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Community foundations aim for change

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By Michael Easterbrook

Community foundations are one of the fastest growing segments of the philanthropy sector.

And that growth has brought with it changes in how these foundations raise money, interact with their communities and award grants, experts say.

A recent count by the Council on Foundations, a Washington, D.C.-based membership organization, put the number of community foundations at more than 1,100 across 47 countries.

The U.S. alone has more than 700 community foundations managing roughly $44 billion in assets.

As they continue to gain strength, here’s a look at three trends occurring at community foundations in the U.S.

Fundraising

Even though administrative fees charged on donor-advised funds remain vital to sustainability, many community foundations are now reaching out more aggressively to their communities for money to support operational costs.

“We can have a much greater impact on our communities if we go down this road,” says Ken Strmiska, managing director of community foundation services at the Council on Foundations, which counts 550 community foundations among its members.

Strmiska says community foundations are increasingly seeking money to fund operational expenses from private foundations, governmental organizations and established donors within the community.

Noting success the Boston Foundation has had in recent years in this area, he says this new approach to soliciting funds has made community foundations more effective.

“Today, if you want to be a community change agent, chances are your administrative revenue will not cover your community leadership activities,” Strmiska says. “This is a more diverse approach to our development.”

Community leadership

In addition to administering donor-advised funds, community foundations are increasingly convening forums and rallying people in their communities both to identify social problems and figure out how to solve those problems.

“A number of leading community foundations have positioned themselves as critical nonprofits affecting quality of life, rather than just as vehicles for individual donor philanthropy,” says Jennifer Leonard, president of the Rochester Area Community Foundation in New York.

As examples, Leonard cites several Michigan community foundations that have spearheaded environmental work, and her own foundation’s interest in children’s issues.

Since community foundations are not seen as being tied to political or ideological causes, they often are more effective than other community groups when it comes to organizing community response to a social problem, experts say.

“We’re better at bringing the community together than other organizations,” Strmiska says. “From where we sit in the community, we see things that others can’t.”

Collective giving

In an effort to find new ways to create a sense of belonging, many community foundations have begun forming what are commonly called “giving circles.”

Essentially, giving circles are like investment clubs for social causes, allowing like-minded people to pool resources around a particular cause.

For instance, the Impact Fund for Emerging Philanthropists at Foundation for the Carolinas in Charlotte, N.C., brings together young leaders throughout the region.

Members contribute at least $500 each annually, then attend education sessions to evaluate how and where to distribute the money in the fund.

Another giving circle at the foundation, the Teen Impact Fund, allows teenagers to fund programs that address challenges facing young people.

“Collective giving provides people with a very different experience than going to a black-tie charity event,” says Laura Meyer, executive vice president of Foundation for the Carolinas. “It brings people much closer to the power of their dollar.”

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