Community – the best foundation for giving?
Community foundations are beavering away behind the scenes in local areas across the UK – but are they the unsung heroes of philanthropy or merely the State’s lapdogs?
Charitable foundations in the UK provide grants totalling £6 billion. This includes the Big Lottery Fund, family foundations, corporate foundations and community foundations. Of the top 300 philanthropically-funded foundations in the UK, nearly two-thirds (62%) are family foundations, and over one-third (29%) are corporate foundations; while community foundations are not currently included in this list they would likely make up around 15%.
In 2014/15 the top 100 family foundations in the UK (including such charity-sector-household names as the Garfield Weston Foundation, Monument Trust, and Esmée Fairbairn Foundation) gave grants totalling £1.7 billion (including £673 million by the Wellcome Trust alone). The top 50 corporate foundations (including Lloyds Bank, Shell, Goldman Sachs and Vodafone) gave grants totalling £232 million in 2014/15. By contrast the community foundation universe is quite small: The Community Foundation Network (now UK Community Foundations) has 46 members, giving grants of £65 million each year.
In the UK, community foundations were introduced in 1975 following their inception in the US in 1914, but started becoming strong players in civil society in the 1990s. Community foundations are embedded in their local geographical area and serve as a point of contact between donors and local need. They usually support a range of private and corporate donors who are encouraged to donate to a fund out of which grants are then made to local good causes. Individual, corporate and family donors may set up their own fund within the community foundation with a purview to a specific issue or set of issues they wish to address locally. These funds are typically pooled and invested for maximum gain by the community foundation. Funds may be endowed (to provide sustainability into the future) or expendable, according to the wishes of the donor and advice from the community foundations which is there to guide the most effective giving for local needs.
It has been argued that community foundations are closer to the ground when it comes to knowing where to give to get the most effective gains, and can and should and do act as leaders for local philanthropy.
Community Foundations…have an unparalleled reach into local communities. Each Community Foundation has an in depth understanding of their local area, what the priority needs are and how best to address these issues. They are able to direct donors to fund causes that they are not only passionate about but that will make the most difference. UK Community Foundations: About Us
Five years ago community foundations were hailed by some as the fastest-growing source of new philanthropic funds and leaders in funding community development and redevelopment. Since then their numbers have remained stable but their money has grown. Community foundations now have a combined endowment of £500 million, a figure which has doubled in the last five years. And while the level of grants has remained relatively stable, collectively, community foundations could be considered the fifth largest grant-maker in the UK (after the Wellcome Trust, Leverhulme Trust, Children’s Investment Fund Foundation and Comic Relief).
Community foundations have shown a great ability to work innovatively, collectively and collaboratively with diverse partners as well as individually:
- In 2010 the money raised by the London Evening Standard’s Dispossessed Fund was match-funded to the tune of £1 million by the Grassroots Endowment Challenge, a £50m government fund administered by the Community Foundation Network (CFN) (now UK Community Foundations).
- More recently in 2016 the Government match-funded £1 million to help raise funds for the flood victims of Cumbria and Lancashire through those Community Foundations. The Community Foundation for Calderdale subsequently won a Third Sector Award 2016: Fundraising Campaign for the Calderdale Flood Fund - ‘an innovative fundraising campaign that achieved or exceeded its target’.
But are community foundations reaching their full potential?
Research by CGAP (the Centre for Giving and Philanthropy) in 2012 suggested that: ‘there is emphasis on the leveraging of funds and the management aspect of local philanthropy at the expense of detailed exploration of what leadership and empowerment mean at the local level, or of how funds are, or may be, used to strengthen communities.’ Community Foundations have also been accused of being too close to the state and statutory funding missions for communities.
Increased funding pressures on community development and reductions in governmental funding for community support during the global recession, combined with increasing community needs, have been the driving forces behind recent moves by Community Foundations to become more focussed on revitalised models of local, place-based giving.
In recent years several UK community foundations have adopted and adapted the Canadian Vital Signs initiative which is geared towards assessing communities’ vitality and social priorities and thereby better directing spending, putting donors and recipients on a more equal footing:
its capacity to engender shared responsibilities, is importantly linked to relational rather than transactional philanthropic forms (that is, philanthropy as a two-way, mutual interactive relationship between donors and recipient groups, as opposed to a one-way relationship, dominated by donor benevolence).
For example, the Community Foundation for Tyne & Wear and Northumberland, the largest in England, was one of the first to adopt this system of assessing local needs in 2013, used as: ‘to start a conversation about how community philanthropy can best help to improve local quality of life’. Others have used this methodology or some adaptation of it as the basis for specific place-based giving initiatives such as Islington Giving, Hackney Giving (in partnership with the East End Community Foundation) and the new Southwark Giving.
This latest departure should help to maintain and develop community foundations’ expert leadership position when it comes to community regeneration at a vital time for UK society.
 Foundation Giving Trends, 2016. Top 300 Grant-Makers. ACF / Pears Foundation / CGAP (Centre for Giving and Philanthropy)
 Ibid. See my previous article for further detail on the Wellcome Trust and the skew it introduces to the sector (http://www.charityfinancials.com/charity-financials-insider/wellcome-to-the-future-1706.html)
 Ibid. See my previous article for more details on corporate foundation giving (http://www.charityfinancials.com/charity-financials-insider/the-foundations-of-company-giving-1671.html)
 Feurt, S.L. and Sacks, W. (n. d.) “An international perspective on the history, development and characteristics of community foundations,” Discussion paper. Brussels: European Foundation Centre IN: Jung T., Harrow, J. and Phillips, S. D. (2013), 'Developing a better understanding of community foundations in the UK's localisms', Policy and Politics, 41(3), p.409-427.
 Merseyside Community Foundation (2010) The Big Society: a perspective from Merseyside.
 Compared to figures quoted in: The role of community foundations in the Big Society: taken for granted?
Hannah Pavey, Jenny Harrow and Tobias Jung IN Philanthropy and a better society, CGAP, 2012. Alliance Publishing Trust.
 UK Community Foundations.
 According to the ranking in Foundation Giving Trends, 2016. Top 300 Grant-Makers. ACF / Pears Foundation / CGAP (Centre for Giving and Philanthropy).
 The role of community foundations in the Big Society: taken for granted? Hannah Pavey, Jenny Harrow and Tobias Jung IN Philanthropy and a better society, CGAP, 2012. Alliance Publishing Trust.
 Philanthropy and community development: the vital signs of community foundation? Harrow, J. & Jung, T. Jan 2016 In Community Development Journal. 51, 1, p. 132-152
 More on this in next month’s article…
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Dr Cat Walker has worked in the UK voluntary sector for the last 17 years, including Charities Aid Foundation where she was Head of Research from 1999-2006, and Directory of Social Change where she was Head of STEAM (Sector Trends Evidence Analysis Metrics) from 2010-2015.
Cat now works as a freelance consultant and is the founder of The Researchery – a policy-focussed, strategic research surgery for those who want to get more out of data for evidence-led social change we can all believe in.Read more articles by this author