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Achieving Sustainability in Emerging Community Foundations

Growing Smarter. Achieving Sustainability in Emerging Community Foundations. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations. OBJECTIVE. Draw attention to the unique opportunities and challenges faced by emerging community foundations

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Achieving Sustainability in Emerging Community Foundations

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  1. Growing Smarter Achieving Sustainability inEmerging Community Foundations

  2. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations OBJECTIVE Draw attention to the unique opportunities and challenges faced by emerging community foundations Share practical approaches to achieving sustainable growth

  3. 1 2 3 4 5 6 7 8 9 GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations CASES The paper highlights experiences from nine small community foundations engaged in The James Irvine Foundation’s Community Foundations Initiative II. 1 Shasta Regional Community Foundation 2 Community Foundation of Mendocino County 3 Placer Community Foundation 4 Community Foundation of the Napa Valley 5 Solano Community Foundation 6 Stanislaus Community Foundation 7 Fresno Regional Foundation 8 San Luis Obispo County Community Foundation 9 Kern Community Foundation

  4. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations INTERVIEWS The paper captures insights from fast-growing community foundations in the next stage of development, with assets of $10 million to $200 million. Arkansas Community Foundation Community Foundation of the GreatRiver Bend The Community Foundation of Harrisonburg and Rockingham County The Community Foundation of Lorain County Community Foundation of New Jersey Community Foundation of the Ozarks The Community Foundation ServingBoulder County The Erie Community Foundation Greater Green Bay Community Foundation Greater Houston Community Foundation The Harrison County Community Foundation Henry County Community Foundation, Inc. Northern Virginia Community Foundation The Omaha Community Foundation Triangle Community Foundation

  5. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations FOCUS emerging community foundations Emerging refers to young community foundations thatare experiencing — or are poised to experience — a high rate of growth. Emerging community foundations makeup a high percentage of the community foundation field. Lessons presented can be valuable for community foundations of virtually any size that are undergoing a significant increase in scale of assets, operations or operating costs.

  6. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations CONTEXT emerging community foundations Field-wide analysis shows: • More than 50 percent of community foundationsare less than 10 years old • Of these, two-thirds have < $25M in assets

  7. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations SITUATION emerging community foundationsface unique challenges • Ambitious community expectations • Limited resources • Difficult struggle toward financial sustainability

  8. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations EMERGING COMMUNITY FOUNDATIONS have unique opportunities • Greater freedom to explore innovative operating models and experiment with new ideas • Ability to adapt more quickly • Choices made in the present have the potential to dramatically change how the foundation works in the future

  9. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations DEFINITION • Having the resources that enable a community foundation to advance its mission today, while also enhancing its ability to do so in the future. sus•tain•a•bil•i•ty

  10. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations THE GROWTH PARADOX CONVENTIONAL WISDOM: Deficits will disappear as asset size grows. REALITY: Deficits may actually worsen as assets grow.

  11. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations GROWING NICELY

  12. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations GROWING CONCERNS

  13. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations FACT all assets are not equal when it comes to sustainability • The path to sustainability does not dependon growth alone • Answering the right questions in the right order increases the likelihood of success • Choosing the best approach to growth aligns organizational resources and expectations

  14. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations MOVING FROM “HOW FAST CAN WE GROW?” TO: “What are our goals for growth?” “What are the ways in which we can grow?” “How can we grow in a sustainable way that serves our mission?”

  15. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations GOALS FOR GROWTH define success beyond asset size • Growing community awareness and involvement • Encouraging local philanthropy • Increasing the reach of grantmaking • Improving the proportion of costs supported by fees

  16. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations THREE APPROACHES TO GROWTH Controlled “We don’t spend money we don’t have.” Engaged “Let’s get everyone involved.” Leveraged “We need to expand our reach.”

  17. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations CONTROLLED APPROACH TO GROWTH “We don’t spend money we don’t have.” • Emphasizes the need for organizational stability and independence • Utilizes funds with favorable economics, closely managing expansion and costs • Requires saying “no” more often and potentially accepting slower growth

  18. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations ENGAGED APPROACH TO GROWTH “Let’s get everyone involved.” • Emphasizes the importance of building relationships • Utilizes initiatives to engage the local community in philanthropy • Requires skill in building relationships and proficiency in managing complex initiatives and community expectations

  19. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations LEVERAGED APPROACH TO GROWTH “We need to expand our reach.” • Emphasizes broadening the community foundation’s reach through partnerships • Utilizes geographic affiliates and matching funds • Requires significant investment and fiscal discipline

  20. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations KEY STRATEGIC DECISIONS Successfully employing any of these three approaches dependson understanding the community foundation’s economics. • Setting clear product and fund prioritiesfor development • Aligning pricing with cost drivers anddonor incentives • Diversifying ongoing revenue sources • Managing the cost base

  21. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations INCREASING SUSTAINABILITY AND IMPACT the board role • Develop an understanding of thefoundation’s economic picture • Determine development priorities foreach product • Align pricing, incentives and acceptance policies with priority products • Review the foundation’s economicprofile annually

  22. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations DISCUSSION GUIDE perspectives on the growthof the community foundation • How should our community foundation define success beyond asset growth? • How would we articulate our approach to growth over the next five years — what are our valuesand what is our mindset or approach? • What critical decisions on growth and sustainability are we facing today?

  23. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations DISCUSSION GUIDE active approaches tomanaging sustainability • How sustainable is our community foundation today? Where do we want to be in five years? • What are the economics of the funds or products we offer, and which should we prioritize for growth based on balancing mission and sustainability? • How can the board actively engage to guide the foundation on a path to sustainability?

  24. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations RESOURCE use the report • Share the report with staff, board and colleagues: www.irvine.org (publications) • Use the Discussion Guide questions to draw leaders into deeper dialogue and analysis • Access additional tools about community foundation sustainability through Community Foundation Insights, a division of FSG Social Impact Advisors (www.cfinsights.org)

  25. Growing Smarter Achieving Sustainability inEmerging Community Foundations

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