On the Brink of New Promise

BY: SUN STAFF

Dec 02, WASHINGTON, DC (SUN) — A series of reports have been released following completion of the Future of Community Philanthropy research project. The full report, an Executive Summary, and a "toolkit" for community planning are now available for download.

"On the Brink of New Promise" is an important read for those interested in community level fundraising and in building active support in the community for philanthropic activities. Unfortunately, the future anticipated by "On the Brink" is not a very positive one:

"U.S. community foundations have entered a pivotal new era. The generation ahead, from 2005 to 2025, will be marked by dynamic change within and around community philanthropy. Every individual community foundation-and the field as a whole-will face new choices. The path ahead is full of promise. Unfortunately, that promise will not be easily realized.

These are bold claims, and we make them only after a process of discovery, analysis, and iteration that has involved more than 300 philanthropic leaders since the spring of 2004. The impetus for the research came from the Charles Stewart Mott and Ford foundations, who asked us to provide U.S. community foundations with some advance warning about the world to come.

What’s clear is that in the coming years, community foundations will face a far greater challenge than they have in the past to define and act on their distinctive value to their communities. The good news is that this next era is ripe with opportunities. Our purpose is to help you seize them."

The reports released by the Future of Community Philanthropy project contain good information for non-profit and community preaching project planners. The "toolkit" may be of particular interest to grassroots preaching projects, because it helps you to identify community level resources and do scenario planning for future and emerging community changes. A set of worksheets help community foundations to assess their community philanthropy environments and consider the strategic problem-solving roles they can play in their localities in the future, to ensure their longevity and success.

The following chart illustrates the evolution of community philanthropy in the United States and marks the sharp decline in the number of community foundations established in recent years. This decline is in comparison to the explosive growth experienced during the mid-1990's, when commercial charitable gift funds entered the philanthropy arena.

The report concludes that we are now entering a new 'formative period', wherein a series of inescapable social changes will challenge and reshape the future for community service providers. Included among the most important dynamics are the following:

• Economic and market pressures. The shift from an industrial economy to an information-based one has unleashed new fortunes, new poverty, new politics, and new global relationships. Corporate consolidation, globalization, and outsourcing are likely to further rearrange local economies as corporations become increasingly mobile. Decisions about economic policy at the national and global levels, as well as local experiences of gaining or losing jobs and industry, will determine community by community whether the time is prosperous or embattled.

• Demographic changes. The face of America in 2050 will be quite unlike that of the 1950s, or even 2000, and the change is already taking place astonishingly quickly in some regions. On the whole, the nation is getting older and more diverse. Migration patterns, the aging of the U.S. population, rural and urban discrepancies, and new or emerging population centers will fundamentally alter the composition and social dynamics of communities, as well as the services they require. Community philanthropy will need to ensure that it can serve the different interests and needs of emerging new populations like communities of color, young people, and immigrants.

• Changing expectations for regulation and accountability. Philanthropy in the next generation will operate under increased regulatory and public scrutiny. The nested systems of regulation that guide philanthropy are complex, involve tax structures at multiple jurisdictional levels (state, national, international), and can be shifted by new regulations on organizations (foundations) and/or individuals (the estate tax). Philanthropy is also affected by regulatory changes in other sectors, including intellectual property and copyright law, homeland security, communications, civil rights, immigration law, and the personal and corporate tax codes. And alongside the external regulatory activity, organized philanthropy continues to implement efforts at self-monitoring, exemplified by the widespread adoption of national standards.

• The commercial sector as innovator. Community philanthropy has long been connected to several allied industries, such as accounting, tax law, estate planning, investment advising, and financial management. As each of these industries innovate, merge, and develop new services they force the others to do so as well, each exerting and responding to ebbs and flows in the others. Technology vendors that build software and hardware systems for managing grants, investments, and entire charitable operations are the latest new player in this mix. The independence, access to capital, built-in scalability, and customer focus of these commercial providers gives them an important advantage over individual and joint efforts by community foundations and makes them an important source of new product innovation in the field.

• Changing relationships between sectors and new expectations for public problemsolving. Philanthropy has grown up within the parameters set by much larger public revenues and systems and certain expectations about the role of businesses. Devolution, tax reform, and cuts in domestic spending have changed the role of national, state, and local governments in providing community services. At the same time, corporations are now leading the way in many product, service, and regulatory innovations that facilitate philanthropic transactions. Ongoing structural shifts in government services and corporate responsibility will require philanthropy to continuously assess these relationships as it defines its role in public problem-solving.

A number of "shifting fundamentals" are also identified as a preview of things to come:

The old measure of success was growth in assets under management.

The new measure of success is demonstrated leadership on behalf of a community.

The old definition of a philanthropic product was a structure for devoting financial assets to charity. Examples include donor advised funds, scholarships, and charitable annuities.

The new definition of a philanthropic product is a combined package of know-how and financial resources that results in community improvement. Examples include successful community development investments, rehabilitated housing, and effective artist-in-residency programs.

The old question was, “What did our grant accomplish?”

The new question is, “How do we work with others to contribute to community improvement?”

The old business model was based on fees on assets under management.

The new business model is being invented by this generation of community philanthropy leaders.


You can download the Future of Community Philanthropy research reports here:

Full Report - "On the Brink of New Promise" (PDF)

Executive Summary (PDF)

The Toolkit (ZIP)


For more information, visit the Community Philanthropy website

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