Family Philanthropy in Community Foundations
Community involvement and support for local institutions have always been at the heart of family philanthropy. Many families feel a strong emotional and genealogical pull from their home states, cities, or towns long after economic ties have grown weak or been severed altogether. Perhaps the family business has been relocated to a larger city to take advantage of a better manufacturing facility or more proximity to a greater market, or maybe the family’s once cottage-industry has become a national or even international heavyweight. Even when the family is generations removed from the founding donor’s place of origin, many families still feel a strong allegiance to the communities in which the family has historically been based. A sense of place and the desire to give back to the community prove to be strong motivators to many families as they launch a family giving initiative or perpetuate an existing philanthropic legacy.
Philanthropy looks markedly different than it did one hundred years ago: today’s wealth is less localized, and there are more families with more significant resources available to them than ever before. The economic boom of the 1990′s and the much-talked-about transfer of wealth, have placed an unprecedented number of Americans in a position to make significant gifts back to their communities and causes in which they believe. Organized, systematized family philanthropy was once an option available only to the very rich, who established foundations to carry out their philanthropic missions. While many families still opt to establish their own foundations, and the number of those organizations is continuing to grow, a wide range of giving vehicles have made organized philanthropy a viable option for many new family donors.
Increasingly, the local community foundation is where donor vision, energy, and capital can engage with community leaders and begin to address community needs. Community foundations have long worked with individual donors, helping to direct funds to nonprofits within the community either through grants from donor families, or in more recent years through more closely advised giving vehicles such as donor-advised funds. The popularity of donor-advised funds, and the increasing number of community foundations working with family foundations to resolve local issues are enabling more families to engage with their communities. Families are also realizing that giving through their hometown community foundation can be a good way to remain connected to one another and overcome geographic dispersion difficulties caused by our increasingly mobile population. For family philanthropists for whom geographic affinities guide and influence their giving impulse, community foundations can be an ideal environment in which to grow their charitable legacies.
About Community Foundations
In 1914, Frederick Harris Goff founded America’s first community foundation in Cleveland, as an alternative to the bank-held charitable funds of the time. Goff’s plan was to keep the investment responsibilities in the hands of those who knew them best, namely the bankers, and to transfer the responsibilities of dispersing funds to civic and community leaders who were intimately familiar with local issues and needs. Today The Cleveland Foundation is the nation’s second largest community foundation and still serves the needs of greater Cleveland. In addition to his local impact, Goff, left behind an even greater legacy: a great idea.
And that idea caught on: according to the Council on Foundations, today there are nearly 700 community foundations in America. According to the Council’s 2003 report, community foundations in the US received more than $3.5 billion dollars in gifts, including donor-advised funds, bequests, real estate, stock options, and art work, and gave away more than $2.5 billion. In addition, a recent report from the Worldwide Initiatives for Grantmaker Support (WINGS) found more than 470 community foundations in 41 countries around the world.
Community Foundations and Family Donors
For new donors, as well as for donors already engaged in a family giving initiative, community foundations can offer a unique opportunity to contribute to local causes that are meaningful to them. One of the fastest growing options available are donor-advised funds: charitable accounts established through an intermediary organization, such as a community foundation or financial planning institution, which allow donors to give to a cause of their choice without incurring many of the costs and administrative responsibilities of a private foundation. According to findings published in the Chronicle of Philanthropy‘s fifth annual survey of gift funds, contributions to donor-advised funds grew by 9.4% between 2002 and 2003, and during that time the number of new accounts opened rose by 8.8%. Despite recent market dips and an uncertain economic forecast, few of the organizations surveyed—many of them community foundations—reported a decrease in fund assets. Those organizations that did report a significant drop in funds were either victims of a more profound, localized economic slump or had one or more donors authorize larger than usual donations from their funds.
Community foundations often provide both administrative support and grantmaking guidance to their donors, and assist them in giving through a variety of giving options. For many families a donor-advised fund administered through the local community foundation is an attractive option, because it allows the family to recommend that their donations go to causes that interest them or that they find particularly poignant or pressing.
When Wayne Vason wanted to support environmental causes in his community he turned to the Community Foundation of Greater Atlanta to provide the necessary information and advice to make his decision. Although he had been a long-time contributor through the community foundation to local causes in the Metro-Atlanta area, support for environmental causes is a more recent development for Vason, whose daughter Katie expressed a passionate interest in them. In Katie’s enthusiasm, Vason saw an opportunity to get her involved in the family’s philanthropy and helped her found the Madison-Morgan Conservancy, which works to address environmental causes in his hometown and county. Of his decision to direct his family’s giving back into the community, Vason said: “Growing up I saw and felt my parents’ simple acts of kindness to family, friends and others. This was instilled in me and I feel responsibility to give my time, talent and treasure to communities from which I have benefited.”
While still wanting to remain engaged in their hometowns, some family philanthropists prefer that their giving also reflect the extensive and varied experiences that have shaped the family and its members to date. After their father’s death in 2003, the four children of successful Boston grocer and first director of the board of the New England Produce Market in Chelsea, Charles J. Scimeca decided to convert the private foundation that he had established into a donor-advised fund at The Boston Foundation. In addition to the gift they make together in honor of their father to the West End House Boys and Girls Club, each of the siblings makes gifts to causes that are important to them or have shaped his or her life. These causes are as varied as the siblings themselves, ranging from supporting public television and political struggles in Tibet, to literacy programs in Boston and Shakespearean theater in California. For the Scimecas the donor-advised fund option was extremely attractive: “The flexibility and the potential for our own children to become successor advisors was very appealing too.”
Continued Collaboration: The Future for Community Foundations and Family Donors
A growing number of community foundations are looking for new and inventive ways to engage family donors, and to address the concerns particular to them. Larger community foundations, such as the Boston Foundation, the Fairfield County Community Foundation, the Community Foundation Silicon Valley and the Community Foundation for Greater Atlanta have launched programs specifically aimed at helping family donors achieved their philanthropic goals. In addition to ongoing administrative and research assistance, these services are also addressing several challenging issues particular to family donors including issues related to family dynamics, geographic dispersion of the family, and generational succession.
Additional Resources on Community Foundations and Family Giving
- To find a community foundation in your area, check out the Community Foundation Locator.
- The Council on Foundations Community Foundations Fact Sheet
Editor’s Note: This edition of Family Giving News highlights donor families looking to their community foundations to meet their giving and other community goals. There are a variety of options for managing donor-advised funds, many of which have been featured in Family Giving News. For more information contact the National Center.