Community foundations – a gently shifting model

Monica Patten

Community foundations develop funds as well as make grants. They bring together people who care about their communities, they help donors achieve their charitable goals, and they invest in their communities by making effective and timely grants. But how they do this and the balance between these different things varies from place to place. Even as the community foundation model moved across the border from the US to Canada, the emphasis changed significantly.

In 1914, in Cleveland, Ohio, the first US community foundation (CF) came into being. The vision of Frederick Goff, the Cleveland Foundation was created as an independent entity for purposes of distributing unrestricted income from charitable bequests left by clients of his bank, while the money from those bequests continued to be managed by the bank. Not long after that, in 1921 in Winnipeg, the first Canadian CF was born, bringing to about six the number of CFs in North America.

While the growth of CFs has been steady ever since, the concept really blossomed in the last two decades of the twentieth century, and continues to flourish today – not only in North America but around the world.

The community foundation concept

It is easy to think of the concept as a recent American invention, but colleagues from other parts of the world gently remind us that the notion of managing financial resources over the long term and inviting the community to help make decisions about their disbursement is centuries old and has deep roots in notions of philanthropy and responsibility for others.

Why has the concept of CFs taken such a strong hold in recent years? I don’t expect the reasons have changed much over time. Citizens have always wanted to give to their community as a way of saying thank you and of sharing the good fortunes that have come their way. People have always wanted to leave something for the future as well as making a difference in the present. They have always wanted to contribute to causes and issues that matter to them. CFs make possible, indeed encourage, all these aspirations and desires of individuals, families, businesses and community organizations.

In Canada we see CFs as having three key roles – roles that pretty much characterize how CFs around the world would describe themselves. These are endowment-building and offering flexible donor services; broad and effective grantmaking; and inclusive community leadership – all carried out in the context of accountable and responsive governance. It is the combination and interdependence of these three roles that makes CFs different from other fundraising and funding organizations.

Of course, no CF would claim to carry out all three of these key roles all of the time: they fashion their priorities and areas of emphasis to suit the particular circumstances of their culture and community. For some, endowment-building is a long-term goal and receiving funds to flow through to community organizations is more realistic. For others the notion of convening and leading can come only after assets have been built. For yet others bringing the community together to tackle urgent issues or encourage community participation may be the highest priority.

Community foundations in Canada

How have Canadians arrived at their particular version of CFs? One answer lies in the way CFs have begun during the last few years. No longer are they started in the bank or the law office. They are started on the street, by citizens who witness the very soul of their community being threatened, perhaps by the closure of a local hospital, the merger of local governments into regional structures, or the collapse of traditional ways of life – fishing or forestry or farming if they are in rural parts of the country, as most Canadian CFs are. The issue, then, is how to keep one’s community identity, how to build local resources for some security in the future or to address present issues. Setting up a CF is one answer.

A second reason lies in our country’s history. In contrast to our neighbours in the US, Canada has a long history of emphasis on ‘the group’, the community. We have historically encouraged and valued collective action over individual action, so the notion of communities coming together to solve their problems is part of our national identity.

Finally, our history differs from that of the US with regard to philanthropy, and in the way the public and private sectors interact. In Canada we simply don’t have the wealth of the US, nor the same experience of individuals of great wealth setting up philanthropic empires. Until very recently the largest foundation in the country was a CF. The fact that we have historically had a greater reliance on publicly funded services such as universal health care also affects the way we approach things.

Turning to community in the face of globalization

Our specific history and culture apart, Canada, like other countries, is experiencing profound economic and social change. In the face of globalization, feeling unable to influence worldwide, and even countrywide, directions, we turn increasingly to our local communities. That’s where our voices are heard, where our history and values are respected and new ideas welcomed, where we can give some shape to our future. So it is that CFs have found a role in bringing communities together, raising resources for the long-term future, investing, through grants, in current and emerging priorities, nurturing relationships and connections that build a sense of community.

On the other hand, there is a danger of CFs seeming disconnected from larger societal issues in the interest of local issues, and therefore unlikely to join together for collective action. We don’t have much experience of collective action in Canada, but we have had some, and this has served to encourage us to continue to find ways to work together as a field. In the year 1999-2000, for example, CFs launched a nationwide programme that attracted over 4.5 million Canadians to collectively undertake more than 6,500 projects to celebrate their communities at the turn of the century. The ‘Our Millennium’ website later found a home in Canada’s National Archives as their first ever permanent Internet acquisition.

We have also had some experience of partnering with others in the voluntary sector who share similar goals and values – something I rarely observe in other places. In International Year of the Volunteer, for instance, Community Foundations of Canada (CFC) together with United Way of Canada and other granters and funders offered workshops on the importance of volunteerism, developed case studies of how grantmakers have supported volunteerism, and prepared a guide for grantmakers to consider as they review applications having to do with volunteerism.

This is the balance we as CFs need to seek: to understand what our special contribution is, and also to recognize that we are most successful when we join with others, regardless of whether they are from the private, public or voluntary sectors.

Limitations of community foundations

We are sometimes too quick to suggest that CFs’ work will lead to sustainable communities, engaged citizens and increased philanthropy, or that we can fill the gaps left by retreating governments. We will do some of that, for sure, but to be successful we must first be clear about our place in the overall scheme of things – not just in local communities. What is our role in the face of government retrenchment, in relationship to the business sector and in the larger voluntary sector? What is our role in strengthening democracy, in promoting a culture of giving and participating?

Do we really live up to the principles we have espoused? Do we really reflect the composition of our communities at the board and staff levels, in our choice of grantees, in our donor composition? Do our grants really bring about systemic change and does our convening work create space for all voices and opinions? Another question to consider is how many CFs is enough in any country or region, given that they are complex to establish and costly to maintain?

There are no easy answers to these questions. Being clear about our role, and understanding what shapes us, helps us to be comfortable with the similarities and the differences between us and our colleagues in America and in other countries. Even within our own country, there are differences.

Perhaps the best way forward is to learn from each other, taking advantage of global networks such as WINGS-CF.[1] Already in this young network there has been a rich exchange of stories and experiences, as well as publication of some useful resources such as one on the creation of component funds within established CFs.[2] As we come together to learn we quickly see that there is no one right way that will work for every situation.

  1. Worldwide Initiatives for Grantmaker Support – Community Foundations.
  2. Eleanor Sacks, Serving Communities Better: Community foundations’ use of geographic component funds and structures to cover territory. Component funds are funds established by an emerging (or established) foundation within a larger foundation as an alternative to setting up an independent foundation. The component fund bears the name of the community setting it up, and is under the guidance of local leadership, though the host foundation has fiduciary and legal acountability for decisions.

Monica Patten is President and CEO of CFC and Vice Chair of WINGS. She can be contacted at mpatten@community-fdn.ca

For more information about CFC, see http://www.community-fdn.ca
For more information about WINGS, see http://www.wingsweb.org


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