Opinion and Economic Analysis and Foundations and Philanthropy

HICKS: State lucky to have community foundations

May 22, 2010

As a fairly new Hoosier, I continue to marvel at many things Indiana has going for it. Among these is the network of charitable community foundations.

Because the Community Foundation of Muncie-Delaware County celebrates its 25th anniversary this week, I thought it might be a good time to mention some of the good works of these foundations. The truth is, I could spend several columns just on the Muncie-Delaware County Community Foundation. Instead, I’ll try to give a general sense of what these foundations do and why they are important.

Indiana has more than 90 community foundations. That does not include similar organizations with more focused missions (like the Ball Brothers Foundation, also here in Muncie). The organizations are tied together with the Indiana Grantmakers Alliance, which acts as an information clearinghouse and advocacy group.

Last year, I had the pleasure of sitting through one of the meetings, which was a real eye-opener. The focus of the meeting wasn’t on obtaining more funding or lamenting the stock market collapse that stressed even the most solvent organizations. Rather, the two hours were spent better trying to understand how to boost local economies and improve the quality of life for residents. In the midst of the recession, it proved a strong tonic for an economist.

Community foundations tend to originate from two primary sources. Either civic-minded businesspeople band together to raise seed money, or another foundation such as Lilly or the Ball Brothers starts a challenge grant to craft a new fund. Both of these approaches raise an interesting question about local philanthropy. Namely, why wouldn’t these groups simply give the money themselves instead of creating another charity?

Community foundations typically focus on the type of community grants that bigger organizations cannot. By remaining close to the neighborhoods they serve, community foundations can do three things really well.

First, they well understand those whom they support. This means that folks who do good works—more so than those who write good grant applications—stand a better chance of being funded.

Second, they can fill the gap between publicly and privately provided services. A good community foundation (like the one in my hometown) knows when there is an unmet need. After faith-based organizations, nobody is closer to understanding immediate needs better than a strong community foundation.

Finally, a good community foundation is the best lifeguard a community has. This has been especially true over the last recession. Just like in business, good social service organizations face bad times. Unlike in business, the closing of a good charitable group isn’t always met by an eager entrepreneur ready to supply the unmet needs of the community. Here, a strong community foundation can step in, bridging funding for organizations that otherwise face a short-term financial struggle.

It is easy to take your community foundation for granted, but it’d be better if you sent a check.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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