Celebrating 30 Years: Issue 11

History of Community Foundations

History of Community Foundations in the USA

The first community foundation was started in Cleveland, Ohio, in 1914 by Frederick Goff, president of the Cleveland Trust Company.  Following the establishment of the Cleveland Foundation, other trustee companies began to promote community foundations. The growth of community foundations in the US was geographically uneven; they flourished in the Midwest and North East, which had a thriving nonprofit sector, and in cities, but did not do as well on the East Coast.

Interest in community foundations slowed during the Great Depression, but was revived in the 1950s, particularly with the new demands on Community Chests.  Asset growth of community foundations was slow in the 1960s, but growth revived somewhat with the implementation of the 1969 Tax Reform Act,  which gave greater tax advantages to ‘public’ foundations such as community foundations, than to private foundations. Community foundation assets grew by 30% between 1970 and 1972, and another 10% in 1973. Much of this growth came in the form of gifts from private foundations, or from the assets of dissolving private foundations which transferred their assets to community foundations.

In the 1970s and 1980s, large private foundations such as the Ford Foundation and the C.S. Mott Foundation began to champion and support community foundations as a means of responding to local community needs and serving as catalysts and resources within communities.

Community foundation growth picked up speed again in the 1990s, as community foundations began actively promoting donor advised funds, which attracted some money which may otherwise have gone into private foundations.

Community Foundations in the US Today

     
  • In 2000, there were estimated to be 664 community foundations in the US, a 150% increase since 1990.
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  • In 2000, the top 20% of community foundations controlled more than 88% of the sector’s assets; the top 5% of community foundations held 60% of assets.
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  • The bottom 60% of community foundations in the US hold 3.5% of assets
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  • This disparity in assets is significantly related to geographical disparities in wealth, with California receiving over 25%  of total gifts to community foundations.
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  • ALmost half of all community foundations in the US are located in the Midwest.

Community Foundation Growth in Australia

Early Years

Australian growth of community foundations has been slower than that in the US, due to a number of cultural and legal factors including:

     
  • different cultural attitudes towards wealth
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  • lack of regulation requiring Australia trusts and foundations to report publicly
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  • lack of clear and available information about foundation formation
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  • the dominance of trustee companies in the establishment of foundations

Australia did have similar organisations, such as the Greater Melbourne Foundation of the Lord Mayor’s Charitable Fund, operating before the establishment of community foundations. The first “US style”  community foundations in Australia were started by the ANZ Bank in the 1980s following a visit by an ANZ staff member to the US. The first Australian community foundation was the Victorian Community Foundation,  established in 1983, followed by the Queensland Community Foundation in 1986. However, following a restructure at the Bank, and various internal policy decisions, both foundations were “recreated”; the Melbourne Community Foundation was created as an independent entity in 1987 and in Queensland the Public Trustee Office was given both the Board of Advice and the name for the Queensland Community Foundation.

Since 2000

By 2000 there were still only five community foundations in Australia, two of which were inactive; by 2003, however, there were over 20 community foundations in various stages of development.

This “growth spurt” came about largely because establishment of the Foundation for Rural and Regional Renewal (FRRR), and its championing of community foundation development in conjunction with Philanthropy Australia, the Sidney Myer Fund, and various other supporters.

Philanthropy Australia, while it had been in existence since 1977, took some time to establish itself and until the late 1990s concentrated largely on serving existing members. In 1999, increased resources and interest on the part of board members and staff led Philanthropy Australia to develop a plan to support the development of community foundations, particularly as a means of encouraging community renewal in regional Australia.

In 1999 The Sidney Myer Fund was celebrating the centenary of Sidney Myer’s arrival in Australia, and the Fund’s Trustees marked the centenary by making a number of major grants. As the Myer family had strong links with regional Australia and the Fund’s trustees and staff had an interest in regional development, it was agreed that the Sidney Myer Fund should contribute $1 million to the creation of a foundation which would support rural and regional Australia. During the planning phase, the concept of community foundations emerged as possible vehicles for rural regeneration.

The Sidney Myer Fund decided to use its $1 million as leverage for further funds and concessions from the Commonwealth Government. The Government, and particularly the Deputy Prime Minister, were enthusiastic about the concept and a series of meetings were held in Canberra, culminating in an agreement that the Commonwealth Government (through the Department for Transport and Regional Services) would match the Sidney Myer Fund’s $1 million with $10 million, plus $750,000 towards start-up and a $3.75 million challenge grant. This led to the establishment of the Foundation for Rural and Regional Renewal (FRRR).

FRRR was launched at the Regional Australia Summit in October 1999; its role is to promote for the public benefit rural and regional renewal, regeneration and development in Australia in social, economic,  environmental, and cultural areas.  One of the ways it has carried out this mission has been to make grants for feasibility studies to communities interested in starting a community foundation; following positive findings, FRRR considers applications for seed funding to enable fledgling community foundations to establish themselves. As of 2003, FRRR had provided seed funding for 11 community foundations.

Australian Community Foundations Today

A list of current Australian Community Foundations, with links to their websites where applicable and information on their legal status,  is available from Philanthropy Australia’s Community Foundations Gateway.

There are currently:

     
  • 26 established community foundations with Public Fund and DGR status
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  • 2 incorporated community foundations
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  • 1 in the process of incorporating
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  • and at least 10 more communities in the process of conducting feasibility studies.


Support for Australian Community Foundations

     
  • Philanthropy Australia has a part-time Community Foundations Officer.
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  • Philanthropy Australia and FRRR have jointly developed a Community Foundations Kit for Australian communities wishing to establish community foundations.
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  • A Community Foundations Forum is held on an annual basis.
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  • Community Foundation Sample Documents are also available for download.
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  • A very successful forum was held for community foundations in Albury NSW in August 2007. The event was attended by Directors and Executive Officers from around the country. There was much valuable information presented and exchanged. A particular highlight was the launch of the Border Trust’s Community Leaders network.
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Sources

Coming soon.

Go to Celebrating 30 Years: Home

Oct. 16, 2007

 Tags: general, 30 year celebration

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