Community Ties Make Community Foundations Work

By Steve Joul and Bob Tracy

Community foundations are a versatile and dynamic community resource. You’ll find a community foundation in every corner of the state. If you live in White Bear Lake, Northfield, Rochester, Luverne, Virginia, Grand Rapids, St. Cloud, Duluth, Willmar, Golden Valley Saint Paul, Minneapolis, or any number of other communities around Minnesota, you’re likely to see a community foundation working to make their hometown stronger.

Just as no community is exactly the same, no community foundation is the same. That’s the idea! However, there are certain similarities common to most community foundations.

Community foundations are nonprofit organizations with deep community roots. They build the long term financial capital of a community to support projects both today and often long in to the future. Community foundations also build the social capital or interconnectedness of a community enabling great projects that improve the quality of life for all.

Community foundations are led by people from the community who roll-up their sleeves and link neighbors, businesses, government and other partners to use the community foundation as a shared community asset. They are “shape-shifters” that tailor themselves to reflect the unique challenges and the opportunities of the local communities that own them.

The Fuss about Community Foundations
This is what community foundations do, but it is not the story that’s front and center in the media or discussed in the halls of Congress.

Recently, the national spotlight focused on the Silicon Valley Community Foundation and growth of its assets, and in particular donor advised funds. Questions about the use of donor advised funds are the focus of media exposure. They raise questions about how the country’s largest private commercial wealth management firms such as Fidelity and Schwab are blending wealth management and donor services. Members of Congress are taking notice of these activities and are also raising questions about endowments. Their current focus is on endowments held by large, private colleges and universities, but there is concern Congressional inquiries and reforms may unintentionally result in disruptions for community foundations.

This conversation was also recently in the media in Minnesota. A commentary in the Star Tribune questioned whether community foundations are over-emphasizing raising money and work with donors at the expense of engaging community and achieving impact. The piece noted five actions community foundations should aspire to take to improve community connections and impact.
Convene community partners to create solutions and develop strategies for investing resources.
• Be the catalyst to inspire and enable change.
• Serve as a conduit moving donor dollars in many ways to community action.
• Build power and share influence as an advocate for those with struggles.
• Provide technical assistance to ensure a strong independent sector.

Anyone volunteering with or working at a community foundation in Minnesota today knows these are not aspirational goals. These are the daily tasks.

Amplify the Community Foundation Story
The dialogue about how community foundations can best serve their communities should not be driven by national exposes that grapple with the role of private wealth management firms in philanthropy, or local stories that wonder if the North Star of Minnesota philanthropy is not shining as bright as it should. It’s time for philanthropic and community leaders to shift the narrative so Minnesotans and decision-makers can fully appreciate the value of community foundations.
• Community foundations need to do more to tell their collective story. Communication and marketing targeting donor prospects is not enough. Nonprofit community foundations need to come together to explain to the public who we are and what we do. The way we connect to community makes us very different from a commercial wealth manager, and the unusual actions of one should not define us all. Frankly, we need to define what community foundations are and do before lawmakers take a stab at it.
• Community foundations need to engage in public policy. We had a generational reform in tax law in 2017, and philanthropy and the independent sector received nothing. In fact, we lost ground. Community foundations need to be more engaged with public policy and advocacy in Washington, D.C. to make sure the difference between a nonprofit community foundation and commercial donor services is understood, that there is an understanding of how donor advised funds are managed and get connected to community needs, and that endowments, a community’s savings accounts, are not raided. We also need to be at the State Capitol. Community foundations can help Minnesota maximize the impact of the generational transfer of wealth that is now upon us, and we can shape policies and drive appropriations that keep the public sector at the table as partners to address our most critical problems and realize the potential of our most strategic opportunities.

Minnesota’s community foundations are an amazing community asset and community development tool that have real impact. They link people. They link “sectors.” They link visions and ideas. They link opportunities with resources to make them happen. Painting community foundations simply as wealth management firms and that they are only interested in increasing financial assets is a distortion. Suggesting they do not have authentic community ties misses how dynamically they have evolved. Hearing others describe community foundations this way should be reason for pause, but really it is an invitation and call to action to tell the stories about how community foundations make their communities into places they want to call home.

Steve serves as President & CEO of CommunityGiving, an organization that unites community foundations in Alexandria, Brainerd, the greater St. Cloud area, Willmar and beyond. He views himself as a lifelong student of COMMUNITY and is committed to understanding and supporting the structures, systems, and institutions that enable and sustain healthy communities. Steve is a former MCF board member.
Bob coordinates public policy engagement and leads MCF's government relations activities. He encourages MCF members to incorporate public policy into their grantmaking.

More of Giving Forum V40, Fall 2018