Local Foundations Form New Coalition To Aid Poor Youths

By Jonathan Weisman — April 10, 1991 11 min read

Thirty of the nation’s largest community foundations last week announced the formation of a coalition to help redouble their efforts to address the educational and other needs of low-income youths.

The Coalition of Community Foundations for Youth, established with organizational help from the Rockefeller Foundation, will serve as a clearinghouse and sounding board for innovative projects to promote “the intellectual, social, physical, and moral development of poor children and their families,” according to a statement released by the group in Dallas at its first formal conference.

The activities of the coalition, foundation observers said, may serve to focus the attention of the burgeoning community-foundation movement more directly on problems of education and the poor--areas in which some critics have labeled community-fund efforts inadequate and overly conservative.

Last week’s announcement is one of a series of developments that have thrust community foundations to center stage in the world of philanthropy. Under the spotlight, the funds have received praise from some, who assert that local foundations are becoming the most vibrant sector of American philanthropy, and stinging criticism from others, who charge that the funds favor established causes at the expense of more pressing needs.

But critics and proponents agree that community foundations have at least the potential to become a critical lever for helping to relieve many of the nation’s domestic problems at the grassroots level. And because of their grassroots nature, the foundations are seen as an accessible source of financial support for education reforms.

“You’d better find out about the community foundation in your area, and if you’re not part of the action, you ought to be,” advised Charles Johnson, vice president for development at the Lilly Endowment in Indianapolis, which has launched an initiative to set up new community foundations in Indiana.

Number, Assets Growing

Fifteen years ago, there were about 220 community funds nationwide, with combined assets of $1.1 billion. Today, according to Joanne Scanlan, director of community-foundation services at the Council on Foundations, there are almost 400, with assets totaling more than $6 billion. The council’s community-fund membership has increased in the past five years from 175 to 237 members.

Such foundations are designed to assist local nonprofit agencies and projects with funding that is drawn heavily from a variety of local contributors.

Of the $315 million in grants made last year by local foundations, about one-third went to education, Ms. Scanlan said. In contrast to the higher-education emphasis of corporate and family foundations, virtually all of that education giving has gone to precollegiate programs.

“In the last few years, community foundations have been much more responsive to K-12 education,” said David Bergholtz, executive director of the George Gund Foundation in Cleveland. “They’ve really come into it now in a major way.” (See Education Week, Feb. 24, 1988.)

But leading community foundations have also come under sharp scrutiny in an ongoing series of reports by the National Committee for Responsive Philanthropy, a watchdog group comprising representatives from the philanthropic community and various advocacy groups.

The NCRP charges that community foundations have been too timid in their grantmaking and have neglected the truly disadvantaged members of their communities in order to avoid offending their boards of directors, drawn predominantly from the local “establishment.”

Although a third of community-fund grants go to education and more than a third go to health and social-service projects, critics maintain that the grants typically avoid the core problems communities face. Social-service grants, for instance, often assist long-established groups, like the Boy Scouts and the Girl Scouts, that do not specifically address poverty issues.

Likewise, critics say, education grants have been confined mainly to research, tutoring, and enrichment programs, such as field trips, rather than such social-change projects as promoting the involvement of low-income parents in education or the wholesale restructuring of schools.

In a 1989 report entitled “Community Foundations: At the Margin of Change,” the NCRP asked six large and well-respected foundations to review their grants and identify which were targeted at the “disadvantaged.” That term was defined to include the poor, racial and ethnic minorities, women, the disabled, other victims of discrimination, consumer and environmental activists, and others “facing overwhelming odds in their pursuit of a better quality of life.”

Only one of the six funds, the Philadelphia Foundation, reported that it committed more than half of its grant dollars to this broadly defined group. The others committed between 2 percent and 28 percent, the report said.

A follow-up study released in February criticized the Seattle Foundation for what the authors said was the lack of a clear focus on the disadvantaged and of a strategic plan to address that city’s most pressing needs.

Reports on the Philadelphia Foundation and the Cleveland Foundation are due out this month, with a report on the California Community Foundation in Los Angeles to be released next month, according to Robert O. Bothwell, the NCRP’s executive director.

“By and large, if you look at the 350 or so community foundations, there isn’t very much risk-taking and innovation,” said Pablo Eisenberg, president of the Washington-based Center for Community Change, which provides technical aid to community-based organizations nationwide. “They’re more oriented toward guaranteed success.”

‘An Aura of Avoidance’

As far as education is concerned, critics contend projects launched by community foundations have tended to stress short-term programmatic initiatives rather than long-term systemic reform. Even supporters acknowledge that the foundations typically have been reactive rather than “proactive” in meeting their communities’ education needs.

“There is a sense of feeling overwhelmed about how to approach the bureaucracy of precollegiate education, how to remain neutral in the political arena surrounding education, and how to make an impact on such comparatively large public budgets with a few dollars,” noted a report, “Community Foundations As Catalysts: Leadership in Education,” released in 1989 by the Council on Foundations.

“The general aura is avoidance--wait until educators knock on the door ... provide funding which is relatively easy to administer ... make people feel good,” the report continued.

Such criticism has stung the philanthropic community, which is accustomed to being “the good guys,” said John Ruthrauf, a former director of the Philadelphia Foundation. But whether it has moved community foundations toward a more innovative stance is still subject to debate.

The new Coalition of Community Foundations for Youth includes all six of the foundations studied by the NCRP--the funds based in Atlanta, Boston, Cleveland, Los Angeles, Philadelphia, and Seattle. The group, whose activities will be financed by the member foundations, plans to meet yearly to share ideas on youth-related initiatives. It will also set up an information network managed by the Council on Michigan Foundations in Grand Haven, Mich.

Hugh Price, a vice president of the Rockefeller Foundation who helped put the coalition together, said the foundations joining the effort were reacting to the “shortchanging of our children,” not to the criticisms raised in the NCRP reports.

“Their reports ... are useful and important prods for all of us to look at a group that we as a society have a tendency to overlook,” he said. “This is not a reaction, though.”

Conduits to the Grassroots

A potentially more effective prod to the local funds could come from larger philanthropies, which, like Rockefeller, have recently taken a keen interest in community foundations.

The Lilly Endowment, for example, last summer began a $47-million program to help build at least 20 community foundations in Indiana over the next 15 years. Mr. Johnson of Lilly said his foundation would not dictate the uses of the matching and start-up grants it provides, but added that “our assumption is that education will be high on any community’s needs.”

In February, the W.K. Kellogg Foundation in Battle Creek, Mich., announced a $5.5-million grant for the Council of Michigan Foundations and $29.5 million for various community foundations throughout Michigan to promote their growth.

“We would like to work with [school] districts that would like to fundamentally change the way they’re operating,” said Joel Orosz, a Kellogg program director working on the community-foundation project.

Local foundations are increasingly being seen as conduits for big foundations to funnel grants to the community level, Mr. Orosz added.

“We recognize community foundations can do some of the things we never can do,” he said. “They live in Reed City, Michigan. We don’t.”

With large foundations increasingly geared toward long-term systemic projects, their collaboration could have some effect on community foundations, observers say.

By law, however, challenge grants from other foundations cannot be the mainstay of community foundations’ funding.

A Compromised Focus?

A 1969 federal tax law classified community foundations as public charities, clearing the way for an influx of tax-deductible contributions. But the law also stipulated that the foundations raise a substantial portion of their donations from a broad range of community sources.

“When you look at the funds that are raised, the assumption is that, if you had a body that clearly represented the community, you’d end up with a broader constituency,” Mr. Bergholtz of the Gund Foundation observed. “But the politics of that may end up making [community foundations] more conservative than they thought they’d be--or at least more cautious.”

Multiple sources of income have led to small, “patchwork” education grants not conducive to long-term reform efforts, Mr. Ruthrauf, the former Philadelphia Foundation director, said.

And a fragmented funding base often forces compromise at the expense of focus.

“A foundation like Lilly will say, ‘We really think K-12 education reform is where we ought to put our focus,”’ Mr. Johnson said. “Community foundations have to deal with issues where there is a consensus.’'

While community foundations are reaching out to new donors, their mainstay is still affluent members of the community, Ms. Scanlan of the Council on Foundations said.

Those well-to-do citizens also tend to dominate boards of directors, acting as a brake on foundations wishing to embrace reform agendas, said the NCRP’s Mr. Bothwell.

Most foundations face two radically different constituencies, observers point out: affluent donors who have power and more marginal groups who seek to gain power. But community foundations, which by law cannot rely solely on an endowment but must constantly seek fresh community support, face the dilemma more acutely than do other philanthropies.

Community-foundation officials predict that, as the local funds grow and become better established, they will gain more flexibility in how they channel their money. Much of their effort in recent years has been devoted to building endowments and respect, they say, but that phase is drawing to a close.

“In recent years, community foundations have worked much harder in learning the part of the job about where their money should go,” Ms. Scanlan said. “I think people are getting more confident about being proactive, especially as foundations are able to [afford] staff that work full time investigating, having meetings, and finding out what they can do.”

Already, examples of education innovation stemming from community foundations abound, supporters say. For example:

  • With a $418,000 grant, the El Paso Community Foundation in Texas has developed a locally tailored environmental curriculum that teaches students how to live conscientiously in their fragile, desert ecosystem.

  • The St. Paul Foundation in Minnesota has begun a $410,000 community-outreach project to encourage parents to embrace the growing minority population in their local public schools before racial and ethnic diversity becomes the divisive issue it has been elsewhere.

  • The $800,000 Project Bridge, sponsored by the Hartford Foundation for Public Giving, sets up contracts with students and parents in that Connecticut city to exchange assurances that the students will not drop out for work-readiness training or jobs.

  • After the Wisconsin legislature adopted a voucher plan for poor children in the Milwaukee schools, the Milwaukee Foundation stepped in to educate low-income families about special schools and alternative programs available to them.

But while advocates are confident that community foundations will achieve their potential, some critics say they still see no changes in governance that will lead to the widespread adoption of new directions.

“With the direction these foundations are going, their potential will remain unrealized,” Mr. Bothwell contended. “The disadvantaged will continue to get the crumbs from the table.”

A version of this article appeared in the April 10, 1991 edition of Education Week as Local Foundations Form New Coalition To Aid Poor Youths