In the fall of 2019, we discussed a research project on community foundations by Dr. Laurie Paarlberg, Charles Stewart Mott Chair on Community Foundations and professor of philanthropic studies at the Lilly Family School of Philanthropy, and Dr. Marlene Walk, assistant professor of public affairs at the Paul H. O’Neill School of Public and Environmental Affairs.
In this post, Drs. Paarlberg and Walk discuss the findings of their study, which involved interviewing leaders of six, geographically diverse community foundations with a wide range of assets. The scholars also reviewed their websites and analyzed their Form 990s.
How would you define community leadership?
Our interviews suggest that community leadership is a strategic orientation, which is characterized by the value proposition of the organization—why it exists –and the business model—how the community foundations seek to create value for their communities. Community foundations that are oriented towards leadership are seeking to change community conditions for all members of the community by activating and convening community resources, which includes both donors and other organizations in the community.
What were some of your findings? Anything surprising or particularly interesting that stood out to you?
Although we expected that every organization takes a different path to community leadership, we were surprised about the commonalities across communities. First, in popular management literature, there are often stories of heroic change agents. In our interviews, we heard less about heroic individuals and more about the importance of collective leadership, both board and executive leadership, working side by side to “do something more for the community.”
Second, we often think about change and leadership as individual characteristics, but we heard a great deal about community leadership being about “community change.” Community leadership wasn’t just about a shift in the practices of a single organization, but it really involves shifting the mindset of the entire community to think about new ways of working together, leveraging diverse resources, and embracing inclusive outcomes and practices for the community. As one community foundation leader describes, “We’ve been learning together … this is really changing the culture of the community.”
What were the paths to community leadership for the community foundations you interviewed? How were these paths similar or different for each foundation?
While all organizations that we talked with were at different stages of development when they began the path towards community leadership, we did find that there seem to be some certain pre-conditions. First, each community foundation leader emphasized the importance of “having their house in order.” This involved having the administrative systems in place to be accountable for their resources and also to understand their business model, i.e. how they are making a difference.
Second, we heard a lot about the importance of strong systems of shared governance—the important role that boards play in sharing a strategic vision for change, as well as bridging the organization to the community.
Finally, there was common agreement that the organization had to be willing to take on the risk—both financial risk and reputational risk—of stepping into new roles. One community foundation described the risk of undertaking a new project without any committed financial resources. But community leadership is more than “making our community a nice place to live”—it involves going upstream. As one community leader describes, it involves addressing “systems so that we ameliorate the symptoms.” As a result, it involves taking on issues and “taking a position knowing you might offend …leadership is having opinions and being able to disagree with our friends.”
How is the path to community leadership an iterative process?
We often think about organizational change as a time-defined process that has a beginning and an end. You start down the change path and at some point, you are there. The path to community leadership is slightly different because it is a path to a new strategic orientation. Strategic orientations are adaptive. There will be ongoing learning and shifts as organizations evolve and community needs change. For example, we heard about community foundations trying new ways to leverage capital.
However, changing community conditions is complex. If we had the answer about how to end childhood hunger, we’d have implemented it.
Changing mindsets also takes a long time. There may be steps forward and steps backward as individuals within the organization and community take different times to embrace new ideas and ways of doing things. It’s about bringing the community along.
What are the costs to community leadership?
Our respondents clearly emphasized that leadership comes with costs. Leadership is time and resource intensive. Convening, facilitating, and staffing programs involves new skills and may involve shifts in staff and leadership. Undertaking new projects and initiatives involved a reallocation of funding. Some leaders were fearful initially that the move to community leadership would negatively impact their donor base. Although leadership positions threaten the status quo, overall donors supported the movement towards community leadership.
How does community leadership create value?
Community foundations play important roles in their communities regardless of their strategic orientation. Acting as a steward of community resources is important. Supporting the capacity of local nonprofits through grant making is important. But for those community foundations who embrace community leadership, the emphasis on changing conditions highlighted some exciting initiatives that had the potential to re-shape communities.
For example, some community foundations were engaged in place making—both physical placemaking (e.g. building structures), but they were also fostering a sense of community by promoting connections and shared identity among local residents. Some community foundations were taking bold steps to build human capital in their community by fostering local entrepreneurship, partnering on economic development projects, and providing reverse scholarships for youth to return home.
Beneath these tangible products were efforts to encourage full community inclusion in local decision making, to address power inequities within their own organizations, e.g. rethinking grant application processes, and to tackle some really tough structural issues in the community, such as racial inequities in health outcomes.
Beyond specific projects, what is most interesting about community leadership is that it changes the business model of community foundations, or how they do their work. We heard great examples of foundations trying to pull together diverse resources other than capital. They were rethinking their roles of fundraiser and grant makers, emphasizing the importance of leveraging capital from not only their own resources, but partnering with local government, other philanthropies and even business to tackle tough issues. And then we heard about several cases where organizations were creatively leveraging their own endowments to invest in their own communities.
Does community leadership ever end? Why or why not?
We love this question. We don’t think that we know yet. We have to see some examples of organizations that begin the path down community leadership and didn’t make it. They either stalled or stopped at some point in time.
Management theory is fun. If we think about innovation in the commercial sector, we’ve got lots of examples of highly innovative companies that were leaders in their field and didn’t make it, like Polaroid. Then on the other hand, think about Apple. Apple’s core strategy has always been about ongoing innovation and excellence in product design. Because of their endowment structure, few community foundations are going to go the financial route of Polaroid to bankruptcy, but they may lose relevance in their community if they don’t adopt a culture adaptive to community leadership. We don’t know much about how community foundations (or any foundations) build and retain a culture of adaptation that is going to keep them relevant as community leaders.
At what point would these foundations know that they are “ready” to pursue a greater community leader role?
Our interviews suggest that starting the path to leadership requires having strong administrative systems already in place, CEOs and boards both engaged in strategic decisions, the willingness to take risks, and the commitment to an inclusive community process.
What can other nonprofits, corporations, or government do to engage with and assist community foundations intent on or currently pursuing a community leadership role?
We studied community leadership in the context of community foundations. But we are not so sure that community leadership, although the term is banded about in the community foundation field, is limited to community foundations. From community to community, we increasingly see systems of philanthropic and nonprofit organizations acting together to address shared issues. For example, we are currently meeting with United Way and community leaders who are working together in innovative ways, and supporting each other rather than defending turf.
We increasingly think about philanthropic ecosystems, which includes all of the actors in those systems who act as community leaders and take a commitment to shared power and shared outcomes and inclusivity.
A note on methods: organizations were selected based on expert recommendations of community foundations that were successfully engaging in community leadership. Data was collected from phone/video interviews with leaders from six community foundations in three states (six CEOs, one program officer, and two board members).
The authors recognize that this study is not meant to predict the conditions under which organizations can successfully engage in community leadership. Instead, this study is designed to understand the processes by which organizations move to a different model of community philanthropy.