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Community foundations face new challenges

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As the philanthropic environment changes and new types of community funders enter the arena, community foundations will be forced to adapt, a new report says.

The report, “On the Brink of New Promise: The Future of U.S. Community Foundations,” was commissioned by the Charles Steward Mott Foundation in Flint, Mich., and the Ford Foundation of New York, and conducted by the Monitor Institute, based in Cambridge, Mass., and Blueprint Research and Design, which has offices in San Francisco and Seattle.

The arena of community philanthropy has grown over the past decades, the report says, adding different types of community funders, such as giving federations, giving circles, health-care-conversion foundations and other community-based public foundations.

In this crowded and diverse landscape, community foundations will be forced to better define themselves and “act on their distinctive value to their communities,” the report says.

Complicating their efforts are emerging pressures facing community funders, including changing demographics and increasing regulatory and public scrutiny of community foundations, the report says.

To succeed over the next decades, community foundations must emphasize their impact on communities and be accountable for their actions, the reports says.

They must also focus shift their focus from the size of their endowments to becoming a long-term advocates for the communities they support, and will be required to move from independence to collaboration with other community philanthropy groups.

Failure to adapt to the changing environment will “result in a declining relevance for community foundations,” the report says.

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