14 June 2016

Community Philanthropy: it’s a thing, and you need to know about it

This post originally appeared on the Oxfam “From Poverty to Power” blog on 2 June.

It’s almost always the same argument. Or excuse. Governments joining the accelerating global trend of restricting civil society at home like to claim that they are protecting their country against meddling “foreign powers”.

No one has to like, or agree, with that point of view in order to take it seriously, and perhaps even to see the onslaught as an opportunity. As the saying goes, a crisis is a terrible thing to waste.

The assaults on civil society globally—as outrageous as they are—could help to provoke a hard look at the prevalent model of external funding, particularly of human rights and social justice issues. Why, when we all agree that developing country governments weaning themselves off aid and raising more domestic resources is a good thing, do aid donors and activists not apply the same logic to Civil Society Organizations (CSOs)?

Luckily, the world isn’t waiting for the aid business to wake up. For some years now, aid from international donors has no longer been the only “show in town”. Development funding is already starting to diminish or to become more directly associated with countries’ commercial interests. And, at the same time, local philanthropic sectors are emerging in many parts of the world that were traditionally considered purely “aid recipient” countries. The super-wealthy are establishing their own foundations (although relatively few are yet interested in achieving their mission through grants to civil society) and many of these already overtake their European and North American peers in asset size (such as in China). And in many countries, a growing middle class has its own disposable income, and an increasing appetite for giving to social causes.

Raising money locally can be hard work. It’s far easier, of course, to submit a proposal to an eager external donor who shares your goals, and, let’s not deny it, your jargon.

But local funding is not just about the money. It is a crucial—and sadly overlooked—part of a larger political strategy for constituency building, for getting people to learn and care about your cause, so that when your organization is threatened with closure, there are people in the community that may actually speak up.  Just as taxation strengthens the social contract citizens and states, local fundraising can improve the accountability of CSOs to the people they serve.

Shifting the balance of funding power (because yes, it is power, even if we consider it to be “good” power) from international to local is going to be a long, and inevitably slow process. But there is already a growing set of institutions to learn from in the global South—including community foundations, community philanthropy organizations, women’s funds and other types of local grassroots grantmakers. These include the Kenya Community Development FoundationInstituto Rio in Brazil, India’s Foundation for Social Transformation and the Waqfeyat al Maadi Community Foundation in Egypt.

This new generation of organizations constitutes an essential, but often missing piece, not just of civil society architecture but also of healthy, inclusive communities. They put together local and external cash under a single institutional roof, in order to give small grants to local groups through open calls for submissions, acting as a counter (or complement) to local level government institutions.

The way such organizations are governed is crucial to their wider impact. They seek to be reflective of their communities in the composition of their boards, pitching their institutional tent as broadly as possible to maximize both ownership and potential for resource mobilization. In this way, they can bring the diversity of communities’ interests together “in-house” and draw in and on different perspectives. Participatory grant-making, where communities themselves are involved in decisions around resource allocation, is another important feature of this field. It’s hard and labour-intensive work, particularly when communities have never been asked to make such choices before, but essential if power is really going to be shifted.

Over the past ten years, my organization, the Global Fund for Community Foundations has sought to increase recognition and mutual support for this fledgling movement, building up a network of over 160 community philanthropy organizations in more than 60 countries: while each organization looks different, what unites them as a group is a core belief that development will be stronger and more lasting when local people see themselves as co-investors and participants. And yes, it turns out that when a funding base is made up of lots of different contributions from local sources, it is often able to address sensitive issues that might get organizations that are entirely dependent on external funding into serious hot water.

Community foundations in Central and Eastern Europe, for example, have started to engage around issues affecting the Roma and, even more recently, around refugees from Syria. That wouldn’t be possible without the trust and reputation they had accumulated by working across a range of other local issues for many years. In other parts of the world, our partners are tackling other hot potatoes such as migrant labour, the environment and peace-building.

For donors, this is not about a call to back off, but rather to think and fund differently, to realize both the power and the limitations of their support and to engage in some serious reflection as to the kind of long-term footprint that they want to leave behind them. In short:

Local, people-centred institutions matter. International development needs local NGOs but when they are shaped too much by external funding they might not be the kinds of organizations that local people actually want. Local civil society organisations can play an important role in negotiating with other institutional players (state, corporate etc.) but their ability to do so also depends on some degree of legitimacy and local buy-in – and perhaps not looking just like mirror images of their funders.
Communities have assets but too often they are overlooked in the development equation. And local giving equates to social capital and trust, something that is almost impossible to build from the outside.

Finally, building local philanthropy is a slow, painstaking process: external donors can play a critical role in providing matching and core funding. And they also have much to gain by working with local partners who can target grants and other supports deep into communities that are normally beyond the reach of external donors.
This is a difficult, soul-searching time for civil society and donors alike. Community philanthropy cannot provide all the answers. But the field offers some important insights into how to build a more democratic, respectful and resilient (both politically and financially) foundation for the exercise of active citizenship.


Jenny Hodgson

Executive Director, Global Fund for Community Foundations