Dorothy Reynolds on Community Foundations

Dorothy Reynolds has spent more than 20 years in the field of community-based philanthropy. Initially a senior staff member and CEO for community foundations in Ohio and Michigan, Reynolds has worked as a consultant for a number of philanthropic organizations for the past 11 years. She is also the author of three reports on community foundations published last month by the Charles Stewart Mott Foundation.

The reports are full of ammo for anyone engaging in the debate about my community foundation column. I would guess that if she was part of the debate on this blog, that Reynolds would join the chorus of community foundation employees who disagreed with my column. But I thought that this excerpt from one of her reports got to the core of the issue:

Since the early 1990s, commercial donor-advised funds — created by investment houses as “commercial charitable gift funds” — have offered new challenges to community foundations. The latter are unlikely to outperform the investment portfolio of a Fidelity or Vanguard Fund. And they never will be able to process grant suggestions as quickly as the commercial providers.

On the other hand, community foundations know their communities and the nonprofit sector and can offer donors valuable information and insight. That will continue to be their primary advantage over the commercial donor advised funds.

Every great business consultant will tell you to focus on your niche. Put all your efforts into that which you do best and quit everything else so that you can do the hard work to become the best in the world in your niche. At the core of my column about community foundations was my belief that they should quit those things that the commerical funds are good at and do what Reynolds says they do best: “offer donors valuable information and insight.”

Arguing for community foundations to partner with the commercials to outsource everything but “providing valuable information and insight” is not an insulting way to say that community foundations are not capable of doing these things. It is a arguement for them to focus on what they do best and quit everything else.

If you truly want to understand what I’m talking about and you want to build a world-class community foundation that will be celebrated as the best in the coming decades, go buy Seth Godin’s book The Dip: A Little Book That Teaches You When to Quit (and When to Stick) right now (it will only take you a couple of hours to read). As you’re reading it, realize that while community foundations are trying to be all things to all people, the pure donor advisors I mentioned in my column are busy pushing through the dip as they focus on the one thing they do best: “offering donors valuable information and insight.”