Building community wealth – the tale of the butterfly

Katharine Pearson

It was the passion for the idea of building community wealth that led me to East Africa. Having grown up in Tennessee and worked for years in economically disadvantaged areas of the States, and having experienced first hand, as Executive Director for 13 years of the East Tennessee Foundation (ETF), what happens when a community develops charitable capital for the benefit of its people, I was anxious to explore the options in other parts of the world.

I had observed, even in the US, that there is no single community foundation model. Rather, it is a concept – even a paradox – that translates in many cultures and communities.

The Ford Foundation has given significant support to the development of community and other indigenous foundations around the world in the last 20 years. My introduction to East Africa was as a visitor/consultant in 1995 to the Ford Office for Eastern Africa, where I have been Representative since December 1997. At that time, the office was engaged in a tripartite agreement with the Aga Khan Foundation and a management committee of Kenyans – mostly from the NGO sector – working to establish the Kenya Community Development Foundation (KCDF). As a consultant to that process, I was able to tell the story of ETF’s growth and development in a way that spanned continents and in fact developed relationships between these two foundations that have resulted in a beneficial exchange for both.

We found we had many things in common. Among them were the interrelationship of urban and rural life; the importance of cultural tradition, storytelling, and sense of place; much of the wealth having come from extractive industries; the divide between rich and poor and the perceived lack of resources available to communities. The experience with ETF and the exchange with the emerging KCDF were the motivation to create the Africa Philanthropy Initiative (API).

The butterfly

API was launched as an Africa-wide effort to stimulate the creation of indigenous philanthropy and philanthropic networks, gather research on the environment in which local foundation-building can survive, and convene a peer learning group to increase the knowledge and capacity of emerging foundations in Africa to serve their communities successfully.

Several underlying assumptions have guided this work for the past four years. First and foremost is the conviction that there are untapped assets in communities throughout the world. If these assets are gathered, held in public trust and managed effectively, they can be used to support sustainable community development and reduce developing countries’ dependence on external development aid. Deeply rooted in and reflective of the community’s sense of place and culture and committed to building permanent assets for the development of those communities, local foundations could be a key dimension of civil society and have a significant impact on community development in distressed regions of the world.

While varying from country to country, indigenous philanthropies in developed countries and those that are now emerging in other parts of the world have particular characteristics that distinguish them from other NGOs and externally based donors. Key features include:

  • the mobilization of permanent assets (endowed funds) and other human and financial resources primarily from local individual and institutional donors;
  • grantmaking as their principal development tool;
  • a system of transparent, accountable and locally rooted governance which organizes and balances the first two functions.

These three elements have become known in API, and more recently in the East Africa Philanthropy Initiative (EAPI), as making up ‘the butterfly’, a symbol for the emerging organization that can be an effective mechanism to mobilize community assets and strengthen communities by promoting linkages among elites, poor residents and other local constituencies to understand and meet long-term development needs.

It is within this framework that the Ford Foundation office in East Africa, with partners from other offices in Africa and New York, has worked both to support individual institutions and to help build networks among them to support their development. Currently, the EAPI has eight grantee partners comprising a peer learning group which focuses on foundation-building skills. Our goal in supporting this work is to see effective organizations – local philanthropies – which are unique in their vision and character, but which share the same basic approaches and philosophies of development. Our research has uncovered at least 40 other foundations and trusts in East Africa and efforts are ongoing to organize a regional association of foundations and trusts.

The difficulties

There are continuing difficulties for our grantee partners and for us. The legal framework for NGOs does not always lend support to charitable efforts, and minimal tax incentives are available for individual and business donors. There are now many advocates for changes in policies, but none want the changes to increase the possibility of corrupt practices of hiding wealth from needed tax revenues. There is in any case suspicion of the NGO sector, which has come under scrutiny in some countries for diverting aid funds from government. There is no culture of organized or formalized philanthropy in many countries, yet local practices show examples of generosity and caring among communities in supporting those in need. The concept of endowment is new to many and questions abound about investment practices and policies. Most people still hate to ask other people for money. It’s much easier to ask a stranger than a neighbour. There are not enough real models and too little common language. Improving this situation has proved to be the real value of the peer learning methodology.

We know that skilled people abound but are often not utilized effectively and bear the weight of expectations for immediate success. Finally, many support organizations for aiding the development of both the institutions and the infrastructure are new and fragile and need support to fulfil their role. But things are changing.

Achievements so far

There are real accomplishments. Among the most important is the changed nature of the conversation about resources, philanthropy and development. More and more East Africans are speaking of ‘controlling the development agenda, mobilizing local resources, good governance, and looking for local support’ for their work.

We have learned that building local foundations takes a long time – a decade is barely enough to get started. Take KCDF, which started with conversations in 1995 and was launched as an independent entity in November 2001. Only in the last year have they begun their endowment campaign. These six years of incubation and nurturing set the stage for their success in the broader arena, but it may not be possible for all efforts to have this kind of time. We have not found the depth of knowledge about the field that is needed for growth: there is confusion surrounding the definition of a local foundation and the unique role that they could play is often unseen as they are grouped with all other NGOs. The Ford Foundation is among the few private foundations or other bodies investing in the work of building these important new institutions. We need time, space, donors, and technical expertise to assist in this crucial work.

Although I have been in Kenya for almost five years, I feel I have just started in the journey of discovery that Africa holds for me. I am fortunate to be joined by colleagues in this office – especially the Deputy Representative, Tade Aina – who share the vision of our work in philanthropy and will continue after I leave. We have a commitment to our partners, not just in East Africa, but worldwide. Even now, the Foundation is assessing its work in foundation-building around the world and soon we will have a report to share with partners about some of our insights of the last 20 years. We are attempting to learn from the past and set the stage for new activities and strategies in our grantmaking for the future. I plan to be part of this exciting and emerging movement around the world for years to come. And although some day this path will lead back to East Tennessee, it’s not just yet.

Katharine Pearson is Ford Foundation Representative in Nairobi. She can be contacted by email at k.pearson@fordfound.org

East Tennessee Foundation

East Tennessee Foundation (ETF) is a regional community foundation located in the southern Appalachian Mountains in East Tennessee. Under Katharine Pearson’s leadership, ETF participated in two national Ford Foundation initiatives: the Leadership Program for Community Foundations and, more recently, the Rural Development and Community Foundation Initiative. As ETF’s founding executive director she helped build its assets from $200,000 to reach its strategic development goal of $40 million.


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