Much has been written about the need for community foundations to engage (or re-engage) in community leadership. In the past couple of years, the drumbeat has seemingly grown even louder. Publications from The Monitor Institute, Democracy Collaborative, and the Lilly Family School of Philanthropy at Indiana University have all pointed to this need.
All of these reports ask community foundations to focus on what their communities need them to become - creators of impact rather than solely accumulators of financial assets. We agree with this approach and encourage our clients to think about what they do in this context. However, there is one thing either missing or rarely discussed in these reports - how the foundation’s underlying business model must also change to accommodate this work. That shift is likely to be just as fundamental as the shift toward leadership and it too has to be long-term in nature. The problem is, it can be a very difficult transition to make.
There are two things that are absolute truths about community leadership work. First, it is very time consuming. And second, if you don’t think about how you are going to pay for it right from the start, it can become nearly impossible to manage. This is particularly true for three types of community foundations:
- Those that are “small” (under $500-million in assets),
- Those that don’t have access to significant flexible resources, and
- Those that have a large number of highly transactional funds.
If your community foundation fits any of these descriptors – and especially if it fits them all – it is vital that you take a step back and think about your business model before you move forward on leadership. We have seen far too many community foundations commit to taking on leadership, only to live to regret it financially down the road.
If your foundation is at full staff capacity (and we don’t know of many who aren’t), you essentially have two choices. You either figure out how you’re going to pay for additional staff or you give something up to free up the capacity needed to do the work. Our recommendation is actually that you think about how to do both because if you are successful, it's likely you will continue to be asked to do more by your community.
Leadership, by its very nature, is almost always accompanied by hard choices. If your community foundation can’t make the hard choices on the front end, how will it handle the even harder ones it will be forced to make down the road?
Steve Alley, Managing Partner