Overview
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:
- A community foundation is a one-stop shop for local (and nonlocal) donors who wish to contribute their cash, trusts, bequest or real property to create permanent endowments that will benefit the community in perpetuity.
- Likewise, a community foundation is a one-stop shop for local (and nonlocal) individuals, foundations and public resource providers that seek to channel their current non-endowed giving ("pass-through" resources) toward purposes that will benefit the community.
- Using the investment earnings on each endowed fund, any available pass-through dollars, and its ability to partner and leverage other resources into the effort, a community foundation makes grants, sponsors initiatives and builds capacity within the community to address local needs and opportunities.
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?
- The whole picture: Unlike nonprofits that focus exclusively on one issue area of community and economic development (CED)—for example, on attracting new business, on conserving natural resources, on providing social services, on improving job skills, or on organizing arts and cultural events—community foundations can (and often do) support the entire range of CED activities. As a result, community foundations learn across "issue silos," and can see overlooked CED connections—the community whole that is greater than the sum of its many parts.
- Strategic flexibility: Along with this vision, community foundations can offer the exceptional flexibility to respond at the right time in the right way to a community challenge. At times, they can even predict when a strategic convening, a small grant, a fund building effort, or a key collaboration might result in positive, systemic community change—and they can marshal all the activity needed to make any or all of those things happen!
- Inclusive and nonpartisan: Community foundations are one of the few institutions whose job it is to bring diverse and sometimes divergent members of the community together in a nonpartisan manner. Rural community foundations have a long-standing tradition of bringing bankers together with shopkeepers, teachers with millionaires, artists with truck drivers, pastors with drain commissioners, lobstermen with school children. The boards of community foundations typically are widely reflective of communities they serve.
- The regional resource: Even more so than their metro counterparts, in rural areas, community foundations are often the only institution that spans the many jurisdictions in a natural economic and cultural region. Indeed, in many rural places, community foundations have become the key player to pull the region together. And because they match charitable resources with community opportunities, they can handle all the sides of a program transaction, from convening to study a problem, to donor services that establish funding streams to address it, to leveraging in resource partners (outside foundations, government, business), to identifying and building the capacity of organizations to carry out the work, to offering fiscal agency to rural nonprofits—in some cases, they even operate programs themselves.
- Permanence: Community foundations, because they build permanent endowed funds from local donors dedicated to the geographic area they serve, are in a rural region to stay. To paraphrase the words of the song, "They can't take that community foundation away from you"—now or ever. Rural communities can trust that their community foundations will neither fly by night nor fade away.
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:
- Still quite young: The community foundation as an institution is burgeoning but still quite young in much of rural America. Thus, there are many more start-up (10 years or younger) community foundations or affiliates in rural areas than in urban, metropolitan and suburban areas of the U.S. That means fewer resources are available for any purpose.
- Restricted assets: It's possible that local donors typically have been designating their funds and endowment legacies toward more tangible and easily understood purposes, like scholarships, bricks and mortar projects, animal welfare, youth activities, the elderly or the arts. Only now are many donors beginning to dedicate their funds to more challenging CED purposes. Community foundations can likewise seek to build "unrestricted" endowment, which allows the board to decide the most strategic use of the resources, but getting unrestricted funds from donors with an idea can often be a hard sell.
- Invisible rural: Rural areas are remote from the action. Typically, they are not home base to philanthropic institutions. Thus, despite great creativity, energy, opportunity and poverty, rural areas garner fewer dollars from private, corporate and regional philanthropic sources that are available for anti-poverty, economic development, and community development work.
- CED learning curve: In general, donors and foundations are still on a steep learning curve about how best to use philanthropic dollars to achieve meaningful and long-lasting community and economic development outcomes. So although there may be rich experimentation underway, there's a way to go before tried and true rural CED methods are attracting regular investors.
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.