Place-Based Community Foundations - what is the extent of our reach?

In the Council’s recently published Community Foundation Business Model Disruptions in the 21st Century, Kevin Murphy cited a debate simmering in the community foundation field about the future of community foundation business model.

At the Council, we have seen a growing trend in community foundations of all sizes and geographies asking about how to make international grants, often from donor or corporate advised funds. Our latest publication is a new global philanthropy report with the Foundation Center—Local Communities with Global Reach: International Giving by U.S. Community Foundations. This report is the first-ever analysis of international giving by large U.S. community foundations and I think another example of disruption within our traditional community foundation model, as we found that community foundation global grantmaking has drastically increased in the last decade.

In my own experiences as former CEO of a small, rural community foundation in Indiana, it might surprise some that we saw global grantmaking requests from individual and corporate donors in different ways. Individuals supported relief after the 2015 earthquake in Nepal, corporate scholarship programs expanded to employees in Mexico, Canada and Poland, and a church group with mission work expanded into Haiti. Our community also had a sister-city program in Germany and saw opportunities for our foundation to facilitate grants and activities across borders

These requests never equaled a significant percentage of our overall grantmaking, but did require significant staff resources to understand the implications, limitations, and processes associated with global grants. Never did it skew our overall grantmaking enough to raise questions about our geographic focus as a local community foundation, but it did cause internal debates about the spectrum of services offered to our donors and community.

Community Foundations remain domestic actors—our report found that they are still directing 94% of their grant dollars to US non-profits working domestically, even as global giving amounts have doubled. This level of global giving has remained steady for a decade. By all accounts, community foundations predominantly remain place-based institutions with local giving.

However, when people are increasingly global citizens, are community foundations responding this growing international interest? Our report includes interviews with five community foundations—Boston Foundation, Cleveland Foundation, Greater Houston Community Foundation, Seattle Foundation and Silicon Valley Community Foundation—who each approach international engagement in diverse ways and show how their international work reflects the interests of their community.

We know that our communities care about responding to natural global disasters and more than ever, include growing diaspora populations who may want to engage with countries of origin. Is this global interest solely a fad or further disruption to the existing community foundation business model?

For many community foundations, a grant that goes beyond their geographic borders raises a new set of questions—is this a conflict to our locally, place-based institutional values? Is this type of grantmaking better served by someone else?

In the end, I personally came to the conclusion if the assets were under our management at the foundation, I could be comfortable with grants beyond our borders, especially when it was donor-driven.

I think the central question to ask is: how will your community foundation address the interest of donors in this new paradigm of giving? As community leaders, teaching and inspiring philanthropy, should your foundation dictate (or limit) donors’ grantmaking defined geographic boundaries or support them in becoming philanthropists on their own terms?

While the research shows that global grantmaking is an increasingly common practice, especially for large U.S. community foundations, the Council has also seen a growing number of requests for support from small and medium sized community foundations undertaking international grantmaking. Now is a good time for community foundations of all sizes to take stock of the implications and opportunities of being a local foundation with global reach.

The discussion guide published in conjunction with the report raises important questions for community foundations, whether you already facilitate grantmaking to international causes and organizations, or considering its impact on your business model as an emerging service for the community.