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Making Informed and Bold Steps

Posted by: Diana Esposito on 10/3/2011

Last week, the Council on Foundations hosted its annual conference for community foundations.  Over 1,200 participants representing approximately 400 community foundations gathered to learn and connect.  

The conference theme was “steps” – what bold steps, fresh ideas and new solutions are out there for community foundations?  As I think about my work with CF Insights, I am inspired .  The work we do in partnership with the Council on Foundations and the Community Foundations Leadership Team extends the learning and support year round – making sure support is available when foundation leaders get back to their desks and board rooms.   Each day we focus on providing resources that help community foundations advance, one step at a time.

Community foundations are a source of stability, permanence, and strong community values (‘For good.  For ever.’ as many say).  But the world is ever-changing.   Donor priorities, community needs, philanthropic opportunities, competitive offerings, and economic circumstances are constantly shifting.   Making sure the community foundation can sustain its strength, stability, and leadership is essential – and the business model needs to continually evolve.  

Community Foundations recognize this as the challenge it is.  In a plenary session on competition, Silicon Valley Community Foundation CEO, Emmett Carson stressed the need to fix a “broken” community foundation business model.   He urged community foundation leadership to take steps to differentiate themselves.  His comments sparked conversation and resonated with many in attendance.      

An essential addendum to the conversation is that many community foundations are taking action.  CF Insights’ research and work with our members demonstrates that innovative community foundations are constantly tuning the business model, using data to make smart and often bold decisions.   

Here are some bold steps I have seen in the past year:
  • Focused on bringing a legacy business model into the future, Arizona Community Foundation faced a few key challenges:  86% of revenue from asset-based fees; an operating budget $400k higher than expected revenues in 2010; and a fee schedule that did not differentiate between products and services that operated differently.  Guided by Fueling Impact, ACF was able to define new goals, develop new revenue sources, and adjust current operating practices.  By taking a hard look at the data, ACF made smart decisions to better serve the interest of their community.
  • Building the case for action based on facts, Community Foundation of North Texas is working hard to meet National Standards, build endowment, grow operating revenues, and adjust their fee structure to match business model priorities. This savvy foundation worked with CF Insights to benchmark similar community foundations and explore a range of metrics:  the history of asset growth at peer foundation, the types of gifts, and staffing ratios.  The data has built the case to take action, adapting management practices to achieve significant new goals.  
  • Understanding the foundation’s economics has led The Greater Cincinnati Foundation to increase its revenue base and tune-up its product line.  The foundation worked with CF Insights to conduct an in depth economic analysis. As they discovered, adapting your business model is a lot easier if you understand the costs of your products and services.   As a result of looking at the data, they made some immediate changes to make their services more sustainable, including adjusting fees.

It is essential that as the world keeps changing, community foundations keep learning from one another and their colleagues across different philanthropic communities.  Grounded in data, community foundations will be able to leap forward into the future, or fine tune their business models as they go, ultimately strengthening their ability to achieve greater social impact.

Diana Esposito works in member services at CF Insights, an organization that helps community foundations improve performance and sustainability.


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