Going Beyond the Dollar: The Community Leadership Role of Foundations

Foundations play a crucial role in supporting nonprofit organizations and driving positive change within communities. Traditionally, their primary function has been to provide financial assistance to grantees. However, in recent years, there has been a growing recognition that foundations possess the potential to offer more than just monetary resources.

By embracing a community leadership role, foundations can amplify their impact and empower grantees to achieve long-term, sustainable success. In this blog post, we will explore the concept of community leadership in foundations and discuss how they can support their grantees beyond the dollar.

Understanding Community Leadership

Community leadership involves actively engaging with local stakeholders, identifying shared goals, and working collaboratively towards achieving them. It requires foundations to step beyond the role of a mere funder and become catalysts for change within their communities. Historically, community leadership has been more of a concept versus an action. Leadership is both a process/action and a result, but we often only hear about the results of good leadership.

I define community leadership as “any person or organization who engages individuals or groups within a particular community to collectively establish goals, guides them toward the achievement of those goals, thereby achieving a civic outcome.” Community leadership, based on my research and consulting with foundations, combines the defined concepts of collective leadership, civic leadership, and community engagement into a comprehensive approach that seeks to work alongside communities—geographic, identity-based, or faith-based—to create a positive change.

Collective leadership is a collaborative approach that embraces shared decision-making, participation, and the collective wisdom of diverse perspectives. It recognizes that leadership can emerge from anyone within a group and emphasizes collaboration, trust, and inclusivity. Civic leadership, on the other hand, involves active engagement and participation of individuals in addressing community issues and promoting the common good. It encompasses activities such as community organizing, advocacy, and public service, empowering individuals to contribute to their communities. Community engagement, a vital component of both collective and civic leadership, involves community members in decision-making and development initiatives, ensuring their voices are heard and respected, and fostering collaboration and collective action within communities.

download resourceFree Resource

Tips for Stewarding Responsively

3 Ways to Redefine Risk and Build Stronger Relationships with Your Grantees

Download Now

Supporting Grantees Beyond the Dollar

Foundations have the potential to offer invaluable support to grantees that extends beyond financial assistance. These non-cash opportunities can sometimes be more impactful than a grant itself.

For example, while many nonprofit organizations prioritize program development and delivery, they often overlook the importance of investing in their internal infrastructure, including leadership, management, operations, fundraising, and marketing, because it is not directly tied to program costs. However, weak infrastructure and inadequate internal operations can hinder the success of a nonprofit. In this regard, funders have a unique opportunity to contribute to nonprofit excellence by providing mentorship, sponsorship, and professional development opportunities, thereby helping to elevate the overall capacity and effectiveness of the nonprofit sector.

Here are a few ways foundations can build on their role as community leaders:

Capacity Building: Financial resources alone are often insufficient for grantees to achieve their missions. Foundations can play a pivotal role in enhancing the capacity of their grantees by providing technical assistance, training programs, and mentorship opportunities. By investing in the development of organizational skills, leadership capabilities, and strategic planning, foundations help grantees become more resilient and effective in their work. This can include bringing in a national speaker to train nonprofits, investing in leadership development programs, or providing technical assistance via a set number of consulting hours to support strategic planning and evaluation.

Networking and Collaboration: Foundations can serve as connectors, facilitating collaborations among their grantees and other community organizations. By fostering relationships, promoting knowledge exchange, and encouraging collective problem-solving, foundations help create a vibrant ecosystem where nonprofits can learn from one another, share resources, and amplify their impact. Some nonprofits may be unaware of other similar agencies, and funders have the opportunity to be a network weaver to help foster more strategic partnerships. This can be as simple as a monthly newsletter to your grantees and community leaders with resources, or as robust as hosting regular meet-and-greets to encourage collaboration.

Advocacy and Policy Support: Foundations possess a unique position of influence and can leverage their voice to advocate for systemic change. By engaging in policy discussions, supporting research and analysis, and partnering with advocacy organizations, foundations can address the root causes of social issues and create an environment conducive to the success of their grantees. Foundations can—and should—spend money on and grant funds toward advocacy initiatives that help to provide opportunities for communities. Many nonprofits are led to believe they cannot engage in advocacy or lobbying efforts, but both are permissible when given the right tools to do so.

Thought Leadership and Knowledge Sharing: Foundations can contribute to the field by investing in research and disseminating knowledge about effective practices and innovative approaches. By sharing insights, lessons learned, and best practices, foundations empower their grantees and the wider community with valuable information that can inform decision-making and drive positive change. When nonprofits have meaningful, local data to develop programs and services to address localized needs social issues can be addressed more intentionally and systematically.

Evaluation and Learning: Foundations can provide grantees with robust evaluation frameworks and support them in measuring their impact effectively. By offering feedback, guidance, and learning opportunities, foundations help grantees continuously improve their programs and increase their effectiveness. I have partnered with numerous foundations to offer evaluation cohorts to help nonprofits better understand their impact, especially since the impact for many foundations is directly tied to the impact of their grantees.

Fear of the Unknown

During my research and consultations with various foundations, particularly community foundations, I have encountered apprehensions regarding embracing a community leadership role. A prevailing concern is the fear of potentially alienating donors by taking a strong stance on social or community issues. However, in my experience, such fears are largely unfounded. In fact, in nearly all the foundations I have engaged with, the outcome has been overwhelmingly positive. While it is true that some donors may cease giving, this loss is often outweighed by the gains of acquiring new donors, enhancing the foundation’s community reputation, and being recognized as a partner actively advocating for community betterment.

The act of establishing a nonprofit itself is inherently radical, as it signifies a group of individuals coming together to address an identified problem within a community and effect positive change. Most community leadership initiatives align with the overall mission of foundations and are not inherently controversial. For instance, promoting high-quality early childhood education, advocating for affordable housing, nurturing a strong workforce, and fostering healthy communities all contribute to improving the overall quality of life—goals that many foundations explicitly express in their mission statements. Therefore, community leadership initiatives are in harmony with the foundations’ core purpose of pursuing community improvement.

Empowering Your Grantees Through Community Leadership

Foundations have the potential to be catalysts for transformative change by embracing a community leadership role. By going beyond the dollar and offering support that extends beyond financial resources, foundations can empower their grantees to achieve sustainable impact. Through capacity building, networking, advocacy, thought leadership, and evaluation, foundations can strengthen the nonprofit sector, promote collaboration, and address systemic challenges. By investing in community leadership, foundations pave the way for a more equitable and thriving society.

Ready to learn how to empower your grantees through community leadership? Join us for a webinar, Empowering Communities, Empowering Change: The Role of Grantmakers as Community Leaders, to learn how to build strong partnerships with community leaders and develop a plan for incorporating more community leadership into your grantmaking strategies.