Shifting the Meaning of Community: U.S. Community Foundations Increase Their International Giving - PEAK Insight JournalPEAK Insight Journal
Shifting the Meaning of Community: U.S. Community Foundations Increase Their International Giving

Shifting the Meaning of Community: U.S. Community Foundations Increase Their International Giving

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We tend to think of community foundations as place-based institutions, solely serving a community of people living within a defined geographic area through their grantmaking. Research by Foundation Center and the Council on Foundations, however, shows that international giving by U.S. community foundations grew more than three-fold from $103 million in 2011 to $315 million in 2015, a much more rapid increase than the 29% growth in international giving by all U.S. foundations. What explains this growth and what else do we know about global grantmaking, leadership, and engagement by U.S. community foundations?

In July 2017, Foundation Center and Council on Foundations co-published Local Communities with Global Reach: International Giving by U.S. Community Foundations, a first-of-its kind analysis of the international grantmaking and global engagement of U.S. community foundations, looking primarily at grants awarded from 2011 to 2014. In August 2018, we published The State of Global Giving by U.S. Foundations, 2011-2015, a detailed analysis of international giving by 1,000 of the largest U.S. foundations, including community foundations. These two reports are the ninth and tenth respectively in a series of collaborative research on international grantmaking by our two organizations, dating all the way back to our first report in 1997.

Building on what we’ve learned through our research, in this article we share some of our insights on what is driving the growth in international giving and global engagement by U.S. community foundations and what it means for our sector.

As Community Foundations Grow, So Does their International Giving

While international giving by U.S. community foundations grew more than three-fold in total dollars from 2011 to 2015, it remained relatively stable as a share of these foundations’ overall grantmaking, staying at around six percent from 2011 to 2014, before increasing slightly to eight percent in 2015. Rather than a shift toward international grantmaking, the increase in international grants is driven by the overall growth in giving by community foundations, which increased by 52 percent during the period, from $2.7 billion in 2011 to $4.2 billion in 2015.

A Donor-driven Trend?

From 2011 to 2014, 74 percent of international giving by U.S. community foundations came from donor and corporate advised funds. These are funds held by the community foundation from which an individual, family, or corporation may recommend charitable organizations to receive grants. The community foundation verifies the mission and charitable status of the recommended grantees and oversees all financial management and reporting.

Another 18 percent came from supporting organizations, nonprofit charitable corporations, or trusts that qualify as public charities due to their affiliation with the community foundation. A supporting organization can serve as an alternative to establishing a private foundation as it can provide greater tax benefits and allow the donor to take advantage of the administrative and grantmaking expertise of the community foundation.

Just eight percent of community foundation international grant dollars were from discretionary and interest funds.

Given that community foundations’ discretionary funds are typically intended to serve the local population within a given geographic area, it’s not surprising that their international grants come primarily from donor-directed vehicles. However, this does not necessarily mean a given community foundation’s international giving diverts it from its mission or community focus. For some community foundations, a global framework and a broad and inclusive definition of community is integral to their mission, while others engage internationally in various ways beyond grantmaking. Some also fund local nonprofits working internationally, thereby also supporting their local nonprofit community.

Silicon Valley Community Foundation

The growth in international giving among community foundations was largely driven by Silicon Valley Community Foundation (SVCF), whose international grantmaking accounted for 63 percent of all international giving by U.S. community foundations in 2015 and 48 percent of all international grant dollars awarded between 2011 and 2015. However, even when excluding SVCF, international giving by U.S. community foundations increased by 71 percent from 2011 to 2015, which is still a much more rapid increase than the 29 percent growth in international giving for all U.S. foundations during that same time period.

Established in 2006 as a result of the consolidation of two community foundations in the Bay Area, SVCF has grown into the largest community foundation in the U.S. When SVCF was created, the organization embraced a new definition of community, moving beyond a place-based construct in order to better reflect the diverse philanthropic interests of its region and leveraging connections with local, national and global networks. To support its international grantmaking, SVCF manages a global charity database with more than 11,000 vetted organizations in 88 countries. Although SVCF made $198 million in grants for international programs in 2015, that represented less than a quarter of its overall grantmaking that year, and the majority of SVCF’s grantmaking continues to be for domestic programs.

Community as Place Vs. Community as Belonging and Solidarity

The adoption of a more inclusive understanding of community, beyond a geographically determined one, is by no means exclusive to Silicon Valley Community Foundation. SVCF, which serves a community that is more than 35 percent foreign-born, is often seen as the primary example of a demographic-driven model for global engagement. However, our research highlights other community foundations committed to reflecting the diversity of their communities by channeling donor funds to issues at home, around the country, and globally. Such motivations were reflected in interviews with community foundation representatives from Boston, Seattle, and Houston, where diverse, globally-engaged, and diaspora populations are using donor-advised funds to support programs around the world.

Not a New Trend

A broader definition of community is not a new concept to the field of grantmaking, and international giving is not a new practice among community foundations. Our data show that while international grantmaking is becoming increasingly common among community foundations—in 2014, 85 percent of large U.S. community foundations made at least one international grant, compared to 67 percent in 2002—it is not entirely a new trend. Our analyses of international grantmaking in the 1990s show international grantmaking on the rise among community foundations at least as far back as 1994, and every year since 2002 at least three percent of grantmaking by community foundations in Foundation Center’s research set was international.

Not Just Grantmaking

Although the majority of international giving by U.S. community foundations comes from advised funds and is thereby donor-driven, some community foundations offer global grantmaking options to their donors as a strategic form of community leadership. For example, in 2008 the Seattle Foundation created the Seattle International Foundation, a supporting organization that aims to increase and enhance international philanthropic efforts throughout the Pacific Northwest region. The Boston Foundation also houses New England International Donors, a giving circle and initiative to encourage international giving by individuals and families across the region.

For some community foundations, grantmaking is not a primary avenue for global engagement. The Cleveland Foundation, for example, has a long history of engaging globally without a significant amount of international grantmaking and works instead through trade delegations or by hosting international fellows. Similarly, many community foundations engage with sister cities around the world.

We also know of examples of structured peer-learning networks among community foundations focused on sharing knowledge and best practices on international grantmaking. From 2010 to 2012, the Community Foundation Global Giving Network, a pilot project based at the Boston Foundation, provided support to several community foundations undertaking equivalency determination, expenditure responsibility, and other due diligence activities. The Building Broader Communities in the Americas initiative, created in 2015, is also an attempt, supported by the CS Mott and Inter-American Foundations, to link U.S. community foundations with peer community foundations abroad and build transnational partnerships that link immigrant communities in the U.S. with communities of origin in Latin America.

Little Evidence of U.S. Engagement with the Global Community Philanthropy Movement

Despite some of these promising examples, there is little evidence of U.S. community foundations engaging with their non-U.S. peers. For example, between 2010 and 2014, we did not find a single grant between a U.S. community foundation and a community foundation in the Global South. (If you’re a U.S. community foundation and you did award a grant to a Global South community foundation during this period, let us know!)

In 2014, the community foundation field marked an important anniversary: 100 years of community foundations in the U.S. To commemorate this milestone, the Community Foundation Atlas was launched at the Council on Foundations’ Community Foundation Conference in Cleveland. The Atlas has increased the visibility of community philanthropy organizations, and facilitated partnerships and peer learning among community foundations globally. It lists more than 1,800 community foundations on five continents, of which more than 70 percent were created after 1990.

The rapidly growing global network of community foundations provides community foundations with a valuable opportunity to connect with and learn from their peers around the world. U.S. community foundations can now leverage the local expertise of community foundations outside the U.S. to reduce the burden of vetting individual organizations, achieve more impact, and strengthen the enabling environment for philanthropy globally, providing an exciting opportunity for expansion and growth of global activity by US community foundations in the future.

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