Does Charity Still Start at Home? Exploring the State of Place-Based Giving
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Last month, a group of Silicon Valley grantmakers rolled out an initiative to catalyze $100 million in new giving to local nonprofits. The effort, called Magnify Community, emerged after years of angst that the region’s vast wealth creation wasn’t translating into a flood of new support for community organizations. The CEO of the new venture, Catherine Crystal Foster, noted, “Silicon Valley is home to more than 86,000 millionaires and billionaires—and many are incredibly generous—but not nearly enough of Silicon Valley giving is invested in local community-serving nonprofits.” Magnify hopes to change that: “We believe if you live here and found success here, you should give here,” Foster said.
The question of why Bay Area tech winners aren’t giving enough locally has gotten a lot of attention in recent years. One of the funders behind Magnify Community, the Packard Foundation, even commissioned a study on the mystery, the “Giving Code,” that was released in 2016 and documented a deep disconnect between local wealth creators and nonprofits. The Silicon Valley Community Foundation has often been held up as Exhibit A of that disconnect: In contrast to nearly all other community foundations, SVCF sends a huge amount of grant money outside its home region—a pattern that reflects the national and global interests of its donors. The disrupters of Silicon Valley, many have argued, simply don’t share the age-old philanthropic impulse to improve the place where they live.
This problem is in no way limited to the Bay Area. Many of the biggest donors who’ve emerged from Wall Street—like George Soros, Michael Bloomberg and Jim Simons—have focused their giving on national and global issues, even as a fifth of New York City residents live in poverty. (See our recent coverage, for example, about all the Wall Street money flowing to environmental organizations.) While the New York metro area is reportedly home to more than 105 billionaires, up from 65 in 2008, you wouldn’t know that by looking at certain data points. For example, Gotham’s top community foundation, the New York Community Trust, made grants totaling $162 million in 2018—which was less than the $166 million it gave out in 2007.
Not as Bad As It Looks—or Worse?
While it’s easy to spin a narrative about tepid local giving in many wealthy metro areas, there’s also evidence pointing in the opposite direction. In the Bay Area, recent years have actually seen a steady stream of big gifts and commitments for local causes from Mark Zuckerberg, Marc Benioff and non-tech billionaires like Stephen J. Bechtel. Some of these givers, like Benioff, work in close concert with the Tipping Point Community, a philanthropic intermediary that’s raised $260 million for Bay Area nonprofits since its founding in 2005. Many others work through the Silicon Valley Community Foundation—which, contrary to reports, does do a lot of local grantmaking. In 2018 alone, the foundation made grants worth several hundred million dollars to nonprofits in its home region.
Likewise, New York has been the scene of a long list of big local gifts and initiatives in recent years—including Barry Diller’s massive donation to build a new park on the Hudson River, Chuck Feeney’s $350 million gift for a Cornell tech campus on Roosevelt Island, and nine-figure gifts for Lincoln Center, the New York Public Library, the Central Park Conservancy, and other marquee institutions. Meanwhile, the Robin Hood Foundation—which raises much of its money from Wall Streeters (and was the model for Tipping Point Community)—now channels over $150 million annually to nonprofits fighting poverty across the five boroughs.
Other cities have also seen plenty of local philanthropic action, like the hundreds of millions of dollars that hedge funder Kenneth Griffin has given in Chicago; the $400 million investment by George Kaiser to build a new riverfront park in Tulsa; the huge donations by Richard and Nancy Kinder for education, urban green space, and quality of life initiatives in Houston; the prolific philanthropy of Eli and Edythe Broad focused on Los Angeles; and much more.
The nonstop stream of large-scale local giving by billionaire donors marks the rise in many cities of a new class of “super-citizen” mega-donors intent on improving, or even transforming, the places in which they live.
More broadly, there are plenty of indicators that place-based giving remains a central pillar of U.S. philanthropy, with thousands of foundations nationwide taking a local focus—including some 750 community foundations with collective assets of around $100 billion, and in a newer development, more than 200 health conversion foundations, most of which restrict grantmaking by geography, and many of which have been created since 2010.
In some regions, like the Southeast and Southwest, local giving scenes have expanded rapidly in the past two decades. A good example of this surge can be seen in the Foundation for the Carolinas, which has transformed itself from a tiny, hyper-local funder to a powerhouse on the community foundation scene. At the end of 2018, it had $2.4 billion in assets and made $315 million in grants that year. Another indicator of exploding regional philanthropy is how much money heartland universities have been raising, with schools like Arizona State University and Iowa University mounting record-breaking campaigns that pull in lots of gifts from alumni who’ve made their fortunes locally.
And yet.
Despite all the evidence that place-based giving is alive and well, it seems equally clear that this pillar of American philanthropy is not as strong as it should be, given the explosion of wealth in many regions, especially in tech and finance hotspots. Within philanthropy, much of the action and excitement has been around grand national and global challenges—reforming education, battling climate change and raising millions from poverty in distant lands. Most top donors do give quite a lot of money locally, but such grantmaking can seem almost a side project. Consider the Gates Foundation and the Walton Family Foundation. While both these grantmakers channel tens of millions of dollars to local nonprofits, they reserve most of their funding and attention for larger issues.
Meanwhile, there’s growing evidence that today’s donors—especially younger givers—just aren’t as interested in place-based giving as previous waves of philanthropists. For example, the National Center for Family Philanthropy (NCFP)’s “Trends 2020” report found that over 80 percent of older and larger family foundations focus their giving geographically, while a similar percentage of newer family foundations (those formed in the last decade) is focused on issues-based giving. NCFP’s data seems to suggest that place-based giving is becoming less important in the philosophy of emerging donors who pilot family foundations.
What’s really going on here? Are we, in fact, witnessing a seismic shift away from traditional patterns of philanthropy in which place is centrally important to a higher-altitude approach to giving that reflects growing alarm about global challenges, along with intensifying national political conflict? Or is something more complex happening that defies a neat binary analysis?
We put those questions to funders and experts around the country.
The Place-to-Issues Pivot
Adam Guren is a third-generation member of the Hershey Foundation, a family foundation based in Northeast Ohio with a place-based mandate to help children and young people in the region. Yet over the last three years, Hershey has noticeably transitioned from place-based to issues-based giving.
This is evidenced by the foundation’s work with Montessori Development Partnerships, a collection of mostly charter schools spread out across the country. Hershey is partnering with Montessori to establish an Educational Impact Fund, which will provide loans and grants to Montessori schools and its teachers-in-training. Hershey has worked with Montessori in the past on local programming for its Northeast Ohio schools, but Guren and other foundation leaders wanted to scale their efforts more broadly. Last year, they began discussing a national—and potentially even global—rollout of the model they introduced locally, and the Educational Impact Fund was born.
According to Guren, the Montessori Educational Impact Fund—which will launch next month—is a direct outcome of the conversations his family foundation had on how to transition from geography-based to issues-based funding. “The problems plaguing Northeast Ohio and Cleveland are not unique to Cleveland,” Guren explained. “Those problems are plaguing the global community.”
Karen A. Simmons, president and CEO of the Chester County Community Foundation, a 25-year-old Pennsylvania foundation that houses over 400 DAFs and individual and family funds, has experienced firsthand the emergence of issues-based giving over the past five years. “We have noticed some younger next-gen donors being more interested in issues-based giving,” said Simmons. She chalks this up to the larger worldview that millennials possess, thanks mainly to the prevalence of global networks facilitated by social media and the internet. That observation tracks with a recent white paper on family philanthropy by Northern Trust Wealth Management, which found that millennials and Gen Z heirs are more globally minded and less localized in their thinking compared to their parents and grandparents—a trend that can create tensions within family foundations about priorities.
Yet Simmons was quick to point out that the donors she works with haven’t forgotten where they live, by any means. “People in the community want to know what’s going on outside of the region, but are still focused on the local nonprofits they care about,” she said. As a result, her foundation has begun framing national and global issues like homelessness and the environment around how they impact the local neighborhood. “Donors do tend to give more,” Simmons said, “when we speak about larger issues.”
Think Globally, Act Locally
Jennifer Touchet, vice president of personal and family philanthropy at the Greater Houston Community Foundation, echoed this sentiment—saying that she doesn’t see an either/or mindset among donors. Her foundation serves one of the five largest cities in America. With over 2,000 funds, roughly 60 percent of the dollars from the foundation stay in Texas. “I don’t think individual donors see this as ‘I’m giving issues-based or place-based,’” she explained. “For large donors who are looking at a portfolio of grantmaking, just like any other balanced portfolio, they’re looking at all of that.” In other words, while donors are increasingly looking at issues more broadly, much of their giving is still being done through a place-based lens.
Touchet noted a growing array of efforts that address national or global challenges within a local context. For example, a group of Houston funders who are launching an anti-human trafficking initiative in greater Houston have spent a lot of upfront time and resources learning from national and international groups. Inside Philanthropy reports often about similar connections made in other areas, like climate change, as local activists and funders alike link up to larger networks—taking to heart the old adage, “think globally, act locally.”
Data projects are another way that community-focused funders are situating local change efforts in a broader context. Touchet pointed to a new partnership between the Greater Houston Community Foundation and the Rice Kinder Institute for Urban Research that will aggregate 200 data points across eight key community issues (things like housing, healthcare, the environment and economic opportunity). This initiative, Understanding Houston, will look at how those issues impact the Houston community, while comparing the local data to state and national figures. Touchet believes that Understanding Houston will engage next-gen participation in place-based giving.
Houston is a major urban center, and there’s often a significant amount of interest in local community in such places. For foundations based in rural counties, keeping grant dollars local can take a bit more proactivity and some outside-the-box thinking.
The T.L.L. Temple Foundation serves 24 counties; 23 of them rural. Wynn Rosser, the foundation’s president and CEO, has made a strong effort to connect next-gen Temple family members—many of whom are dispersed across the country and the world—with their roots back home. “It all comes down to trustee leadership and trustee commitment to place first,” Rosser said. In addition to convening networks, researching and grantmaking, Rosser views his foundation’s role as one of advocacy for the rural communities it serves. “We see our role in terms of helping people understand issues in a rural context. Rural people have been left behind and continue to be left behind.”
To that end, Rosser invited Temple family members into the community for four days of learning, where they met with local community leaders to discuss priorities and major local issues. Rosser recounted state, regional and national data, comparing figures to those of his local community, and set about constructing a list of priorities and goals for the foundation. Based on those conversations, Rosser and his team identified several issues that can be viewed as both place and issues-based, such as access to healthcare, affordable housing for residents and access to broadband (which many rural and urban residents lack). This framing helps T.L.L. Temple place the spotlight on important issues that next-gen donors care about, while ensuring their grant dollars stay local to the foundation’s 24 counties.
As Rosser put it, “these are issues that transcend place.”
Charity Still Begins at Home
Smaller foundations are especially likely to believe that working locally is the best way to have impact. Henry Berman, CEO of Exponent Philanthropy—which supports more than 2,000 funders, most of whom have limited staff—said that 85 percent of its members give grants to support their local geographic area. A recent survey by the group found that more than half (51 percent) of its members cite the local economy as a top driver for change rather than the national or global economic picture.
“It’s not a binary,” said Berman. “People can be committed to a cause and to their local community, and there’s a real intersection there. You can be a foundation that focuses heavily on early childhood education, and you only do it within a single place—whether that be the Bronx, or the suburbs of Kansas City.”
Education is just one of many issues that mostly play out at a local level. In fact, even as national policy debates grow more heated and more philanthropic dollars flow to nonprofits that fight these battles in Washington, D.C., communities across the country remain on the front line of addressing many of the nation’s most urgent challenges. And, so far, there are no signs that donors are losing interest in these arenas of change. Instead, we are seeing the transformation of localized giving into something more place-and-issues-based. Just because donors are looking beyond their local boundaries, doesn’t mean they’re overlooking their roots.
As NCFP’s new president and CEO, Nick Tedesco, put it: “Philanthropy is historically rooted in community. However, the idea of community has expanded over time.”
