Community Connections: The Real Story of Minnesota Community Foundations

Friday, June 8, 2018

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 or Willmar, and Golden Valley any number of other communities around Minnesota, you’re likely to have a community foundation working to make your hometown stronger.

Just as no community is exactly the same, neither is each community foundation. That’s the idea!  

Community foundations are nonprofit service organizations with deep community roots. They are led by people from their communities who roll-up their sleeves, and yes, gather dollars together. They also link neighbors, businesses, government and other partners to use the community foundation as a shared, community asset.  Their job is to shape themselves to support the unique challenges and the opportunities of the places that own them.

Recently, a national spotlight has been shown on how one community foundation, Silicon Valley Community Foundation has grown its wealth management services to connect donors with charitable causes. It raised questions about whether the lines have blurred between what are now the country’s largest charitable giving organizations, large, private wealth management firms such as Fidelity and Schwab and their donor services and nonprofit community foundations. (The Atlantic, Chronicle of Philanthropy, New York Times)


Community Connections are Core

This conversation was publicly-engaged recently in Minnesota in a Star Tribune commentary by Judith Healy. Healy provided leadership and forward-thinking 40 years ago to help establish the Minnesota Council on Foundations. In her commentary, she questions whether community foundations are over-emphasizing raising money and work with donors at the expense of engaging community and achieving impact. She suggests 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.

Minnesota Council on Foundations knows that for anyone volunteering with or working in a community foundation in Minnesota today, these are not aspirational goals. They are the daily task. This is what community foundations do. Right now. Day-in-and-day out. In communities throughout Minnesota.

Adapting in a New Donor Climate

We also know with the 2017 federal tax law, growth of commercial advising services for charitable giving, and exciting innovation in philanthropy, the task of linking donors to community needs through community foundations is changing.

  • The days are long and many between large, no-strings-attached endowment gifts that provide maximum flexibility to respond to changing community circumstances.
  • More donors will be looking at the give-today-payout-tomorrow option of the Donor Advised Fund to respond to changes to the charitable giving tax deduction in the 2017 federal tax law. The good news is if donors work with a community foundation they will find guidance and support to link their dollars to shared community goals.
  • Similarly, more donors are looking at connecting their charitable giving with other wealth management services. Sure, it’s convenient. But, it doesn’t provide a community-foundation’s community-connected, donor consulting service and not-for-profit rate structure.
  • Community foundations are making donor dollars go farther. Beyond the grants, they are using endowment funds to invest in projects that support their mission and meet critical community needs. For example, some Minnesota community foundations have redirected their investment strategies to include jumping into a shared pool to invest their endowment funds in the market and create worker-rate housing development in Minnesota.


Continuing Community Dialogue

The dialogue about how community foundations can best serve their communities should not be limited to national exposes, grappling with the role of private wealth management firms in philanthropy, or the questions of those who wonder if North Star of Minnesota philanthropy is not shining as bright as it should.

For Minnesota community foundations, this is a constant conversation. Exploring the trajectory of the Silicon Valley Community Foundation or challenging community foundations to revisit principles for community engagement simply creates energy for the conversation.

Minnesota Council on Foundations fully appreciates the difference a community foundation makes and that they are an amazing community development tool. You link people.  You link “sectors.”  You link ideas and create vision. You link opportunities with resources – donations, public grants and investment dollars. We know painting community foundations simply as wealth management firms is a distortion. Suggesting they do not have authentic community ties misses how dynamically they have evolved. These observations may give us pause, but they are really a call and an invitation to tell the stories about how community foundations make their communities into places they want to call home.

We invite you to tell you story.

What are you doing to engage community? 

What are you doing to adapt to the changing donor environment?

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