Lucy Bernholz, Katherine Fulton, and Gabriel Kasper are authors of a new report that takes stock of the community philanthropy movement and examines how community foundations will need to change in the future. The report, On the Brink of New Promise: The Future of U.S. Community Foundations, is published by Blueprint Research & Design and the Monitor Institute, with funding from the Mott and Ford foundations. Bernholz is the founder and president of Blueprint, a strategy consulting firm that specializes in program research and design for philanthropic foundations. Fulton is president of the Monitor Institute and a partner in the Monitor Group, a family of professional service firms. Gabriel Kasper is strategist with the Monitor Institute specializing in program development for foundations and other social-benefit organizations. Mott Communications Officer Mitch Hurst conducted the interview.
Mott: Can you provide some background on the community foundation futures project and what it hopes to accomplish?
Katherine Fulton: It began about 18 months ago with some conversations with Elan Garonzik [formerly on the staff of the Mott Foundation], who was very interested in the state of community foundations and the speed of change in the field. We basically asked a couple of questions. What time is it for community foundations? Is this a mature industry that’s about to level off or go into decline? Is it at the early stages of its growth? What ways might the industry have to change in the coming years? The other intriguing question is that the Fidelity Charitable Gift Fund caught the industry by surprise in the late ’80s and early ’90s. Are there any surprises of that nature in the years ahead?
We began a broad inquiry that has included well over 300 people in a variety of settings. We released a set of materials, including a summary of the findings that argues we’re about to enter a major new era in community foundations that will have an enormous impact on community foundations in the years ahead.
Adjusting to this new era is not going to be simple for community foundations; they’re going to have to adjust more rapidly than they have in the past. What we’re hoping to do is accelerate the pace of change because we think unless that happens community foundations are going to fall behind.
Mott: Can you talk about the history of the community foundation field and highlight some of the major points in that history when it had to adapt to changing conditions?
Gabriel Kasper: One of the things we realized is that we couldn’t look at the prospects and the current situation in community philanthropy without looking back at the context and evolution of the field. While community foundations have long adapted in fits and starts – changing to fit the circumstances of their communities and their immediate environments – we were able to find four key formative periods throughout U.S. history when community foundations have grown, the forms and structures have changed, and roles have shifted due to large-scale changes in economics, demographics, regulatory structures, and the relationship between the public and private sectors. This helps us to see that what is happening now isn’t so completely different from what’s happened before. It gives us a guide to the way community foundations have adapted in the past.
Prior to 1900 is what we call “early community philanthropy,” when community philanthropy was part of the way people lived. It was informal and integrated into daily life. People took care of their own.
Around the turn of the century we saw the beginnings of the formalization and institutionalization of internal giving among groups. Private foundations started; there was growth in community chests and giving federations.
In 1914 Frederick Goff started the first community foundation in Cleveland, which has been the most visible form of community philanthropy in the last century.
Beginning in the 1950s, after the Second World War, we see the democratization of community philanthropy as community foundations spread beyond just the large cities. They began to reach out and develop donors from throughout the community, not from just a very small group of elites.
In the early 1990s we saw another major shift when the Fidelity Charitable Gift Fund entered the field and shook up the way community foundations did business. Suddenly community foundations had a competitor that could sell philanthropic products directly to the customer.
Mott: What has been the impact of the commercialization of the field? Have community foundations adapted to these new competitive forces?
Lucy Bernholz: In 1991 when Fidelity launched the commercial gift fund the widespread response of community foundations was either defensive or denial. In addition, what we think of as a community foundation field didn’t exist. There were several hundred community foundations around the U.S. but they weren’t organized in any significant way.
In retrospect, I would argue that introduction of these commercial fund options was one of the best things that ever happened to community foundations in terms of organizing themselves, focusing on efficiency and on their marketing. In fact, you can see that a number of things that we now take for granted – the standards movement, the National Marketing Action Team, the Community Foundations Leadership Team, Community Foundations of America – were in some regard a response to this new competitor and other commercial funds that followed.
In some way they’ve responded to these competitive forces quite well, but the problem is 14 years after the introduction of the Fidelity Gift Fund, community foundations are still trying to get their internal houses in order. They’re still not universally in a position to move outside of their institutional concerns and on to the next level, which is what we think the next set of opportunities is all about.
Mott: How has the emergence of online technologies and technology in general played a role in the evolution of community foundations?
Katherine Fulton: First of all, Web technology enabled communities to define themselves in ways that most community foundations weren’t organized to serve. Community foundations, particularly in the U.S., largely served geographic-based communities, whereas the Web lets people find others with which they share an identity, or an interest or a place of origin. Those people might be anywhere. Just as the Web has changed the way music gets sold, it has changed the way individuals can organize themselves, and that has had an impact for community foundations.
Some of the big changes that are looming in the technology world haven’t hit the community foundations yet, but they’re about to. Some of those have to do with social networking technologies like meetup.com that allow activists to organize on the fly using cell phone technology. That can change the way even local communities work together.
Then there are things like the real heart of community foundation work, which has been knowledge of community organizations and community issues and the ability to bring people together to make positive change. Some of the commercial competitors to community foundations – the sellers of online grantmaking applications, for example – are building enormous databases of information about donations and community organizations. We believe community foundations have to figure out how to add value to these resources, use them to their own benefit and to the benefit of communities, and not try to compete with them in the way they tried to compete with the Fidelities of the world.
Additional Resources
- Click here to listen to the full interview.
- Click here to view a PDF of the report.
- Click here to visit the project Website and access additional information including a “futuring toolkit” that provides a set of worksheets and discussion guides.
- To order a single hard copy of the report, please send an e-mail to info@communityphilanthropy.org. [Users are encouraged to download the pdf or view it online as copies of the report currently are limited.]