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New research shows community foundations are far less strategic in action than rhetoric suggests
Center for Effective Philanthropy

September, 2011

Leaders of community foundations agree on the importance of strategy, but new research indicates that few actually use it in the programmatic and donor-related work of their organizations. That key finding is contained in a report titled Rhetoric Versus Reality: A Strategic Disconnect at Community Foundations, released today by the Center for Effective Philanthropy (CEP). The report, which is available on the CEP website, draws from in-depth interviews with CEOs of community foundations that were selected to represent the population of larger American community foundations.

“The distance between the widespread respect expressed for the idea of strategy and the way community foundations are actually run is significant and suggests a need for re-evaluation,” said Ellie Buteau, Vice President – Research at CEP. “Our findings underscore the need to bring practice into better alignment with discourse.”

CEP researchers used a definition of strategy developed by the organization in the course of an earlier in-depth study of decision-making at private foundations. That definition includes two critical parts: one is a focus on the context in which a specific community foundation operates, and the second is a theory of change, or a clear logical connection, between the use of foundation resources and the achievement of the organization’s goals.

Key findings of the report include the following:

  • CEOs of community foundations uniformly say they value the concept of strategy, but few actually use it in their donor or programmatic work.
  • CEOs who are strategic in their donor work focus explicitly on how donor contributions will benefit the community. In comparison, nonstrategic CEOs focus on how donor contributions will continue to flow to the foundation.
  • CEOs who are strategic in their programmatic work draw on research data and input from stakeholders to develop and execute the work of their foundation.

The report includes profiles of three foundations that were determined to be strategic in their operation, with regard to donors or to programmatic work: California Community Foundation, Community Foundation of the Eastern Shore and Orange County Community Foundation. They vary widely in size and history—California Community Foundation has assets of over $1.2 billion and was founded in 1915, while Community Foundation of the Eastern Shore has assets of $81 million and Orange County Community Foundation was founded in 1989. But they share in common a commitment to strategic action that reflects the terms included in the definition used by CEP: a focus on the community in which they operate, and a connection between the way they use their resources and the goals of the foundation.

The use of strategy was summed up by Antonia Hernández, president of California Community Foundation (CCF), referring to work her foundation does with donors. The goal of her organization was not just to understand what motivated donors to get involved, but to connect them to the needs and opportunities in the community CCF serves: “Have we really determined what their charitable passions are?...And have we connected those passions to the place we serve, which is Los Angeles County?”

The use of data and research was underscored by Spicer Bell, CEO of the Community Foundation of the Eastern Shore.

“Every five years we do a community needs assessment,” Bell told interviewers. “It surveys major stakeholders throughout the region and asks them to assess the greatest needs and opportunities in the area.”

The Orange County Community Foundation (OCCF) hardwires the connection between donors relations and programmatic work to make the connection between income and grantmaking explicit, according to Shelley Hoss, president of OCCF.

“Donor relations and programs are handled by all the same people,” said Hoss. The same people that are making site visits and out there working with nonprofits to help them solve problems on the ground are the same ones that are responding to and advising donors, so that donors have all that shared knowledge base.”

“There is no single reason why community foundations so frequently fail to follow through on the strategic rhetoric,” said Buteau. “But a set of questions did emerge that community foundations might consider asking themselves about how they frame their work with donors and how they can bring the needs of the community into that conversation. They might also question what informs the foundation’s programmatic work, and whether there are opportunities for research and data to better shape an understanding of the community’s needs.”

 

ABOUT THE CENTER FOR EFFECTIVE PHILANTHROPY

The Center for Effective Philanthropy (CEP) is a nonprofit organization with a mission to provide data and create insight so philanthropic funders can better define, assess, and improve their effectiveness and impact. CEP received initial funding in 2001 and has offices in Cambridge, Massachusetts and San Francisco, California. For more information on CEP's work, including its research, publications, and assessment tools, see www.effectivephilanthropy.org.



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