Community philanthropy and a new model of development

Jenny Hodgson and Barry Knight

What role can community philanthropy play in development post-2015? Comments on Jenny Hodgson and Barry Knight’s article come from Canada, Germany, Slovakia, Romania, the UK and the US.

As discussion hots up around the United Nations’ new set of Sustainable Development Goals, set to replace the 2015 Millennium Development Goals (MDGs), it is a good time to reflect on the architecture of the international development sector and the role community philanthropy might play in development.  The post-2015 goals will apply universally, not just to developing countries, so this discussion is relevant everywhere.

On 4 December UN Secretary General Ban Ki-moon released his Synthesis Report for the post-2015 development agenda. This report will be the basis for discussion among governments and other actors in the run-up to the UN General Assembly in September 2015.

A global development industry
The good news is that the MDGs have reduced extreme poverty by half (though the benefits have not always been evenly spread geographically and there has been less success on key goals relating to women and children).

However, the global development ‘industry’ that the donor community has helped to create over the last few decades in the pursuit of poverty alleviation and other global development objectives may not be fit for purpose. Many NGOs have become highly skilled proposal writers, budget jugglers and masters of development jargon, who compete with each other to serve the needs of external funders.

The impact of international funding has also distorted our sense of time (a five-year development project can be considered long-term) and created lines of ‘accountability’ (a slippery, multi-directional word much bandied about in development discourse) which drive upwards and outwards. The result is hefty reports landing on desks in London or Washington, far from the people that development is meant to serve.

An alternative model of development
It was frustration with these features of the development industry that, 17 years ago, led to the creation of the Kenya Community Development Foundation (KCDF). KCDF was established by local civil society leaders who were exasperated by what they saw as years of international development programmes in Kenya undermining rather than fostering local agency. They saw people being relegated to the role of ‘beneficiaries’ with ‘needs’ rather than citizens with assets who could play an active role in their own development. Kenya’s rich systems of mutual giving, and its growing middle and wealthy classes, were never part of the local development equation. They therefore wanted to create a local institution that could both build up the capacities of local organizations and harness local assets in new and strategic ways.

It is the same frustration that is today fuelling the creation of the Haiti Community Foundation, an initiative inspired by the perception that despite the millions of dollars in aid being channelled into the country (particularly following the January 2010 earthquake), most of it is going to international organizations, with little investment in building Haitian institutions that could serve people over the long term.

These are just two examples of a new breed of locally driven and locally shaped community philanthropies that are emerging around the world. Although these institutions may differ in context and origins, they are all seeking to model new types of philanthropic behaviour by harnessing local resources and local traditions of giving, and blending them with new institutional forms.

A new evidence base
Up to now, the value of community philanthropy has been largely anecdotal and based on a small number of case studies. However, with the recent publication of the Community Foundation Atlas – timed to coincide with the centenary of the founding of the first community foundation in Cleveland – this has changed.

The Atlas shows that the global community philanthropy field has come of age. Today, there are more than 1,800 community foundations around the world, almost three-quarters of them created in the last 25 years. With a large number of the younger community foundations based in the developing or emerging economies of Eastern Europe, Latin America, Africa and Asia, this is a movement that has spread far beyond its original base in North America.

A recent report produced by the Global Fund for Community Foundations (GFCF) focuses specifically on what the Atlas tells us about the current state of play among community foundations within the GFCF’s own global grantmaking constituency and the extent to which community foundations are playing a unique role in driving people-led development. The report draws on a study of 478 community foundations that answered a detailed questionnaire, paying particular attention to the 110 community foundations in Africa, Asia, Latin America, the Middle East and Central and Eastern Europe. The report also draws on insights gathered through the GFCF’s grantmaking to 157 organizations in 52 countries.

The report focuses on three core characteristics that together form the backbone of strong, effective community philanthropy, and distinguish them from other parts of civil society. They are also what make community foundations fit to be effective local development agents. These are Assets, Capacities and Trust.

Assets
For community foundations, asset development is often associated with endowment funds (according to Atlas data, over 450 of the 1,800 community foundations have endowment funds over $10 million, 11 of these with endowments of over $1 billion). Within the global cohort of Atlas respondents, 83 of the 96 organizations that responded to the question either have or intend to build an endowment fund. Yet, most of the existing endowments are very small, with a median size of $69,700; the smallest is just $200. Clearly, these are too small to offer any long-term sustainability, so what do they tell us?

First, many of the non-US community foundations included in the Atlas survey operate in countries whose recent history includes major – and often turbulent – changes to the political and economic landscape. Some have experienced crisis, conflict or simply entrenched poverty; many have been on the receiving end of decades of international development aid, often with mixed results. In such complex, unpredictable environments, it can be hard to think long term, and the short-term, project-driven nature of international development aid can also constrain long-term thinking. So when a community foundation decides to establish an endowment fund, no matter how small it might be, it can serve as a powerful statement that it intends to be around for a long time and to stick with its community through thick and thin.

Second, despite the many difficulties associated with developing local philanthropy, community foundations are finding new and inventive ways of re-connecting communities with abandoned traditions or establishing new ones, and of valuing other kinds of assets beyond just money.

In Romania, for example, Odorheiu Secuiesc Community Foundation is connecting local philanthropy development to active citizenship. Thirteen thousand individuals use the foundation’s ‘community card’ as a loyalty card with business partners, thereby allowing this small rural community to make small regular payments into a community fund. The income generated through the community card is currently $5,000 a month. This is local money.

Capacity
By and large, community foundations in emerging markets and developing contexts tend to focus on strengthening small, off-the-map local groups that governments, philanthropy and development aid often overlook. In fact, a number of these community foundations emerged as the product of grassroots activism. Underlying many of these institutions is the belief that strong local organizations are an essential part of a healthy civil society; that people trust such organizations to represent them and speak on their behalf; and that these groups need to be well managed if local donors are to be convinced to support them.

So how do community foundations build the capacities of the communities that they serve? Grantmaking is one essential tool in the toolkit, an effective and transparent mechanism for devolving resources (and therefore power) to others so that they can organize themselves. However, grantmaking is not well established or understood in many parts of the world – such as China, Brazil or India – and often it is only community foundations that are doing it. So it is particularly noteworthy that 90 of 94 organizations that answered the question in the Atlas use grantmaking as part of their toolkit.

In addition to grantmaking, these organizations engage in activities such as training, mentoring and convening. In fact, what comes across strongly from the findings of the Atlas is that what really makes a difference to the effectiveness of a community foundation is not the amount of money that it has or gives out, but how it does so.

Guandong Harmony Foundation (est 2009) is one of the very few grantmaking foundations in China, making it a ‘precious’ resource, according to one of its board members. Operating in a highly complex and often sensitive environment, it provides grants, technical support and advice to local groups working on a number of issues, linking them with each other, as well as highlighting their work and amplifying their voices among government authorities and local Chinese donors

Trust
Because community foundations often occupy the middle ground – between those wishing to give and those looking for resources, between international donors and local NGOs, and even between different parts of the same community – much of what they do translates as building trust.

It is hard to place a value on local trust. At their best these foundations are trusted to reflect local needs and opportunities, and they see themselves as accountable to the people within their communities. Again, grantmaking offers an effective model of transparent management of a donor’s funds, with reporting back to both donor and community on each grant.

Building trust is the cornerstone of civil society, the framework for engineering people’s re-engagement in community activity. And the result of community foundation activity is a greater engagement of parts of the community that had previously been detached and disenfranchised.

The LIN Center for Community Development, for example, was established to help support the development of a strong, credible and professional non-profit sector in the urban setting of Ho Chi Minh City, Vietnam. LIN sees the process of raising local Vietnamese contributions for local causes as extremely important in building stronger communities which are better informed and more connected – and, in the end, in improving the long-term sustainability of local efforts.

What role for donors?
Community foundations represent a different model of development, one that is based on the idea that development outcomes are more lasting when people invest their own resources to address their own issues. What is the role of external donors in building what is still a young movement?

Data from the Atlas suggests that this needs to be handled carefully. For around half (45 or 93 who answered the question) external aid is an ‘important’ or ‘centrally important’ part of their funding. Looking at those organizations that have been formed from the outside, of which local people may have limited ownership, the general level of their reported achievements appears to be much lower. The main drivers of success are community leadership and grassroots organizing. So the message seems to be that external support – which has proved crucial to many community foundations, particularly in the start-up and early development stages – needs to be delivered in a way that fosters rather than displaces local leadership and the harnessing of local assets.

This suggests that donors need to be nuanced in the ways that they behave. For traditional international donors, whose influence is already starting to diminish with the arrival of new forms of South-South cooperation (which often require much less in terms of compliance), it is time to do some real soul-searching about the kind of legacy that they want to leave behind in developing contexts where they have been active for decades.

Donors need to think long-term and think holistically. It is short-sighted to concentrate only on the tangible, the countable, the ‘bang for your buck’. How about investing in partner organizations so that they can plan for their future as a longer-term social good so that when you leave, you leave them in good shape? Local NGOs shaped too much by external funding might not be the kinds of NGOs that local people really want. Their ability to negotiate with other institutional players (state, corporate, etc.) depends on some degree of legitimacy and local buy-in.

Civicus recently convened a conversation of activists aimed at exploring the extent to which civil society is ‘fit for purpose’ in the context of current global challenges, and the Global Alliance for Community Philanthropy, which got going earlier this year, brings together a range of public and private donors interested in better understanding how more horizontal forms of asset development can foster more sustainable development and what role international donors can play. These kinds of conversations are essential if international development is going to engage constructively around real issues of power and ownership.

Jenny Hodgson is executive director and Barry Knight is adviser to the Global Fund for Community Foundations. Emails jenny@globalfundcf.org and barryknight@cranehouse.eu

Lead image: Secretary-General Ban Ki-moon (left) briefs the General Assembly on his synthesis report.

Alliance asked community foundation leaders in North America and Europe if they feel community foundations can play a role in development at a national level, helping their countries to meet the new post-2015 development targets, which will apply universally, not just to developing countries. This is what they said.

Ian Bird Community Foundations of Canada

Ian Bird

Ian Bird

The proposed universality of the Sustainable Development Goals reminds us all that many of the world’s persistent challenges are present in all corners of the globe, distributed unevenly to be sure, but in all cases requiring appropriate doses of locally directed assets, trust and capacity (as per Hodgson and Knight.) In Canada, for example, we are in the midst of a Truth and Reconciliation process between Aboriginal and non-Aboriginal peoples, which has exposed our own domestic ‘development industry’. Inner-city inequality, multi-generational poverty and persistent patterns of environmental degradation are similarly constructed by external forces that create internal consequences. A new model of development abroad would be a welcome addition here in the North too, where Canada’s 191 community foundations are emerging to play a role in putting the community at the centre of its own development.

Cathy Elliott, Community Foundations for Lancashire & Merseyside, UK

Cathy Elliott

Cathy Elliott

A community foundation’s role is simple in terms of philanthropy facilitation, grantmaking and community leadership, yet complex due to the many stakeholders involved in order to enable communities to be thriving. Each community foundation and each country’s network appears to major in one of these three elements, though the challenge is to establish all three to satisfy all stakeholders.

In the UK we have decades of experience of grantmaking, at least ten years’ experience of philanthropy facilitation, and our community leadership role is now fully emerging, such as via Vital Signs, launched in 2013. Vital Signs are reports that are produced annually in various regions of the UK to act as guides to local charitable giving by measuring social trends and issues. They serve all aspects of our work to effectively guide community philanthropy for thriving communities as well as to give communities a voice.

Supporting this, our endowment building in the UK is our clear statement of our intent to support communities for the long term. We now hold £450 million in endowment across 48 community foundations. We aim to be a permanent fixture for years to come.

Alina Porumb Association for Community Relations Romania

Alina Porumb

Alina Porumb

Romanian community foundations emerged in a context in which most NGOs, local citizens and sometimes local/regional governments were looking outside their own communities to resource their agenda for development. They offered a changed paradigm, helping local citizens and businesses identify their own resources and use them to support initiatives to improve their quality of life.

Romanian community foundations have invested a lot of energy in supporting young people to engage with local realities, raise resources, make grants and take initiative. They have built fundraising platforms to provide space for communities to raise resources to support the inclusion of more vulnerable groups. They help local citizens organize themselves to build a sense of belonging in their neighbourhoods. In economically underdeveloped areas, they support local producers of food and crafts to promote their work in the community and outside. The locally led and owned projects that community foundations support are mobilizing high levels of in-kind and volunteer resources, with community foundations’ financial investment being matched by the project leaders and their networks.

There are currently 12 community foundations in Romania, aged between two and seven years, covering 35 per cent of the population, while four more are currently being built. All this experience has been brought together through a strong national network that shares a vision for conscious, generous, inclusive and sustainable local communities. As such, this network can be an important asset at the national level to support Romanian progress on the Sustainable Development Goals.

Ulrike Reichart Association of German Foundations 

Ulrike Reichart

Ulrike Reichart

Since 1996, more than 350 community foundations have emerged in Germany, with a growing potential for influence. But what role do they actually play in promoting community involvement at local and national level?

Sustainable capacity building is one important means by which community foundations claim to contribute to the long-term well-being of the community. However, in many parts of Germany their assets, and therefore the funding opportunities, are still very small. But no less important is the human capital: 93 per cent of the work of German community foundations is done by volunteers!

Community foundations in Germany more and more accept the role of a ‘platform for civic engagement’, acting as mediators and facilitators in their communities, inviting all members of the community to contribute time, money or ideas. Their purpose is to bring people and organizations together to talk about important social and political issues and to promote joint action.

German community foundations, with more than 25,000 benefactors and donors and many more contributing time and ideas, have become a strong civic force. But awareness of them is not very great. Their potential for making a significant impact on the achievement of sustainable development goals at national level is therefore not much exploited.

Albert Ruesga Greater New Orleans Foundation USA

Albert Ruesga

Albert Ruesga

I’m an ‘interested party’ in discussions of community philanthropy, running a fairly large community foundation in the American South. In spite of the rich tradition of community philanthropy in the US, I take much of my inspiration from community funds that operate overseas. Here I find examples of organizations built from the ground up, addressing needs framed by local residents, using methods animated by local values. My impression is that the directors of these community funds take chances that few directors of US-based community foundations would take for fear of alienating wealthy donors.

I also tend to find abroad a much greater regard for civil society and its many civilizing roles. Civil society organizations in the US are part of the so-called ‘third sector’. Despite their relative independence from government and business, they seldom help citizens question the frames they’ve internalized from birth, thus helping to ensure that wealth and other privileges remain concentrated in few hands.

I would caution against reading Hodgson and Knight’s article too narrowly. It might give the impression that community funds are exclusively concerned with grassroots or hyper-local matters. Community foundations in the US, and their counterparts in other parts of the world, can be, and often are, a locus of power, bringing together diverse stakeholders to address a community’s most substantive needs.

Sonal Shah London Community Foundation UK

Sonal Shah

Sonal Shah

Talking to community foundations across the globe, I am struck time and again by how similar our stories are, how common the challenges we face. Yes, there are huge differences in our political and cultural contexts, our histories, evolution and finances, but shared themes routinely emerge. For me the most important is this: how do we work in a way that ‘fosters rather than displaces local leadership’ in order for development initiatives around the world to be appropriate and sustainable?

This question is as relevant in London and the UK as it seems to be elsewhere. Mission drift to meet the needs of funders, local NGOs shaped largely by external agency, and an imbalance of power and ownership feature at local, national and international level.

In the UK, donors typically use community foundations to give to smaller charities and grassroots community organizations – local agency and leadership are thereby built into our model. However, it can go further. In London, some of our funds have panels made up of donors and other stakeholders – a place-based fund, for example, may have local residents as well as community activists helping to make decisions.

Or even further, as with our flagship initiative ‘Building Communities in Coldharbour’, which supports individual residents (not groups) to take their own ideas forward. In the words of one of our grantees: ‘It is life-changing for local people to be supported to do the things they want rather than something that is considered necessary from an “expert” person or organization that has no experience of living and working within the ward.’

Boris Strečanský Centre for Philanthropy Slovakia

Boris Strečanský

Boris Strečanský

The six elements of the Sustainable Development Goals (SDGs), as defined in the Synthesis Report of the Secretary General, are relevant to the current situation of Slovakia. However, I am not sure how much Slovakia as a country perceives these goals as goals for itself or how such perception translates into public awareness, actions by local development actors or government policies.

This applies also to community foundations, which operate in different conceptual frameworks, each adapted to their particular situation, and to their reading of the local context and of their particular role in it.

But the point I want to make is that the narratives that inform the actions of (Slovak) community foundations are different from the SDGs, but they are compatible. That says something about the need to recognize the diversity of languages that are used locally to communicate similar content rather than adhering to the somewhat empty development-speak.

Jeff Yost Nebraska Community Foundation USA

Jeff Yost

Jeff Yost

Community foundations are potentially extraordinary organizations that should be, first and foremost, agents of development. Hodgson and Knight are spot on. At the Nebraska Community Foundation, we have built a decentralized system vesting much of the decision making power in the wisdom of 1,800 community volunteers in over 250 Nebraska hometowns. One of our core beliefs is that the only people who can build and sustain a strong and progressive community are those that live and work there. Anyone else coming to town to help should do exactly that and only that. Help. The Nebraska Community Foundation partners with these volunteer leaders on this journey.

To be effective agents of development, our frame must be one of abundance. How do we first maximize the indigenous assets of the people and the place, inclusive of time, talent and treasure? Then what external resources might help to further catalyze community building and positive feelings? It is important to frame money as a tool for development; not an outcome in and of itself. The money is important, but it is only one of many tools required for sustainable community development.

More important than the money is vision, leadership and trust. Our system is grounded in reciprocal, mutually beneficial relationships. Good ideas are really important, but ultimately change that sticks happens along the lines of relationship. A friend reaching out to another friend to say ‘please join me and my family in building the hometown we all dream of’. Thanks to Hodgson and Knight for recommending that an asset-based community development approach be used in every setting.


Comments (1)

Chris Mkhize

The authors and publishers of this report need to be congratulated for stimulating so important a timely global debate on sustained socio-economic development and community philanthropy. My contribution to the debate is that governments, global, are quite often not always excellent trend setters for positive social change or social movements. Instead, civil society quite often brings about desirable and global socio-economic changes to a society. Whilst new developments of cooperation and collaboration between global South-South may bring about some positive or negative change to years of cooperation and collaboration between North-South, harsh realities are that talks on new developments still need to translate these talks to concrete programs of action and results. Social change quite often takes time and, above all, needs to be fully understood by ordinary citizens, if it is to be a success. Cooperation and collaboration between North - South have been in existence since time immemorial. Bringing changes to these relations is something that may not be taken lightly. It requires careful planning and observations, if we are to take forward excellent work we have been doing and continue to do in the process of advancing on a sustained basis community philanthropy.


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