Local Foundations Shift Strategies on Schools

For decades, the 50-year-old Donnell-Kay Foundation , a family-based private philanthropy in Denver, saw its work as parceling out grants of $5,000 to $10,000 to nonprofit groups throughout the community. But that "quiet and sleepy" mode of operation started to change about 12 years ago, says Tony Lewis, the organization's executive director.

When Mr. Lewis was hired in 2000, it was with the express purpose of honing the foundation's focus on education. Donnell-Kay now sees itself not just as a grant provider, but also as a catalyst for driving the education improvement conversation in Colorado. That role offers the small foundation, with an endowment of about $28 million, much more potential influence than giving out small, individual grants.

Driven by national trends in the economy and in philanthropy, other city-based foundations are going through the same shift in focus as the Donnell-Kay Foundation. Instead of serving as passive boosters of their communities' traditional public school systems, these organizations see themselves driving a discussion around transformation and innovation that is, they say, agnostic on how...