Lucy Bernholz and Katherine Fulton have written eloquently on The Future of Community Philanthropy in the age of increased competition and collaboration from financial services firms (for assets under management), new legal tools like generation skipping trusts (now holding billions), financial advisers trained in philanthropy (who distintermediate the community foundation's advisory function) and new technology linking donors, advisers, and nonprofits (thereby disintermediating the community foundation grant-advisory function).
Katherine and Lucy should be studying Newdea and vice versa.
What is the role, then, the real role of a community foundation, the one role that a Newdea, or Fidelity, or US Trust, or Merrill cannot plausibly play? I suggest it is moral and community leadership. The community foundation ought to be in the forefront of encouraging what Tracy Gary calls, "Inspired Philanthropy." This comes down to several things:
- Increase the total supply of philanthropic dollars in the community by promoting "prudent and inspired" giving.
- To that end encourage donors to work with advisers to be as generous as possible now and later.
- Work with advisers to get them fairly paid. (Yes, unless you do they won't play as often as they might.)
- Educate donors about causes and encourage donors to learn from one another.
- Open the door to new donors, even if they are not white, educated, or high class. Tons of money is in blue collar businesses, under leadership that may be high school educated. Your donor groups should reflect, presumably, the ethnic mix of your community. Build a welcoming and inclusive community of communities whose staff and board are diverse and shall we say, "not snobby."
- Promote face to face interchange and bonding among the key elements of the community: donors, advisers, nonprofit leaders, volunteers, media, politicians, and passionate advocates of a better world.
- Provide stewardship of the donor's dollars after the donor is gone in accordance with the letter and spirit of the donor's passionate commitment to a given vision of the good.
OK, so what is the business model that supports such community moral leadership? Primarily, the model remains assets under management. What would distinguish the community foundation from for-profit providers would not be rates of return, expense ratios, or high-powered technology, but "high touch" moral and community commitment and leadership. Now, if you asked me as for-profit philanthropy person if any financial services or legal firm could plausibly position themselves the a moral and community leader for the good of, say, St Louis, Dallas, Chicago, or for the good of specific affinity groups, like Evangelical Christians; Gay, Bi, Lesbian and Transgendered, Latinos, Greens, and on and on, I would say, "Are you insane? What do you think we are running here, an eleemosynary institution? Philanthropy is a way to get sticky clients and sticky assets. We have information. You want wisdom, virtue, beauty, justice and excellence? See a priest, professor, philosopher or poet. This is a business not a seed-bed for the soul. What do I look like, Jesus Christ? Moral leadership is in the eye of the beholder. You want a book for a little uplift? I got Chicken Soup for the Soul, 7 Habits of Highly Successful People, I got Atlas Shrugged, and Management Secrets of Attilia the Hun. Take your pick. Then let's get back to getting the deal done. Moral leadership. For that we charge extra."
In an ownership society crass is good, and stupid sells. Business may have a double-bottom line, but one reports to the other or it gets fired. The only hope we have of real and deep, wise and virtuous, not to say self-sacrificing, moral leadership is from the nonprofit sector. Please! This is one game the nice people cannot afford to lose to the shrewd double bottom line billionaires to be.
Ask, a community foundation leader, not about your own assets under management. Ask how you in your community foundation can increase the total supply of philanthropic dollars, and how you can help bind the hearts and minds of the supply side and the demand side for those dollars. Take a total systems perspective and ask how you can get good things done by introducing the right people to one another (advisers, givers, nonprofits, media, public policy types). Ask how you can transform and elevate what is low, selfish, ugly and venal in our society (without putting off your board and other constituents who are exemplars of same.) If you do that unselfishly, honestly, honorably, faithfully, and visibly, you will get your share - a growing share of a growing total - of the philanthropic assets under management and you will have very little competition for your (he swallows hard) "Brand Promise." If you want an uncontested competitive position, try the high ground. You will find it undefended - a wildernness untouched by human foot.
Now why would you provide moral and community leadership as a community foundation? Uh, because that is why you were founded? Because - am I wrong? - you put the good of the community ahead of your own? And those who are last shall be first, and the meek will inherit this world. At some point you either step up and represent what is best in this country and our moral and civic traditions, or you may as well pull over and let the financial companies go by you like an 18 wheeler high-balling down the highway with the horn blasting. You are lousy at running a business, so how about leading a community revival? If you can't or won't you are not necessary and will be replaced by asset gatherers who do transactional giving deed better, quicker, and cheaper - with no particular heart and no particular soul. Our country and our communities need visionary community foundations for the health of our civic life. That is the appeal in the light of which it makes sense for a donor to use a community foundation rather than a for-profit surrogate. Do you make that appeal, if you are with a community foundation; do you partner with the financial firms for the greater good; or do you think you can compete on their turf on their terms? Looking to community foundations for moral and civic leadership, I am often shocked to hear what sounds like a business manager asking, "So what is in it for us?" What is in it for you is survival. But your extinction will only be mourned if you stood for something more important than assets under management. Stand selflessly for the good of the community and you will perform the one essential service that all well informed and resourceful citizens should and will support. The results will be assets under management, a big raise, etc.