relationships with donors; focus on education, with an emphasis on transforming Minneapolis public schools and getting parents more involved; address economic vitality issues, including immigrant workers and their impact on the economy, homelessness, unemployment and the current state of the housing and lending markets; and engage in community action, building social capital, being a strong advocate for the underserved and building the social fabric of communities.
Vargas plans to conduct listening sessions with donors, former trustees, past board members and community leaders. Together, she says, they will refine themes, focus on fewer issues, engage donors and create metrics to report impact.
It is the foundation's duty to adopt whatever role necessary to ensure that the best interests of the community are being met now and in the future. For Vargas and her organization, putting community first is key, even when it means tackling daunting and complex social problems that are very expensive to remedy.
A case in point is closing the achievement gap, particularly for students entering the first grade. The Minneapolis Foundation has advocated for statewide funding for all-day, every-day kindergarten. While the idea meets with strong resistance from some quarters because of the expense, the argument is powerful that properly educating our children should take precedence. Vargas draws an analogy with venture capitalist strategies: investing in our children today will pay major dividends tomorrow.
Understanding Greater Minnesota Needs
In 1986, The McKnight Foundation had the vision to invest in Greater Minnesota communities. That's when the organization established the Minnesota Initiative Funds, which are now six independent community foundations serving six rural regions of Minnesota. To date, McKnight has granted around $200 million to the foundations. They have translated those dollars into 2,800 business loans totaling over $130 million, and made a combined 12,000 grants totaling $91 million.
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Nancy Straw |
West Central Initiative (WCI) is one of the six regional foundations that is making Greater Minnesota stronger and more prosperous. Working with nine counties and 83 communities, Nancy Straw, WCI president, believes that intimate knowledge of and extraordinary familiarity with the individual communities one serves are absolute musts in order to execute effective philanthropic strategies.
She believes this in-depth understanding of the community leads to knowing exactly where to go and who to talk to in order to achieve a community's goals. Also, when people representing a diverse cross-section of a community are linked, and a foundation is fused into society, communal richness is realized. "Our strategic plan is in constant review, largely defined by the people in our region," explains Straw.
Straw points out that WCI strategy is focused on maximizing regional impact. Grantmaking is not seen as a grant-by-grant, need-by-need process. Rather, it is a coordinated funding effort to achieve optimal regional benefits.
She adds that success also lies in participation and collaboration with communities. For example, for the Family Economic Success initiative, a regional effort that aims to remove barriers to economic prosperity for low income families, WCI invited every possible organization to participate in the endeavor. Everyone involved has noticed the value in working together.
WCI received a grant from the Annie E. Casey Foundation to convene the 30 participants. The in-person interaction with so many different faces of the region created a wealth of knowledge and perspective. WCI gathered and shared regional data, which the groups used to select goals and gain invaluable insight into the region and its communities.
This level of collaboration typifies WCI's strategy going forward, one of intense cooperation and group thinking. "We are actively engaged in what we fund," says Straw.
Unleashing Shared Potential
Whether meeting community needs in Greater Minnesota or in the Twin Cities, community foundations are engaging in unprecedented levels of cooperation and collaboration. The Minneapolis Founda-tion, The Saint Paul Foundation and West Central Initiative are all participants in the Superior Community Leadership Network (CLN) led by a team from CFLeads.
CLNs are nationwide initiatives of peer learning groups working on real community leadership issues, addressing internal and external challenges to effectiveness and impact. In these networks, community foundations learn from each other, focusing on any and all issues and sharing successes and failures. They engage one another in real-time problem solving, exploring ways to build their foundations' overall readiness and capacity for community leadership.
Straw says her foundation tends to feel geographically removed from Minnesota's other philanthropic organizations; the CLN gives her more opportunities to dialogue with them. "We learn so much more when we go outside our boundaries," she adds. "This new spirit of teamwork and dialogue is providing community foundations with an entirely new level of knowledge and understanding."
Vargas, too, sees local philanthropy and leadership becoming more and more collaborative. The bottom line, she says, is that Minnesotans are very generous. She cites the response to the 35W bridge collapse as an example. When the emergency responders were gone, the community needed money. The United Way, The Saint Paul Foundation, The Minneapolis Foundation and other community foundations stepped in, and a collaboration fund was created. Vargas explains, "We [community foundations] were the natural choice. We were in the position to partner. We knew how to be transparent and manage and distribute the money thoughtfully. The entire effort was healthy to see. No territorialism. The community benefited."
Rhodes at The Saint Paul Foundation sees the future as bursting with opportunity. She envisions all philanthropic organizations working together for a common good, be they partner or competitor. "We in the community philanthropy field were sold a position that we were competitors. I believe that this is not the case." She thinks if all players share a community-first mindset, then cooperation will flourish. Working together on challenging issues will reduce the isolation groups may sometimes feel.
She also feels that working together increases their ability to solve more of society's problems and increase their impact. Rhodes concludes, "We're at the beginning stages of understanding how to unleash our shared potential. We [community foundations] are the best positioned. Respect boundaries? No! We want to work with you. More philanthropy is good philanthropy. We will all benefit."
Extra Assistance for Small Communities
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Bill Bleckwehl |
How can a small, non-staffed community foundation be active and successful in the community? At the Northfield Area Foundation, a relatively small foundation with an endowment of just over $1 million, the 14-member volunteer board of directors is responsible for everything, from long-term strategizing to "stamp licking," says Bill Bleckwehl, board chair.
He and other board members can focus on strategic planning and working with the local community thanks to help from the Minnesota Community Foundation. The organization's Community Funds Program handles the financial side of philanthropy for many of the state’s small community foundations, allowing them to focus on their core competencies. The program oversees the collection, investment and allocation of each foundation's funds and provides other services.
In addition to receiving financial and tax support, local foundations such as Northfield are provided with training and resources, too. The gift planning and grantmaking expertise of the Community Funds Program, along with its credibility, makes community foundation giving more attractive to donors.
What's the biggest advantage of the partnership? Bleckwehl says it's the cost savings. Minnesota Community Foundation charges a small flat fee based on a fund's year-end balance. He says handling all services in-house would cost much more, so having outside help to manage Northfield’s finances makes great operational and financial sense.
Cooperation Strengthens Faith-Based Grantmaker
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Marilou Eldred |
Community foundations large and small face many of the same challenges today: sagging financial markets, competition for donors, intractable community issues. While the stock market is beyond their control, many foundations are proactively facing the other challenges head on.
Catholic Community Foundation (CCF) is replacing competition with cooperation. President Marilou Eldred cherishes the organization's good relationship with The Saint Paul Foundation, their faith-based colleagues and other Twin Cities foundations. "We have a wonderful array of local community foundations, which provide terrific options for donors," she explains.
"Give with Faith" Initiative
Last fall CCF, the Lutheran Community Foundation and the Jewish Community Foundation launched a joint outreach effort to inform the public about opportunities for donors to link their philanthropic goals with their spiritual values. The ongoing program Give with Faith includes a comprehensive communications campaign and a website with links to each foundation.
"We received wonderful informal feedback from our billboards," says Eldred. The collaborating organizations also implemented other outreach activities, and they jointly sponsored a conference for investment advisors and financial planners.
Plans are to continue the effort next year. "With where the many uncertainties about relationships among world religions are going," comments Eldred, "we believe strongly in the importance of this ongoing work."
Challenges and opportunities
Like other faith-based foundations and many issue-oriented groups, the Catholic Community Foundation has a built-in target audience, but, says Eldred, "It's an ongoing challenge for all of us, bringing in new donors." She adds, "We use every means we have to introduce new donors to the work that we do."
The foundation uses Catholic print and radio media, communications with pastors, and inserts in parish bulletins. Its communications and outreach plan also includes advertising with arts organizations in the Twin Cities, such as the Minnesota Orchestra, the St. Paul Chamber Orchestra and others.
Strategic goals
These efforts are just a few of many activities being undertaken to ensure the foundation reaches the goals laid out in its new strategic plan. Through 2013 the foundation staff and board will work to reach specific numerical goals for new organizational and individual donors and dollars raised.
A primary focus of the community foundationfs giving is tuition support for Catholic schools. "We have a very strong goal to keep Catholic schools not just open but thriving," emphasizes Eldred. "Many of the schools are located in inner-city and poor neighborhoods, so families need fairly large subsidies. We work with schools and the Archdiocese to identify the greatest needs so we can assure our dollars will have the greatest impact."
© Copyright 2008 Minnesota Council on Foundations
Reproduction in any form without the written permission of the publisher
is prohibited.
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