Presentación, análisis e interpretación de los resultados

In most community change enterprises, it is foundations—almost exclusively— that support community planning, community building, community organizing, and community capacity strengthening strategies. Philanthropy also covers the costs of technical assistance and evaluation in most of these efforts.

The public, private, and philanthropic sectors each have different roles in funding the programmatic work. The public sector generally funds direct pro- grams, whether it is oriented toward human development or toward physical/ economic development. The private sector will invest when the profit is clear or when financial incentives help to subsidize costs. Foundations’ contributions to programs generally take the form of planning, seed programs, start-up costs for new activities, gap filling, incentive financing, and so on.

Some foundations have expanded their funding strategies to include “mis- sion-related investing”—that is, investing endowment funds in community de- velopment. Several foundations such as Ford and Heron have been philanthropic leaders in the work, modeling program-related and mission-related investing and helping to build a support system for interested foundations. Examples can be found through the Pilot Cities of the Living Cities network, in which the An- nie E. Casey, MacArthur, McKnight, and Knight foundations all made significant financial and reputational investments in their local communities. Some corpo- rate foundations, such as Prudential, and local foundations, such as Wachovia Regional and William Penn in Philadelphia, have also made significant contri- butions to program-related investments. Annie E. Casey has used the vehicle of “mission-related deposits” (opening accounts with significant sums in banks that operate in their sites) to create incentives for local banks to interact differently vis-à-vis their target neighborhoods.

As the field moves forward, public- and private-sector funders need to work together to understand and appreciate each other’s constraints while also strate- gizing about how to cover the costs of all dimensions of community change work. By focusing on the ways in which community change efforts can catalyze public- and private-sector connections to low-income communities, philanthropic inter- ventions can be the linchpin for much larger social and economic realignment.

This more expansive vision of the role of philanthropy in community change requires a shift in foundation thinking. Foundation leaders and staff need to move from asking, “What kind of grants will have the most direct and apprecia- ble impact?” toward asking, “How can we use all of the resources at our disposal to leverage and improve the effectiveness of other public, private, and commu- nity investments in poor communities?” In the words of one family foundation

leader: “The question we always ask is, ‘What business are we in?’ Our business is community improvement, not grant making. Grants are just tools.”

This suggests a change in orientation from “grant maker” to “change mak- er”—or, in the words of Mark Kramer of FSG Social Impact Advisors, moving to- ward “catalytic philanthropy”—and a concomitant change in how resources are allocated. The Skillman Foundation, for example, estimates that its staff spends as much as one-third of its time on strategies for aligning various interests, lever- aging, and brokering, oftentimes behind the scenes.

The more that foundations are willing to use the various resources at their disposal, the more powerful their non–grant-making roles become. James Jo- seph (2008) has written and spoken about the need for foundations to consider all of their capacities and bring them all to bear on the problems they address. Taking a page from Joseph, it is evident that foundations should consider using and leveraging the following resources and capacities:

e Financial: grants as well as investments and leveraging ability

e Technical: access to national research and best practices

e Civic: leading, convening, setting the agenda, taking on policy and sys-

tems change, helping to counter imbalances in power

e Moral: embracing racial equity, social justice, and self-determination

e Reputational: taking risks

e Intellectual: learning and creating a learning culture

One implication is that foundations should rethink the decision to structure place-based change in the form of an “initiative.” Initiatives generally have de- fined entry and exit points, predetermined time limits, and boundaries around the work; they often require new implementation processes or structures to carry out the work. In the words of Tom David (2008): “Foundations typically launch an initiative at a time which they believe is right for them. They may have completed a new strategic plan or their potential payout may have in- creased due to successful investments. But the timing is rarely, if ever, ideal for their potential grantees.”

The alternative is to work in a neighborhood for a while to learn about its capacities and needs and then develop a program of work organically based on what is already there and what can work most effectively to accelerate change. This allows careful and strategic assessment of the capacities and comparative

advantages of all actors and builds out from there. In this approach, foundations act more as partners and less as distant patrons, goal setters, check writers, and accountability clerks.

At the same time, not every foundation needs to be a partner in a community change enterprise, and not every foundation can be. For many foundations, the better strategy is to be a supporter of high-quality projects and programs that fit within the foundation’s priorities. What is important is to be clear about the types of outcomes that can be expected as a result of different kinds of founda- tion action. As this review states, investments in good programs will yield differ- ent outcomes from those for investments in a community change strategy.

Finally, the experience of CCIs suggests that national foundations should revisit their comparative advantage in community change work. Whereas lo- cal funders have a long-term commitment to place that permits them to work in the organic way recommended here, national funders typically do not have such place-based relationships. Their contributions might be better directed to three main lines of work: field building, including leadership development, capacity building, improvement in data systems, and knowledge development; federal, regional, and state policy change to support community-level work; and provid- ing leadership and support to local and regional foundations, intermediaries, and other place-based institutions in their community change work. Exceptions are the national foundations that have strong local ties, such as MacArthur in Chi- cago or Annie E. Casey in its headquarters town, Baltimore, and the headquarters of its parent corporation, United Parcel Service, in Atlanta.

GUIDELINES FOR THE FUTURE ROLE OF FOUNDATIONS IN COMMUNITY CHANGE ARE AS FOLLOWS:

e Don’t do initiatives. The fact that initiatives are foundation sponsored, time

limited, externally catalyzed, and require new implementation processes or structures in the context of ongoing neighborhood programs has worked against them. We can no longer support the premise that an initiative-driven infusion of a predetermined amount of foundation money—no matter how flexible or comparatively large and long-term by foundation standards—can significantly change the overall trajectory of a disinvested community over a relatively short period of time. This realization argues against relying on stand- alone, comprehensive community change initiatives.

e Place-based foundations are best positioned to do place-based work.

e Think creatively about how to use all of the foundation’s assets and capaci-

e Not every foundation should take on community change work. There are many other worthwhile grants and investments that foundations can pursue that are valuable in their own right and might better match the foun- dation’s mission.

e National foundations should fund activities that support the field of com-

munity change, including knowledge development, policy reform, and infra-

structure development. They can also work through the vehicles of interme- diaries and support local and regional foundations or key institutions in their place-based work. National foundations’ ability to sponsor local community change work is limited by the degree to which they can commit to local sites over the long haul.

e When there is government leadership and investment in place-based

efforts, foundations should look for opportunities to enhance the public

effort by covering such costs as capacity building to enable the effective use

of government funds, wraparound or complementary funding to connect lines of work, technical assistance, and knowledge development.

THE CHANGING ROLE OF FOUNDATIONS IN COMMUNITY CHANGE WORK

National foundations: For the most part, the national and regional foundations that took the lead in the CCIs of the 1990s, such as Ford, Rockefeller, Pew, and Hewlett, no longer fund place-based work directly. The Annie E. Casey Foundation is an exception with its ten-year Making Connections initiative. Even as national foundations pull back from their investments in the CDC field or in CCIs, however, they are experimenting with new strategies for investing in place-based change. Many have chosen to join the consortium that funds Living Cities, formerly the National Community Development Initiative, a national intermediary addressing community change. Another trend has been the search for “regional” approaches to community revitaliza- tion. For example, Ford, Casey, and Rockefeller have collaborated in their grant-making to pro- mote a regional strategy for revitalization of Camden, N.J.

Local, state, and regional foundations: Different kinds of local funders, such as Skillman, George Gund, Price, and Wean have entered the field. Many are taking on a wider range of roles in their place-based work, with the most innovative foundations experimenting with more of the resources at their disposal: investing their endowment capital in neighborhood projects (George

Gund), using their convening authority and political clout to engage a wide range of powerful pub- lic and private partners (Skillman), using their access to influence public systems (MacArthur), marrying local work with state-level advocacy (California Endowment), and taking advantage of their independence to invest in risky or controversial strategies such as organizing and advocacy (Woods, Needmor, Wean) or the self-determination of Native American nations (Bush). As a regional foundation, the Mary Reynolds Babcock Foundation has developed a strategy to sup- port the programmatic and policy “infrastructure” that is focusing on poverty reduction in the Southeast.

Social investors and venture philanthropies: In the past ten years, the philanthropic sector has undergone some important shifts that brought new actors and new thinking into the world of place-based initiatives. The explosion of new funds resulting from high profits in information technology, entertainment, and private investment introduced a new set of donors driven by so- cial investing values, or “philanthrocapitalism” (Bishop & Green, 2008). They are willing to make large investments but require business plans and outcomes accountability in return. Funds like the Robin Hood Foundation in New York serve as collaborative vehicles for these philanthropists, although some also invest directly in place-based efforts such as the Harlem Children’s Zone and charter schools. Intermediary or advisory groups, such as Arabella and New Profit, often work with these new funders to help them develop grant-making strategies. These funders also contract with business consulting firms, such McKinsey and Bridgespan, to advise on nonprofit organizational development. This is a very new group of actors to the philanthropic scene, and they have potential to have a significant impact on this field.

Embedded funders: These funders, also relatively new, are more organically linked to the com- munity change world. Their commitment to a particular place is long term (Sojourner et al., 2004). They are creative in their use of grants, investment funds, leverage, civic capacity, board members, and staff. The Jacobs Family Foundation, for example, used its capital to purchase land for a commercial center and a neighborhood center, and its staff developed expertise in us- ing new tax credits for development. The Lyndhurst Foundation in Chattanooga, Tenn., targeted a disinvested neighborhood for investment for roughly a decade, first funding a community or- ganization and later taking on a more direct role as a strategic developer, acquiring property for affordable housing and coordinating projects.

Health conversion foundations: These foundations are created with proceeds from the sale or for-profit conversion of nonprofit hospitals, insurance companies, and other health organiza- tions. They operate locally or at the state level and have potential to be important leaders in community change philanthropy because they often define health broadly in ways that include preventive, public, and community health. The California Endowment and the California Well- ness Foundations were initial leaders in this new generation of health foundations, but smaller foundations, such as the Connecticut Health Foundation and the Danville Regional Foundation, are also emphasizing social justice, racial equity, and civic capacity development as part of their philanthropic strategies.

Strengthening