Carnegie and Rockefeller had recently established—and lavishly endowed—their eponymous foundations when Frederick Goff, president of the Cleveland Trust Company, had a different idea: a “community trust” to which the city’s philanthropists could all contribute. Interest on the money, it was declared, would fund “such charitable purposes as will best make for the mental, moral, and physical improvement of the inhabitants of Cleveland.”
Thus, 100 years ago, was born the world’s first community foundation. (Bequests were, not coincidentally, deposited at the Cleveland Trust Company—setting a precedent for the charitable funds later established by financial services companies such as Fidelity, Schwab and Vanguard.) The Cleveland Foundation was soon leaving its mark on the city, supporting the creation of the so-called “emerald necklace” of the city’s parks, shaking up the corrupt judicial system, spearheading public school reforms that included equal education opportunities for girls. And within five years, community foundations (CFs) had sprung up in Chicago, Boston, Milwaukee, Minneapolis, and Buffalo, NY.
The growth of CFs since then has been immense, immeasurably greater than even the visionary Goff could have dreamed. Today there are an estimated 700 CFs in the US. According to CF Insights, a consultancy specializing in community foundations, assets at CFs in the U.S. totaled $66 billion in 2013, an increase of $8 billion over the previous year. The Silicon Valley Community Foundation (SVCF) led the way, at $4.7 billion, followed by the Tulsa Community Foundation, with $3.9 billion, and the New York Community Trust, with $2.4 billion. (SVCF’s assets, which ballooned with a $1 billion gift from Mark Zuckerberg in 2013, surged ahead again in 2014 with a $500 million stake in the camera maker GoPro from its founders.)
In 2013, commemorating the 100 years since the first CF was established, the Charles Stewart Mott Foundation created a chair on community foundations at Indiana University’s Lilly Family School of Philanthropy. And this past October, to celebrate the centenary of the CF, the Council on Foundations gathered leading philanthropic organizations in Cleveland, where it all began.
What’s more, the rest of the world—including the developing world—is rapidly following America’s lead. According to the latest tally by WINGS (Worldwide Initiatives for Grantmaker Support), a global network of grantmaker support organizations, and the Community Fund Atlas, which is underwritten by the Cleveland Foundation, there are currently some 1,100 CFs outside the US, in more than 50 countries and on six continents. Having launched in the US and Canada in 1914, the CF crossed the Atlantic to Britain about 35 years ago, took root in Germany around the time of reunification, spread to Russia and the former Soviet states, and is currently establishing a foothold throughout the developing world. Between 2010 and 2014, eight new CFs were established in Asia-Pacific, four in sub-Saharan Africa, four in Latin America and two in the Middle East. As the Mott Foundation aptly declared in its 2012 annual report, CFs are “rooted locally, growing globally.”
Whether in the industrialized world or the emerging one, CFs are identical in one key respect: They are public charities that tap the wealth of their communities, with the goal of redistributing it locally. That mission has universal application, asserts Emmett Carson, who is the SVCF’s chief executive officer and is also the visiting holder of the new Mott chair on community foundations. “We should think of the community foundation concept like water,” he says. “The water is the same, but it takes on the shape of whatever community you pour it into.”
And the fact is that CFs differ markedly from one country to another—and, increasingly, even within a country. In the developed world, many CFs are taking on a more activist role than in the past, initiating projects and partnerships as well as donating to established programs. What’s more, many are traveling far beyond their borders, accepting funds from a wider audience and playing a role on the national and even international stage
Meanwhile, the CFs that are springing up in less developed areas—Africa, Asia, Latin America, Eastern Europe—are digging deep into their communities to convince residents to trust the very concept of pooling and distributing funds. While endowments and professional leadership are the hallmarks of long-standing CFs in the US, money necessarily takes a back seat to other priorities among CFs in emerging countries, where there are only small pockets of wealth. “They have to prove they’re relevant to the community and need to establish trust where often there are low levels of trust,” notes Nick Deychakiwsky, program officer for the Mott Foundation’s civil society team. In fact, in many cases those CFs have received a jumpstart by foundations such as Mott, Ford, Open Society and Aga Khan, and also appeal to the diaspora for funds.
As Jenny Hodgson, director of the South Africa-based Global Fund for Community Foundations, observes, community philanthropy is as old as, well, communities themselves. “Every country and culture has its traditions of giving and mutual support between family, friends and neighbors,” she has written, pointing to the tradition of burial societies across Africa and hometown associations in Mexico.
However, the new generation of community philanthropy institutions—fueled by factors ranging from a growing concentration of wealth to the popularity of social media, according to WINGS executive director Helena Monteiro—take a more strategic approach to giving. “Most are about development rather than donor services, and they do a lot of capacity building,” Hodgson told Giving. “They’re building civil society, essentially.” As the Kenya Community Development Foundation, a CF established in 1997, asserts on its website, its goal is “the growth and sustainability of communities by their strong engagement in owning and driving their development efforts.” (Italics are KCDF’s.)
A sampling of this new breed of CFs offers a glimpse of the variety of programs being undertaken:
While all these CFs have struggled to raise money, elsewhere they have also encountered tight governmental controls or opposition. Even there, however, they are making headway. According to a recent report by CAF (Charities Aid Foundation) Russia, a support group for charitable and nonprofit groups, nearly two-thirds of the membership of CF governing boards comes from the authorities and business; even so, starting with one CF in 1998, Russia today has more than 45 community foundations. The situation is more problematic in China, where very few private organizations are permitted to do fundraising, grantmaking is relatively unknown and civil society is weak. Still, says Hodgson, “everybody is talking about community foundations in China. There’s lots of energy right now.”
That’s also an apt description of the situation in the US, where the biggest CFs are stepping up their game. Rather than limiting themselves to making grants to established programs, “community foundations are increasingly moving into the sphere of brokers for community solutions,” declares Clotilde Perez-Bode Dedecker, who heads the Community Foundation for Greater Buffalo in New York State. Dedecker’s group was the prime mover in launching Say Yes to Education, an initiative that has brought together school parents, union leaders, the business sector and other stakeholders to provide year-round support to students K-12, including college scholarships.
Arguably the most striking example of the supercharged CF is the Silicon Valley Community Foundation. The result of a merger of two leading CFs in 2006, SVCF is not only the largest single grantmaker to Bay Area nonprofits, it’s the fifteenth largest international grantmaker in the United States, according to Carson. Furthermore, while SVCF draws much of its wealth from the affluent high-tech community, it also has donors who neither live in the Bay Area nor give to it, but choose to use SVCF as the means to distribute their philanthropy.
To Carson and others, these developments represent a natural progression for CFs in a society that is ever more global. “People increasingly see themselves as national citizens and, more likely, as global citizens,” he notes.” And because many Americans, or at least their parents, hail from different countries, they want to be able to send money overseas as well as to contribute to their new homelands. To compete in this arena—and also to counter the inroads made by financial services companies such as Vanguard and Fidelity, which are vying for donor-advised funds—the leading community foundations are carving out a niche in international philanthropy.
To some people in the CF world, venturing so far afield seems incompatible with the very notion of a community foundation. “A part of me says, ‘Shouldn’t it all be local?’” says the Mott’s Nick Deychakiwsky. But as someone with his own strong spiritual ties to Ukraine, Deychakiwsky concedes that “we’re all living in a more globalized world.” Ultimately, he hopes, globalization will lead to US-based CFs becoming more involved with community foundations abroad—relationships that could benefit organizations in both the developed and developing world. (And there are surprising similarities: Experts notes that CFs in emerging countries have a lot in common with those in rural areas of the US such as the deep South, where “hyperlocal” community development remains the sole focus.) “It’s amazing how much is transferable,” agrees Dedecker of the Community Foundation of Greater Buffalo, who is exploring the sharing of best practices with a CF in Nottingham, England. “The universal drive is for significant change and a strong sense of place,” she concludes. “That’s what unites us all.”