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Community foundations expanding globally

Posted By WINGS, Monday, November 01, 2004
Updated: Wednesday, August 26, 2015
The following was originally published on the Mott Foundation website on 1 November 2004. The original article can be found here.

Banska Bystrica is a city surrounded by the Carpathian Mountains and steeped in history. Tourists to this Slovakian town can explore centuries-old buildings, including a church, castle and palace. But not everything in this bustling valley is focused on the past.

The HealthyCity Community Foundation (HCCF) -- the first community foundation formed in Central Europe after the fall of communism -- is celebrating its 10-year anniversary and looking to the future.

“Nobody would ever think that community foundations could start and get this big in Central and Eastern Europe. But they have, and I am so pleased that it began with us,” said Beata Hirt, HCCF’s executive director.

“Community foundations started from a different point for us than in the Western world. In the United States, somebody rich decided to invest their wealth in the community. In our case, we saw a lot of needs after the fall of communism; community foundations were a way to meet those needs.”

The growth of community foundations internationally has been part of a larger movement that began in the 1990s with globalization of the nonprofit sector. Leaders representing all segments of society worldwide -- government, business, philanthropy and the general public -- wanted to create institutions that could generate trust between different sectors while empowering residents to improve their communities. Leaders viewed community foundations as one such institution because they can provide financial resources to help develop local democracy, the nonprofit sector and grassroots organizations, Hirt said.

While community foundations debuted in the United Kingdom in the late 1970s, many philanthropy specialists cite the birth of HCCF in 1994 as the starting point for the broader  growth of the field throughout Europe.

Meanwhile, the community foundation concept also was percolating in other parts of the globe -- Africa, Asia, Australia and Latin America -- as a way for people to control their own futures. Today, community foundations are one of the fastest growing forms of philanthropy; they can be found in more than 42 countries and on every continent except Antarctica.

The Mott Foundation has been a longtime supporter of community foundations, starting in the late 1970s with grants made to develop and strengthen the field in the United States. Then, in the late 1980s, Mott started supporting community foundation initiatives in the United Kingdom, including a challenge grant to the England-based Charities Aid Foundation (CAF), which helped several community foundations build permanent endowments.

To date, Mott has provided more than $26.9 million to develop the community foundation field internationally. This includes four grants totaling $305,000 since 1995 for general support to the Healthy City Community Foundation.

According to the publication, “2004 Community Foundation Global Status Report,” commissioned by Worldwide Initiatives for Grantmaker Support (WINGS), the number of community foundations outside North America grew at a rate of 176 percent between 1999 and 2004. WINGS is a global network of more than 100 associations and support organizations serving grantmakers and is housed in the European Foundation Centre (EFC) in Brussels.

That growth rate has been amazing, said Monica Patten, chair of WINGS. She is helping coordinate the first gathering of community foundation representatives from around the world. Patten is also president and CEO of Community Foundations of Canada (CFC), a membership organization for a network of more than 140 community foundations. Since 1993, Mott has provided CFC with nine grants totaling $810,000 for general support.

The WINGS event -- being held in December 2004 in Berlin, Germany -- is called “Community Foundations: Symposium on a Global Movement.” It is akin to a think tank and has been funded by several sources, including the Mott and Ford foundations. This year, Mott made two grants totaling $168,745 to EFC to support WINGS’ planning and hosting costs associated with the symposium. In 2003, Mott also made a $44,550 grant to EFC for WINGS’ initial planning for the symposium.

The Berlin gathering, expected to draw about 175 people from 36 countries, was designed for practitioners to share their knowledge and experiences alongside researchers. It is the culmination of more than 15 years of international work and will allow participants to explore the role and impact of community foundations from a global perspective.

“We’re at a critical moment,” said Patten, who has traveled the globe sharing the community foundation concept. “As a field, our growth has been so rapid that we’ve not stopped and taken stock of where we are and where we’re headed. We need to be asking the ‘so what’ questions: ‘Are we having an impact? Are we making a real difference?’”

At least three people participating in the Berlin discussions will be from South Africa, said Max Legodi, operations manager for the Southern African Grantmakers Association (SAGA). He worked at the Johannesburg-based institution when the Ford, W.K. Kellogg and Mott foundations each made $250,000 grants in 1998 to fund a five-year pilot program for developing community foundations. In all, Mott has made eight grants to SAGA since 1994, totaling slightly more than $1 million, for general support and specific projects.

“Initially, community foundations were seen as something brought in from the outside, so they were not embraced here,” Legodi said. “But when South Africans saw that anyone can take the idea and run with it and adapt it, then it started to catch on. There were places where people fell in love with the idea, and that’s where it really took off.”

He was referring to the nation’s two most successful community foundations -- the Greater Rustenburg Community Foundation in the North West province, and the Uthungulu Community Foundation in the KwaZulu-Natal province. In all, there are 11 community foundations in various stages of development in South Africa, and the concept has spread to the neighboring countries of Botswana, Lesotho, Mozambique and Zimbabwe.

Legodi and other South Africans say the community foundation concept, although still not widely well known, was introduced at a time when people were ready to embrace broad changes in their social, political and economic structures. Also, the decentralization movement prompted individuals and international institutions to seek local organizations as the vehicles for developing civil society.

Even the World Bank Group has seen promise in community foundations, investing in a multiyear effort to understand foundations’ role in community-driven development, said Suzanne Feurt, managing director of community foundation services at the Council on Foundations, a national organization based in Washington, D.C.

“In several countries, there were no common words to describe these terms and concepts so they had to invent language, but the popularity of community foundations doesn’t surprise me,” she said. “The concept is so rooted in human nature. All cultures care about their quality of life and having a say in how their resources are spent.”

Feurt, a former Mott program officer who was critical in the Foundation’s work in community foundations, was instrumental in developing EFC’s Community Philanthropy Initiative in 1998. The program promotes and supports community philanthropic organizations throughout Europe, including community foundations.

While there are differences between community foundations in Central/Eastern Europe and those in South Africa, they share similar beginnings: All were created after their nations became democracies and their nonprofit sectors were emerging and developing strength.

As residents of post-communist countries move forward, many also look back to remind themselves of how far they have come, said Boris Strecansky, program director of the Ekopolis Foundation in Slovakia. Ekopolis is also based in Banska Bystrica and is a longtime supporter of HCCF, the region’s first community foundation. Ekopolis has received five Mott grants totaling $1.3 million since 2000, including a $1-million challenge grant to help build the endowment of the Consortium of Environmental Partnership, which is composed of five foundations.

“We know what freedom means, and we know how to value our freedom,” he said. “There is a network of people here who have a vision for our society. These are people who have lived under communism and don’t ever want to experience that again. They share the belief that there is value in active citizenship, and they support community foundations. They are the carriers of social change. They are present, they are visible, and their ideals will not die out.”

In Strecansky’s region of the world, like in many others, nonprofit leaders have experienced common challenges in developing community foundations, including unfavorable tax laws for donors; misunderstandings about the value of building a permanent financial fund, often called an endowment; and challenges associated with ensuring a broad-based, independent governing board.

In Russia, community foundations are respected organizations because they have open competitions for all grants, their guidelines and deadlines for submission are made public, and grant requests are reviewed by a panel of independent experts, said Olga Alexeeva, executive director of Charities Aid Foundation (CAF)-Russia. Since 1994, Mott has made grants totaling $1.9 million for CAF-Russia, including a $1-million grant to help build an endowment.

“There is usually no trust in the communities in Russia because, unfortunately, we have a long record of corruption -- even with some Russian NGOs,” she said. “Our competitive grantmaking process ensures against corruption and outside pressures being put on those making the decisions. Our process builds trust in the community.”

In the past decade, there have been other successes internationally. For example, community foundations are now seen as public benefit or charitable organizations in many more countries worldwide, resulting in tax incentives for donors and exemptions for foundations. Also, community foundations in some countries, such as the United Kingdom and Germany, have been successful in building substantial endowments.

Another measure of the field’s maturation has been the emergence and growth of regional and national support organizations. For example, the Academy for the Development of Philanthropy in Poland was established in 1998 to support the growth of community-based philanthropic organizations nationwide. Since then, Mott has provided four grants totaling $678,000 toward the academy’s work, resulting in the creation of 12 community foundations and five additional ones that are in various stages of development.

Support organizations provide members with technical assistance, networking opportunities, printed resources, legislative advocacy, public education campaigns and other services. They are budding in many other countries, including Brazil, Mexico, South Africa, Russia and Mexico.

The Centro Mexicano para la Filantropia, A.C. (CEMEFI) is a membership organization that provides support for the nonprofit sector. It serves and convenes governmental agencies, and academic, business and nonprofit leaders. Among its 600 members are businesses, foundations, other nonprofits, individuals and a network of 20 Mexican community foundations.Since 1995, Mott has provided seven grants to CEMEFI totaling $900,000 for general purposes and coordination of the country’s community foundation efforts.

The organization’s ultimate goal for its community foundation program is to have at least one community foundation in each of Mexico’s 32 states. Currently, they are in 13 states.

“I truly believe that community foundations will continue to grow in numbers and in impact in Mexico,” said Lourdes Sanz, CEMEFI’s community foundations coordinator. “They have been accepted and will become more accepted because they provide a model that serves as a convener, builds bridges and alliances, and allows people to participate in strengthening their communities.”

In addition to support organizations, formal and informal professional partnerships have added to the field’s growth and resulted in face-to-face exchanges between foundation staff members thousands of miles apart. This cross-fertilization often takes place through peer programs like the U.S.-Europe Community Foundation Fellowships. The program, in existence since 1999, is sponsored by the German Marshall Fund of the United States and Belgium’s King Baudouin Foundation. In addition, Mott has made three grants totaling $378,000.

Other peer exchanges are arranged through organizations like the Transatlantic Community Foundation Network (TCFN), which also was created in 1999. The Mott and Bertelsmann foundations have both funded TCFN’s work, with Mott making two grants totaling $812,500 for TCFN’s initiatives.

Community foundations’ growth has gone from national to regional to transatlantic to global. Several field specialists predict that the next growth spurt will likely come from India or China. For WINGS’ Patten, the field’s explosion can be easily explained.

“The appeal of community foundations is universal because it’s about ‘your place’; it’s local. It’s about a place in which communities are located. Yes, we can identify with what happens globally, but what really and truly matters to people is local.”

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