Rural Development Philanthropy Learning Network

Building rural assets to build rural livelihoods

The Aspen Institute: Community Strategies Group

On this page:

What is a community foundation?

What's special about rural community foundations and funds?

Is there a downside?

Overview

For more information

Are you newly interested in community foundations and RDP practice? The FAQ page answers some basic questions about the field.

Visit the fast facts section of the web site to learn about community foundations and the current state of RDP practice from our recent survey of the field.

More in-depth information can be found under the menu headings of "RDP Topics" and "RDP Resources."

Community foundations and other community-based initiatives that engage in RDP seek to develop financial and other resources to strengthen rural places and families, now and into the future. To do this, they use convening, fundraising, endowment building, grantmaking and other community-building opportunities. RDP intentionally engages a broad range of community institutions and individuals—especially those historically excluded from economic development, community and philanthropic endeavors.

What is a community foundation?

Community foundations are autonomous, nonprofit, nonpartisan, philanthropic organizations that raise and manage a variety of permanent endowment and non-endowed funds from a wide range of donors who care about or live in a specific geographic area. In turn, the foundation uses the stream of revenue produced by these funds to support community building and charitable activities within the geographic area served by the foundation.

In recent years, community foundations have been among the fastest growing source of charitable dollars in the U.S. Currently, more than 670 community foundations are operating in the United States, with scores growing in both developed and developing nations outside the U.S. Community foundations are governed by a board of directors, typically a set of local leaders whose concerns, roles and demographic mix broadly represent the population of the place the foundation serves.

A community foundation offers three primary services to its designated geographic area:

Not all community foundations are created equal. Indeed, community foundations can differ from one another a great deal, depending on their origin, the priorities and values set by their boards, and the culture, economy and demographics of the community itself. In general, some community foundations focus more on the endowment-building aspect of being a community foundation; others target most effort on the community-building purpose of the foundation; and many try to strike a healthy balance that sustains both purposes.

Often in rural places, rather than set up a separate community foundation, communities set up a local fund that affiliates with a larger community foundation in their region or state. In this case, the "lead" foundation offers administrative and financial services, it may help with start-up efforts and ongoing training, and it likely will require participation in some of its region-wide activities. But "affiliates" or community funds generally exercise total local control and initiative over how to build their endowment funds and make grants or conduct programs to better their community.

What's special about rural community foundations and funds?

Rural community foundations are unique in their ability to see and influence a wide and interconnected array of rural community and economic development challenges and opportunities. Why are they extra-special rural actors?

Is there a downside?

Despite these attributes, some rural-focused community foundations and affiliate funds may have limited resources to devote to rural community and economic development outcomes and strategies. This may be true for several reasons:

It is worth noting that these—and other—potential drawbacks are true for the majority of issues and nonprofit actors in rural areas. For example, like any nonprofit (rural or not), community foundations can experience extreme changes in their character and focus when their staff leaders change—unless values and culture have been well established in the board. At the same time, the fact that they hold permanent endowments for specific purposes requires that community foundations stay focused to a certain extent.

So, despite the relative youth and low resource base of many rural-focused community foundations, by comparison to most rural-based organizations, they emerge a potentially effective and very flexible institutional actor in rural communities and economies. And because community foundations do have some similarities in basic structure and purpose, it can be easier to work with them across communities than with organizations that differ widely in purpose and structure.

The current scarce-resources climate requires rural community foundations to make difficult choices to determine the best, most sustainable role to play in rural community and economic development efforts. Thus, as community foundations experiment with ways of building strong rural communities and influencing the economic well being of rural families, it is important to share and learn from the program and capacity-building strategies, pitfalls and accomplishments of others—in order to move the field toward greater effectiveness and impact. The community foundation field has developed a culture that encourages information sharing and practice improvement—which surely offers another attractive reason to build and partner with community foundations.