Main Trends Affecting Community Foundations

There are two big global trends affecting community foundations. The first is the global economic recession; the second is reduced funding from international donors. More positively, there are signs of people stepping forward to take responsibility for their communities, and the philanthropic culture is slowly taking root. Technology is increasingly affecting the sector.

Global trends

Community foundations are, by their nature, very local organizations so that the way that they experience the world is highly conditioned by their local circumstances, which varies from place to place. However, there appear to be a number of trends that affect many community foundations.

Global economic recession

The recession is affecting most parts of the globe. For example, according to the Council on Foundations in the United States, the recession is the 'top trend'. In Slovakia, the economy has been dependent on exports, and these are much reduced with factories closing or cutting back. Even in Turkey, where there has been marked economic growth, the financial crisis is bringing 'insecurity'.

Changed funding patterns

The recession is affecting community foundations because there is less money to give. In Russia, there is evidence of a significant decrease of activity among community foundations, though all have managed to keep going. In Germany, as the government has reduced its commitment to the social sector, education, culture, and healthcare, there is a challenge for community foundations as they do not want to take over tasks for which government has been responsible. The UK is facing large cuts in support to charities from the public sector, and the future of many government funded grant programs managed by community foundations is uncertain.

At the same time, the patterns in international giving are changing. There is, according the Association of Foundations in the Philippines, 'less international money'. It is clear that the aid architecture has undergone change, as foundations and other donors give fewer but bigger grants towards policy change, rather than supporting the efforts of civil society.

Community self-organizing

While international sources of finance are becoming harder, there are signs that local people are stepping forward to organize their own communities. In Australia, for example, there is an increased desire for donors to support projects at a local level. Similarly, in Romania, there are individuals wanting to engage. Such a trend is also evident in places as far apart as Latvia and Connecticut. There is a trend for these individuals to want to involve themselves in the work, rather than just making a donation.

Philanthropy culture taking root

In some places, this self-organizing means that community philanthropy is taking root in the culture. In Morogoro, for example, the culture of giving is new, but gaining ground slowly as results are delivered. In Italy, some grantmaking foundations are beginning to support community foundations. In New Zealand, community foundations are increasingly recognized and local regions are encouraged to 'give where you live'. In Spain, the foundations working on community development are beginning to realize that they are community foundations without knowing the concept. In Brazil, a study of five cities in the State of São Paulo showed that Brazilians were becoming more likely to help a stranger or to give to people in need.

The growth of the culture of giving was leading to increased professionalisation in some places. In Brazil, for example, professionalisation has 'improved but is still at an early stage'. In some places, there have been formal developments, such as the School for Community Foundations in Ukraine.

Technology

Many respondents reported how technology was changing the landscape. Since the success of the on-line giving was such an influential part in the election of President Obama in the United States, many people see this as the future way to give. For example, Slovakia community foundations are using social media as a way of supporting their outreach, particularly for young people.

A really interesting case is in the Czech Republic. A new giving vehicle has been introduced to mobile telephone text messaging (SMS). It allows anyone to make a modest donation (roughly US$1.50) to an eligible charity easily and transparently by sending a simple text message via a mobile phone. Operated by the Czech Donors Forum, all mobile phone operators waive their fees. This system has been used successfully by a wide spectrum of people, most commonly in response to public crises (for example, floods). In just two years the text-message donor platform has become the most effective tool of fundraising around disasters and major crises. The approach does not work so well, however, when the cause is not easy to explain to the public.

Where next

We explore the legal and fiscal environment for community foundations on the next page.