Community Foundations: Local, Accessible Philanthropy

Community foundations are unique philanthropic vehicles that excel at connecting local donors to local needs, and improving the quality of life for people sharing a local geography. Community foundations have proven to be a very effective and desirable vehicle for donors from all socio-economic backgrounds. These philanthropic organizations are well-suited to play a lead role in the democratization of philanthropy due to their unique:

• Knowledge of local community issues, opportunities, and resources
• Flexible purpose and ability to direct community resources to the areas of greatest community need
• Personalized donor service and ability to tailor custom giving vehicles based on each donor's unique charitable interests and financial circumstances
• Capability to allow donors to remain involved in recommending uses of their gift dollars
• Focus on generating long-term community capital through endowment building
• Ability to allow donors of all financial means to achieve a legacy (via endowment giving)
• Position as the low-cost, simple alternative to creating a family foundation

1991 Keynote Address
Dr. Russell G. Mawby, Chairman of the W.K. Kellogg Foundation

Announcing W.K. Kellogg Foundation's investment in the growth of Michigan community foundations and the development of youth grantmakers.

Community foundations are one of the fastest growing forms of philanthropy in the United States. The infrastructure for engaging community-based grantmakers globally is rapidly expanding. The first community foundation was formed in Cleveland, Ohio in 1914. Today, there are community foundations blanketing in the United States, in Canada and in the United Kingdom. Community foundations are emerging in Brazil, Bulgaria, Germany, Mexico, Poland, Russia, and South Africa, Australia, New Zealand, Anguilla, India, Japan, Puerto Rico, and the U.S. Virgin Islands.

Michigan Community Foundations' Youth Project

In the late 1980s, the Council of Michigan Foundations and its community foundation members developed a proposal to the W.K. Kellogg Foundation's Philanthropy and Volunteerism programming area for the Michigan Community Foundations' Youth Project (MCFYP).

MCFYP offered each community foundation (or geographic affiliate fund) a challenge grant of up to $1 million. The challenge grant required $2 of local funds to be raised and placed in a permanent unrestricted or field of interest fund in a community foundation, to leverage $1 from the W.K. Kellogg Foundation. Kellogg monies were permanently endowed in a youth field of interest fund. Community foundations had to establish Youth Advisory Committees (YACs) comprised of at least 50% youth members (most are now 100% youth) to advise on grants from the youth fund forever.

The goals of the challenge grant were to:

• Expand the areas served by community foundations in Michigan so that every citizen would have access to such a philanthropic vehicle
• Strengthen the capacity of existing community foundations
• Involve youth in grantmaking with permanently endowed funds through the creation of Youth Advisory Committees

To support these goals, the W.K. Kellogg Foundation made a long-term investment from 1988 to present supporting a number of key strategies designed to promote community foundation growth:

• Leveraging resources through a challenge grant
• Providing technical assistance
• Creating efficiencies of scale through regional collaboration
• Developing technological capacity
• Developing and implementing operational standards
• Creating common marketing strategies and tools
• Serving as an intermediary for region-wide grants
• Promoting affiliation and mergers

This website offers practical "how to" materials developed by the Council of Michigan Foundations and information about what we have learned in the process of implementing the above strategies.

Michigan community foundations have experienced extensive growth since 1988.

This challenge grant was instrumental in integrating community foundations into the fabric of Michigan's local communities while providing a unique opportunity to create permanent, local endowments that will forever contribute to the quality of life of Michigan citizens.  Since 1988, Michigan has seen the following benefits of W. K. Kellogg Foundation's investment:

• In 1988 only 28 out of 83 counties were served. Today, every citizen in Michigan has access to a community foundation in their area.
• The number of community foundations has grown from 34 to 65.
• Geographic component funds grew from one to 33.
• Community foundations' assets grew from $200 million in 1988 to over $1.5 billion in 2002.
• 85 fully endowed youth funds were created holding a total of $50 million in assets. Each YAC ranges in size from $250,000 to more than a million. Annually, more than 1,500 high school age youth are involved in YACs with over 8,000 youth participating to date.
• A spin-off initiative called Learning to Give was developed and has grown into a unique national model. This K-12 curriculum-based initiative educates children about the independent sector (knowledge), develops behavior and philanthropic experience (skills) and stimulates private voluntary citizen action for the common good (behavior).
• www.youthgrantmakers.org documents the tremendous growth in  youth grantmaking in Michigan and around the world.

Today Michigan's community foundations invest approximately $95 million annually in a wide variety of programs and agencies dedicated to improving quality of life in our state's multi-faceted communities.