Published: 27th Oct 2015

markpierceCommunity Foundations were developed as a cost effective and efficient way for individuals and companies to become involved in philanthropic giving. Rather than set up their own expensive charitable trusts, philanthropists can use locally-owned Community Foundations to look after charitable assets, identify fundable projects and ensure they get feedback on impact.

The Community Foundation movement started just over a century ago in the US. It spread across the globe, with things really getting going in the UK from the mid-1980s. Our role is more limited than that of our US counterparts, reflecting differences in the role of government and civil society. But the biggest Community Foundation outside of north America is here in Newcastle-upon-Tyne.

What differentiates us from other charitable trusts? We think it is primarily that we are closer to communities. We have to be. Our funding is largely distributed according to the wishes of local philanthropists, and our offer to them hinges on our knowledge of local civil society organisations and communities. This inclines us towards networking, and we connect local people from many walks of life in both our governance and operations. It also helps that we specialise in high volume, small grant making that reaches deep into communities, supporting smaller groups and those in most need.

‘The most obvious gap in philanthropy is spatial. Put simply,

Newcastle gets a better deal than Sunderland because more rich people live there’

Now, I’m sure some readers will be hostile to philanthropy, and argue that it is all about out-of-touch rich people determining how surplus wealth is used, rather than paying more taxes. And tax breaks for philanthropy, from their perspective, are often perceived as an infuriating scam. And sometimes – very rarely – they are misused as such and that makes things worse.

But like it or not, if the age of austerity endures, philanthropy is becoming an important part of civil society funding. So here’s the good news about our end of the market. Firstly very few – if any –of our donors are out of touch with local communities. After all, many built their fortunes by being astute and understanding what the people around them needed and wanted. And no one seems to come to their local Community Foundation with the idea that giving us money as a permanent gift to pay out in grants will benefit them financially. Motivations tend to be those most of us might share: a feeling, rooted in personal experience and a desire to help others, that community life should be better.

There is some bad news, though. Community philanthropy is not yet a major force in local funding. Remember Northern Rock Foundation? In 2014, winding down, it made just £7m in grants. But that’s not much less than all four Community Foundations in its area of benefit combined. So we have to make the most of things, and our dual task is to try and raise more philanthropic funding whilst working to achieve maximum impact with the funds available.

Since 2013 we’ve focused our efforts on an initiative called Vital Signs. This involves producing regular community philanthropy reports, based partly on research but also on consultation with local people about how philanthropic funding can have maximum impact.  It has been a fascinating exercise,  engaging people at all levels from community activists to third sector and statutory professionals and philanthropic donors. By 2017 we hope that Vital Signs will extend from Northumberland to Teesside.

So what is this initiative telling us? To some extent it is revealing the limitations of philanthropy. The most obvious gap in its offer is spatial, reflecting the distribution of people with money to give. Put simply, Newcastle gets a better deal than Sunderland because more rich people live there.

Added to this, it occasionally highlights the gaps that exist between communities’ needs and the more specific, occasionally idiosyncratic, interests of donors. But at the same time it has promoted critical thinking about what we want to achieve through local philanthropy, and posed some significant questions: How can we help regenerate local economies with relatively limited resources? Should we focus on helping high achievers within the education system, or on raising attainment across the board? Should subsidised arts be expected to demonstrate economic and social outcomes?  In this way Vital Signs is beginning to realise the potential of Community Foundations as vehicles for developing a broad based consensus around issues vital to the future of the region.

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