Community foundations are vehicles for identifying community needs and channelling resources
analysis
Max Legodi
The Southern African Grantmakers’ Association (Saga) has been piloting the establishment of community foundations in South Africa. These philanthropic institutions support development in one specified geographical area. Community foundations act as permanent endowment builders, grantmakers and community resource mobilisers. Their purpose is to support local community development activities through constructive grantmaking partnerships.
Generally, community foundations act as conduits, collecting and redistributing gifts and grants from a wide range of donors. A definition that captures the essence of a community foundation is “an independent charitable organisation created to address critical needs and improve the quality of life in a defined geographic area, such as a town, a village or a province”.
One of the many unique features of the community foundation concept is that these organisations mobilise locally available philanthropic resources. In order to become viable and effective partners in local development, these foundations access whatever pockets of local affluence exist in their specific geographic area. They encourage local giving while not competing with other fund-raising activities.
They are therefore a perfect vehicle for the corporate social involvement of business in their areas. Businesses are able to foster goodwill, advance their own interests and become known in the community while making tangible contributions to development.
The first community foundation was established in the United States in 1914 by Frederick Harris Goff. He wanted to find a way to enable people of modest means to pool their funds in a charitable entity that would benefit their communities. Community foundations are now the fastest growing form of philanthropy in the US. Part of this growth is fuelled by the fact that corporations are recognising the options for charitable giving offered by community foundations.
Community foundations enable corporate social investment to be much more effective and to have a real impact on local development. They offer potential corporate donor partners a wealth of information on community needs, community-based organisations and NGOs, avenues for leveraging of additional resources for development and income tax benefits. Community foundations have expertise in local needs and issues at a level not necessarily attainable in conventional corporate social investment initiatives. They serve as local eyes for national and international corporations.
Within the pilot community foundation programme presently spearheaded through Saga, three of the pilot sites are receiving corporate social investment support. The Greater Rustenburg Community Foundation has received substantial endowment and other funding from the local mining corporations.
The Uthungulu Community Foundation, based in Richards Bay, is resourced through the local chamber of commerce and the mining and exploration companies operating in the region.
In Durban, the Greater Durban Metro Community Foundation has concluded a deal with a paper company to assist the building of the endowment through a percentage on the sale of certain brands of paper.
Companies working with community foundations should view this partnering as an extension of their own resources. This can range from annual reviews of local needs to management of corporate giving programmes. As market forces compel companies to become more “lean and efficient”, new means to accomplish community development goals are being sought.
For the smaller local company without a dedicated corporate social investment programme, such a partnership could provide the ready-made ability to make contributions to development. Larger corporations can stretch their resources by tapping into the additional services provided by community foundations.
Community foundations must be discriminating and creative in forging partnerships with businesses. There is no single formula for success, but rather patterns of behaviour that are more likely to succeed.
Some of the mutual benefits that are derived through corporate involvement in community foundations are identifying changing community needs, assistance from experienced staff at screening and evaluating proposals, providing the capacity of professionally trained staff to supplement corporate staff in the area of distributing grants, evaluating the impact of contributions and knowledge of the local non-profit organisations.
The collaborations that have most success are those that seek creative, strategic alliances, in which there is pay-off for both the development and the corporate agenda.
Max Legodi manages Saga’s community foundation programme
The details
The Mail & Guardian’s Investing in the Future supplement will come out on October 26