PMA Consulting, LLC

Where Did the Community Go in Community Foundations?

Community Foundations - Focus on CommunityCommunity Foundations (CFs) used to be focused on just what you would think – the community. However, with commercial financial service companies now offering charitable giving services, community foundations are being forced to cut costs.

Faced with companies such as Fidelity, and others like it, charging a lower fee, CFs are reducing their fees as well. The avalanche effect means less revenue and a smaller budget. Becoming bottom-line focused has left the community portion of the foundation to suffer.

CFs are cutting their staff, and the first to go are the community liaisons. The idea of building sustainable communities may be the “company line” but CFs are more focused on bringing in and almost entirely holding onto the money.

The grant process is streamlined to the point of little interaction between a CF representative and the donor. Rather, just tell the CF what tax-exempt organization you want to support and the CF will make the gift happen. No conversation about the community and its needs ever has to take place.

So what can be done to put the “community” back into community foundations?

  • Stop thinking that low fees are what attracts donors.

Civic leaders want to have an organization within their community that they know are watching out for the best interests of the members of that community.

  • Get back to focusing on the principles of solving community problems. 

What is important to most civic leaders is not the bottom line, but rather their connections to the charitable organizations that are most important to them.

  • Make the case that the CFs work will sustain the community it serves.

In order for CFs to best serve their clients and communities, they need to think about both charitable giving and their endowments. By demonstrating passion for their communities, CFs will be able to position their organizations with their donors.

Image Courtesy of Rawich