My most recent column for the Financial Times:
A New Role for Community Foundations
By Sean Stannard-Stockton
Link to orininal story on FT.com
Community foundations in the US are at risk of becoming irrelevant unless they can transform into trusted donor advisers.
Since the founding of The Cleveland Foundation in 1914, community foundations have raised charitable funds from a community and distributed the money back to that area’s non-profit organisations. But a new role is emerging. In the near future, community foundations could supplant large private foundations as philanthropy’s leading voices and, in the process, change how individuals engage in philanthropy.
One of the core services of community foundations is offering donor-advised funds. These accounts allow donors to give money to the community foundation, but retain the right to advise which non-profits receive it.
Fidelity Investments launched the first low-cost, commercial donor-advised fund in 1991, and since then community foundations have not been competitive in the donor-advised fund marketplace. Today, commercial donor-advised funds hold the top three spots on the list of biggest donor-advised funds. But rather than competing, community foundations should see this low-cost administration as enabling a golden age for community philanthropy.
When Charles Schwab launched discount stock brokerage services in 1975, most stockbrokers saw it as a threat. Instead, while the role of full-service stockbroker has largely disappeared, a new industry of fee-based investment advisers has emerged, mostly created by former stockbrokers. These advisers outsource money management administration to low-cost providers such as Schwab and Fidelity, but command hefty fees for advising clients.
While the transition will be difficult, community foundations now have an opportunity to quit the business of offering donor-advised fund administration. These foundations should entirely outsource the administration of donor-advised funds and instead build world-class donor-advising services.
While many community foundations will argue that they already offer this service, the truth is few donors view community foundations as the “smartest people in the room” or “masters of the universe”, the way that investors view the best investment advisers.
In an online world where donors can find discreet information about non-profits, the “masters of the philanthropic universe” will be those people whom philanthropy adviser Lowell Weiss calls “synthesising generalists”. Mr Weiss has been a speechwriter for former president Bill Clinton, a grant-maker and advocacy specialist at the Bill & Melinda Gates Foundation, and right-hand man of super philanthropist Mario Marino.
In July, Mr Weiss launched Cascade Philanthropy Advisors. His concept of the “synthesising generalist” captures the idea that most good philanthropy draws on a range of knowledge. Community foundations, with their historical focus on a total community, not individual issues, are well positioned to help donors make the best possible philanthropic investments.
The donor-advising business is booming. New entrants such as The Hopewell Group and Cascade Philanthropy Advisors have joined established groups, including Arabella Philanthropic Investment Advisors and The Philanthropic Initiative.
It is hard work to end homelessness, save the environment or heal traumatised children. It should not be assumed that just because a non-profit sets out to tackle an issue it will have any success. But the best non-profits are making a difference and a tough analysis of the field by expert advisers would channel more resources to these top performers.
Community foundations should not simply be aggregators of philanthropic dollars, but instead become high-impact, philanthropic investment advisers.
In their groundbreaking report in 2005, On the Brink of New Promise: The Future of US Community Foundations, authors Lucy Bernholz, Katherine Fulton and Gabriel Kasper wrote: “Community foundations will face a far greater challenge than they have in the past to define and act on their distinctive value to their communities.”
Community foundations can make this change. They can emerge as the leaders of philanthropy in the 21st century. Donors deserve skilled advisers to whom they can turn for advice on how best to support the causes about which they care.
The writer is a principal and director of tactical philanthropy at Ensemble Capital Management and author of the blog TacticalPhilanthropy.com.
Sean – Stumbled upon tactical philanthropy for the first time three weeks ago… have been a regular reader since. REALLY enjoy your thoughts and unfiltered viewpoint.
Is it overly simplistic to think of this as a needed move from quantity [aggregator] v. quality [value]? I agree with your thoughts and see this as a ‘market force’ that would drive the change.
I don’t deal with Com Fdns on a daily basis… I do however think of them (along with college endowments) as being stuck in an arms race. “Who has the most assets today?” Who has aggregated the most?
Given that my word count limit at the Financial Times is 750 words, my analysis is overly simplistic itself. This whole issue is quite complex. For instance I only addressed the donor advised fund side of things and not the endowment side (that might be another column).
On the DAF side, I’m arguing that while “outsourcing” the transaction side of things is a tough transition, it will be HUGELY beneficial to community foundations as they will be able to retool and become seen as high impact donor advisors.
I agree with you regarding the arms race. Glad to have you as a reader.
Sean’s fundamental ignorance about community foundations is breathtaking.
1. Community foundations were started because banks–which housed charitable trusts–had no idea how to effectively distribute the income (at the time, they knew something about investing.)Community foundations would have people who knew their communities.
2. A prime purpose of community foundations is to build endowment for their communitities. Most endowed funds come through wills or deferred giving plans. There are still thoughtful people who don’t think they can control their philanthropy from the grave, but want to make sure that future generations have money to deal with contemporary problems. They don’t count on future generations to have the resources–after all, what could happen to philanthropy in the utterly inconceivable event that markets would crash and the biggest banks collapse?
3. Many donor-advisers count on their community foundations to help them with their current giving.To think that you can go on-line and get the information about a nonprofit is beyond naive.
I could go on, but the suggestion that community foundations are headed for irrelevance given what many of us do it just too exhausting.
And in another stunning coincidence, recaptcha’s words today are “guilt” and “and”
Sean: I’m wondering where you did your research on community foundations that would serve as the basis for such a negative assessment.
I’ve never met more outstanding “synthesizing generalists” than in the ranks of community foundation staff.
We recently did a survey of donors and potential donors in our area and they let us know that the expertise and excellence of our staff as “donor advisers” is the reason that they trust us with their dollars and refer others to us.
It’s also the reason we have had donors transfer their funds from Fidelity to The Denver Foundation, despite the fact that our fees are higher.
Our donors know that they’re getting incredible value, service, and expertise for their investment.
There’s an assumption in this piece, apparently shared by other posters, that community foundations don’t already do what Sean proposes they do.
Of course, we can do more and do it better, and lots of community foundations (disclaimer: I work at one) are putting time, energy and resources into doing precisely that–helping people make the best possible decisions so their giving is effective and enduring.
If you’re not on the ground (i.e., you’re a national company without a local presence) there is simply no way whatsoever you’re going to have the kind of community knowledge that local institutions have and can share.
Obviously I knew I’d take a lot of heat for this column. Just to set the stage, I’m not going to argue that in 750 words I captured everything I wanted to say, but my general thoughts are clear. Also, please note that I did not say that community foundations are irrelevant, I said that they are in danger of becoming irrelevant if they don’t make some changes.
Regarding your points:
1) Yes, I think this is self-evident. I do know that community foundations are suppose to be the ones who know where to give the money within their community. I think that’s an outstanding role, but I’m saying that they are not demonstrating to the public that they are outstanding and that if they outsourced all administration (instead of bashing Fidelity as they did in the 90’s and still do), they’d have more resources to devote to high-impact research and advice.
2) As I noted in the comment above, I had to choose to only focus on the donor advised fund side (my first draft laid out my thoughts on endowments, but the column was too long). However, I think that a more highly focused staff who was built around high impact research and grantmaking would be much easier to build (and gain the community’s trust) if the CF didn’t have to do administration.
3) You’ve missed my point completely on this one. I’m saying that donors *should* go to community foundations exactly because they need the advice and that the info online is not nearly enough. They need community foundations to act as “synthesizing generalists” to make sense of all the online and offline data. Community Foundations can and should be that source, but I’m concerned that donors don’t see them that way.
Lastly, it seems that you took my column to suggest that I thought donors should give their money to banks. I didn’t make that point at all. I’m suggesting that community foundations exit the administration part of the business and let Fidelity and Schwab’s donor advised funds (which are nonprofits) do the transaction processing. This would let community foundations focus on building teams of philanthropy experts and donor advisors while not getting bogged down with administration.
In the end, I’m arguing for a way that community foundations could jump over large private foundations as the leading voice driving the philanthropy conversation. Making the needed changes will be difficult and painful, but well worth it. The work that you and other community foundation employees do is TOO IMPORTANT for you to be bogged down in transaction processing.
I’m not sure where you got your information about community foundations, but it’s both simplistic in its approach and just plain wrong.
Many community foundations across the country are already doing exactly what your article says they should do. You won’t find a more knowledgeable group of people on the issues facing the places where we live and work and the programs that are effectively meeting community needs than staff at community foundations.
How do we know that? In our case, independent surveys tell us donors value our ability to advise them on great programs above everything else. And over the past two years, we’ve had nearly $100 million in new gifts come to the community foundation because people trust us to help them.
We’ve been around since 1915 because donors see us as effective, efficient, and very relevant.
Sean – I’m not sure where you’d get the idea that community foundations haven’t figured out the concept to work as “donor advisors” because that’s exactly the work that many of us do. Not only are we the experts on the issues in our region and the nonprofits that are making an impact on those issues, but we are also experts in philanthropic planning teaching individuals and families how to give strategically. And our donors agree with us – when asked why they choose The Community Foundation for Greater Atlanta, they tell us it’s because of our personalized services and our deep knowledge of community.
Also, I’m not sure how you came to the conclusion that community foundations need to get out of administration for donor-advised funds. We are proud of our strong investment strategy that balances risk and return to allow for significant annual payouts to charities each year while at the same time preserving and growing capital over time. Currently we are meeting the target benchmark in an incredibly challenging economy, and that is certainly worthwhile. In fact, our investment strategy has been so effective that we have had our donors call us and jokingly request to move their personal financial investments to us.
Sean: You missed my point: we already are synthesizing generalits. it seems to me that you’re really saying we should outsource processing and use the money for–marketing. We already spend on a staff of veteran program people who are expert in their areas. But unlike Fidelity’s “nonprofit,” were we to spend a lot of money on letting people know what we do, the charity police would be after us for overhead.
and this is really getting weird: one word onr recaptch is my brother-in-law’s last name (really).
Sean! You obviously discounted my comments I made to you during our phone interview a few weeks ago. Community foundations are working with donor advisors and their grant making NOT as aggregators of their money. What a blanket statement with nothing to back it up! Lucy and Katherine’s research came out a full three years ago – started at least two years prior to that and their warnings were heeded. I sure would like to know how you can generalize about community foundations across this country when you are still stuck on the warning that Lucy and Katherine made – and we took seriously! Regardless of how many words you are limited to in terms of your columns in The Financial Times, you made some assumptions based on old information or information you thought was real but is not. Tremendous disservice. I’m disappointed. Diana Sieger
The Community Foundation of Greater Birmingham (AL) is just one of many in our field that has focused its work in recent years around the role of community catalyst and leader on issues that matter to the people it serves. We have found, as Sean suggests, that donors are looking for that kind of in-depth knowledge as a way to make the most of their own giving.
The Catch-22 in all this, at least right now, is that few donors really appreciate the value of that knowledge when they first come to their local community foundation. Typically, they are charitably minded and they think well of their community foundation, so they use it as a repository of an advised fund. Only when they begin to work with the community foundation staff does the light dawn — wow, I never knew all this about the place that I call home.
I agree that most all community foundations strive to be excellent donor advisors. What I’m arguing is that the current business model hinders the field’s ability to really step it up and become the trusted source for donors.
Let’s be really clear that I’m not in the least suggesting that donors are better served by the commercial donor advised funds. The very fact that most of the comments seem to assume that shows that you think you actually compete with them. Community foundations should NOT compete with the commercial DAFs, instead they should outsource all the low margin grunt work of processing the administration and then charge simply for advising the donors on where to give.
Fred (who I know personally) and other comments here suggest that CFs are currently trusted advisors. In the 1990’s when stockbrokers were ditching the commission business of transacting in stocks and moving to a fee based on giving advice (therefore becoming investment advisors as I explain in the column), many stockbrokers clung to the old model and argued that they were already giving their clients great advice. I’m sure that many of them were, just like many community foundations and especially many individuals at CFs are giving outstanding advice. But the CF gets paid an administration fee for assets under management. You must align incentives and business models with what you are trying to offer.
What I’m suggesting is don’t compete on price. CFs are providing a far more valuable service than the commercial donor advised funds. Compete on your competitive advantage (understanding the local community) and outsource everything that is not a competitive advantage (the back office processing). This will free up resources to invest in the organization. That might mean marketing, but I didn’t suggest that. Invest in whatever is going to help you achieve more impact. That might mean doing more research, hiring more advisors, or investing in marketing so that you can help more donors do better philanthropy.
I knew that this column would irritate a bunch of people. But this is not a criticism of community philanthropy. I clearly state that I think community foundations should be the leaders of philanthropy. But the current business model puts you in competition with lower cost alternatives. Don’t race to the bottom on pricing. Instead recognize that the low cost processing is a godsend to the industry and allows you to focus on what you do best.
Emily notes at the end that “few donors really appreciate the value of [our] knowledge when they first come to their local community foundation”. I think that’s exactly my point. Most donors do not really appreciate what CFs do. But CFs should be educating people why they are so different. You don’t have to compete against the commercial DAFs, you can simply take advantage of their low cost services to improve your offering.
Look, just in case you haven’t read my bio, I’ll point out that my firm is a wealth management firm that uses Charles Schwab & Co to handle all the back office transaction stuff. We NEVER compete against Schwab. Our clients understand that a service that lets you trade stocks (Charles Schwab) is total different from an advisor who tells you what to invest in (an independent investment advisor).
Ani, last point. I’m sure there are many great synthesizing generalists who work at CFs. If there wasn’t I wouldn’t have suggested that CFs should be the real leaders of philanthropy. But the CF business model doesn’t work to encourage that role and the insistence by CFs to view Schwab & Fidelity as competitors (even though they don’t even try and offer advice on where to give) undermines the argument for hiring a CF in the first place.
FYI: I’m far from the first to say this stuff. I’m just one of the first to write it in a mainstream newspaper. You should definitely check out The Future of Community Philanthropy website.
What an interesting post and discussion. Thanks Sean and others.
I have read The Future of Community Philanthropy report, and I agree that your 750 word op-ed is both limiting and, obviously, provocative.
I see a few trends:
1) the Internet to continue to put pressure on philanthropy to transform traditional practices;
2) community foundations can not win a “race to the bottom” on processing fees with commercial donor advised funds;
3) community foundations that adhere to the Council on Foundations National Standards are setting a new standard for transparency among grantmakers that will create the context to encourage greater transparency among private foundations; and
4) the current economic crisis will create opportunities for community foundations to provide leadership in addressing increased human needs in their communities.
I think community foundations are up to the challenge that these times require.
Thanks again Sean for being provocative.
I think there are valid points on both sides here. Community foundations have many “synthesizing generalists” but I don’t think have found how to them to best advantage yet. Sean, I’d find it helpful if you could elaborate on what type of fee structure would allow CF’s to soar. I can’t believe that outsourcing admin functions will provide that much more money to manage all the activities that you outline. And would such a fee structure advantage the donors with the largest funds (i.e., those with the most money get access to the most services)? What kind of fee structure would provide the capital necessary yet all the community foundation to stay true to the entire community of donors, including lower-level donors?
WOW. A lot of reactions – many of them not so favorable.
I read Sean’s column very differently from early commenters. Sean’s forecasting a change in business model based on changes in another sector. That’s very cool and as another commenter wrote – thought provoking.
1) As with any business, the model changes over time. Many marketing companies, web companies, research, etc… have been moving programming and analytical ops overseas for years but they can’t outsource strategy and innovation. They do this because it’s often more cost effective and because a dedicated shop overseas does those operations better. However, they beef up their conceptual thinking state-side / in local offices. Interesting parallel here to be drawn if the reader is inclined.
2) We’re in a service economy. Sean’s simply highlighting THE service Com Fdn’s / DAF’s could be best in the world at… Some are right now but he’s talking about the whole – and more importantly, the perception.
3) In practice – another angle: This website uses WordPress and it’s beautiful. 10 years ago Sean would’ve had to pay a web firm big bucks to build the system to post and comment. Today, he uses a ready made back end system (that’s free and better) and paid or partnered with Ross Chapman to bring added value through usability, design and probably some strategy about blogging.
*Note: My examples have nothing to do with fee structures and cost savings… they have to do with linear v. conceptual thinking… assembly line v. service… admin DAF v. strategic DAF. I think that’s Sean’s point. I don’t think it is too simplistic — as a concept.
Sean – great piece. Great discussion from all.
Congratulations for getting the Community Foundation field to actively engage in your online community. It took getting them riled up over a perceived insult but at least they’re talking. Bravo!
Community foundation readers have taken my post as an attack on the industry. But Tony’s question about fees lets me demonstrate that I think community foundations are a much more valuable resource than many donors realize, but they are stuck in a limiting business model.
Community foundation’s advice is worth far more than they charge. In earlier posts on this blog I wrote about how 1) donors are shifting from viewing their giving as part of their “spending” to part of their “investing”, 2) that this shift will make donors much more willing to pay for giving advice and 3) that the value of providing giving advice is probably something like 18.5% of the donation amount.
I’m not stuck on the idea that the value is exactly 18.5%. Let’s get to it this way. Let’s assume that grantmaking advice is worth 1% of the assets in an account. If that account is a private foundation with a 5% annual payout, that means that 1% of assets is equal to 20% of grants. On the other end, let’s assume that the assets are in a commercial donor advised fund where payout averages run as high as 25%. In that case, 1% is equal to 4% of grants. The average of these two examples is 12%. Some a per grant fee of between 12%-18.5% seems to be in the ballpark. For the sake of argument, let’s just assume that grantmaking advice is worth 15% of each grant.
While I know it would be currently intolerable to most donors, I think that over time community foundations should move towards charging something like 15% of each grant made out of a donor advised fund.
Charging by assets under management incentives community foundations to gather assets. While I’m certain that most CF employees are not trying to build an empire, the very fact that everyone ranks community foundations by the amount of assets they have shows the incentives.
When stockbrokers were paid to buy and sell stocks, the field as a whole “churned” client accounts (they over traded) even though their were many great stockbrokers who did right by their clients. Aligning incentives is really important.
I believe very strongly that a $85 donation to the right nonprofit has more social impact than a $100 donation made to whatever nonprofit convinces a donor to give them money.
Of course I also think that community foundation employees should be paid a lot more, as I wrote in a previous Financial Times column. Grantmaking advice is incredibly valuable and today there are few great resources for donors. As my column pointed out, there is a growing number of non-community foundation grantmaking advisors. I think these organizations are directly challenging community foundations whereas Schwab & Fidelity are just lowering the cost of administration in a way that should enable community foundations to do all sorts of exciting new things.
I didn’t discount the comments you made in our conversation, your comments just didn’t change my mind.
More importantly, on your blog yesterday you wrote that I was saying that community foundations “could “pay more attention to” providing community knowledge and advising to our donors. Rather like saying, “don’t worry your pretty little heads” about all that business stuff.”
I find this comment incredibly demeaning to the field of providing grantmaking advice. Processing transactions is NOT the real “business stuff” of community foundations. It is easily outsourced, low margin, low value-add, paper pushing. The real “business stuff” of a community foundation is providing outstanding grantmaking advice.
I am NOT demeaning the work of community foundations, I’m saying embrace open source models that let your client/donors house their assets at the lowest cost location and focus on providing them great grantmaking advice.
Keep in mind that shifting in this way would also stop the silly way in which community foundation are forced by their business model to push donor advised funds instead of private foundations. With a true grantmaking fee model, community foundations could advise donors regardless of whether the assets were located in a DAF, a private foundation or anything else.
(Yes, I know that some community foundations have “services for foundations”, but the field as a whole competes against private foundations)
Sean: I think part of the problem in this discussion is that you talk about community foundations as a “field” (something that many of us also do), but there are more than 650 of us–and we’re not all the same. Example, when Fidelity started,and reporters called asking how we were responding to the “competition,” (their word), our response was to tell them we were not in the same business, and indeed thought the commercials provided a great service to donors who knew exactly which nonprofits they wanted to support.
I also dispute your assertion that donors will be willing to pay 15 percent for advice; there’s simply no evidence for that, and the stock broker model is not analogous for many reasons. Lauren Welsh has already posted about the reasons we manage our investment ourselves.
The reason many of us work hard to raise money (not all of it donor-advised)is not to crow that ours is bigger than yours–not all of us are boys–it’s that the more money we have, the more money we can put out in grants. Indeed, my foundation has always been committed to raising endowment, with our board’s understanding that this emphasis will not result in our bringing in more annually than our colleagues. Because a donor can find out about us today, write her will, and 30 years from now our successors will (unexpectedly)get her bequest, we measure growth over time, not annually.
And Maureen, just because a number of us have responded to Sean’s article doesn’t me that we don’t have lively discussions about a whole host of issues on other forums.
I admit freely to generalizing about the field. It would also be cool to write a long post about individual CFs that are doing creative things. My next few posts will be about how wealth managers are undeserving philanthropists and I am generalizing there too. I don’t see anything wrong about writing about the field. There are lots of examples of community foundations doing great work, but I’m advocating for a change in the business model of the field.
By the way, Let’s say a donor has a DAF which they give 5% per year out of. If a community foundation charges 1% of assets (perfectly acceptable) and Schwab or Fidelity would charge 0.3% of assets, that means the donor is paying 0.7% of assets for grantmaking advice. In this case, the donor is paying an extra 14% of each grant to the community foundation relative to the Commercials. (0.7%/5%=14%).
Just curious if you’re going to respond directly to the questions of where you did your research on what community foundations are doing now.
Clearly one of your interview subjects, Diana Sieger, of the Grand Rapids Foundation, does not feel you took any of her comments into account.
If you’re going to generalize, that’s fine. But I think it’s even more important to give us at least a general idea of where your research is coming from.
It would be helpful if you could point to a specific factual point you disagree with and I could then talk about the research that backs it up.
The vast majority of the column is my personal opinion. That opinion is a product of: Running a wealth management firm that serves philanthropists, holding the chartered advisor in philanthropy designation, reading and writing extensively on philanthropy, regular ongoing conversations with some of the leading thinkers in philanthropy, and my own first hand witnessing of the unfolding of the trend I described impacting the investment advice business. My thinking has also been profoundly influenced by Lucy Bernholz’s research (some of which I cited in the column) as well as her book.
The heart of my column suggests that community foundations should partner with Fidelity and Schwab to outsource the administration of their donor advised funds. Your comment says that “Many community foundations across the country are already doing exactly what your article says they should do.” Are you saying that many community foundations have outsourced their administration to Schwab and Fidelity?
Tony made the point that simply eliminating the cost of administration would not free up enough resources to transform community foundations. I think that is correct. However, by ditching the admin service, both community foundations AND their donors would become completely focused on grantmaking advice since that would be the core service and there would be no reason to engage a community foundation if you didn’t want grantmaking advice. It would be a good thing for donors to explicitly pay for and value grantmaking advice.
I understand why people have not liked this column. I knew it would be seen as an insult even though that was not my intention. But I’m disappointed that not a single comment has actually countered my thesis. No one has made an argument for why CF’s should retain the administration service.
One point I only hinted at, but did not have room to elaborate on, was the emerging threat of the for-profit donor advisors such as Arabella. Schwab & Fidelity rocked the Community Foundation business when they first came on the scene. I believe that the commercial DAFs are actually great partners, not competitors to CF’s core business. But the for-profit and nonprofit “pure” donor advisors that I reference in the column are aiming directly at CF’s core business. What prevents Arabella from partnering with Fidelity or Schwab and creating their own “community foundation”? Why aren’t these firms potentially dangerous to the existence of community foundations? Currently, most of them do not have a local focus. But over time that will change.
What are the arguments for why community foundations should keep the admin service? I’m a big supporter of community foundations. I just think they can be so much more than they are today and I think the key business model shift is to outsource the admin business and realize that they face a severe competitive threat from the growing ranks of for-profit and nonprofit players such as Arabella.
Anyone who’s read this blog knows that I welcome people with differing views. Here I present a vision of how I think community foundations can emerge as leaders of philanthropy in the coming decades and all I get in response from community foundation employees is questions about where I did my research and claims I don’t know what I’m talking about.
Sean – RE: your assertion that there was no emergence of a convincing argument to counter yours may have more to do with the fact that any response was not convincing because you already have the answer. I am not saying that in a glib way as I was trying to tell you a few weeks ago that our decision to administer our donor advised funds was based on a variety of factors not the least of which is that it did NOT interfere with the time we take to work more closely with our donors. We have done cost analysis studies on our donor advised fund processes and it does not pay for us to outsource – plain and simple. That is our decision.
If we are handling the administration of our donor advised funds effectively and not losing money, if donors want to do business with us because we are great in the area of community knowledge and advice and our fees are reasonable, if it working well and we are effective in our relationship with donors – then why would we adopt your argument just on the assumption that outsourcing across the board would be cost effective, freeing up “time” for community foundations to work more closely with donors, and the premise that partnering with Fidelity, etc may be an approach to consider. I’m not opposed to collaboration, partnerships, new business models, looking to the future and designing systems/processes that anticipate the future – but your argument for me, and possibly me alone, was not convincing which led to my comment on my blog re: “don’t worry your pretty little heads about it.”
Your commentary was more like community foundations don’t have the capacity to provide grantmaking services plus administer the funds in a cost effective manner. As you said in your comment back to me: “Processing transactions is NOT the real “business stuff” of community foundations. It is easily outsourced, low margin, low value-add, paper pushing. The real “business stuff” of a community foundation is providing outstanding grantmaking advice.”
My premise throughout the late 1990’s for community foundations that were solely focusing on that “business stuff” were doing so at the expense of our role in our respective communities. BUT I didn’t mean we should necessarily outsource all of the administration if it doesn’t make sense to do so.
I’m not attacking your right to have an opinion. I just disagree with it which is what you want to see more of as I understand it.
In times like these great philanthropy and rising to meet new challenges is more important than ever. Thank you for your forum – your arguments – your perspective. I do agree with you more than you may know. Peace! Diana
A good colleague of mine forwarded me the link to this article and I found it very interesting. Our foundation works with and funds literally dozens of community foundations across the US.
I read through half-a-dozen responses that sounded much like what I heard back in the 90s while on a panel with the heads of Fidelity and AOL Foundation during the White House Summit on Philanthropy. I ran a tech company at that time, so the arguments seemed pedantic back then. Now I’m in a much different role. Please contact me.