Technology, Philanthropy, and a Solid ROI with Community Foundations

Submitted by Kelly Eisenhardt

Getting a solid return on investment and helping communities grow through grant making and innovation is all possible with community foundations.

Annie Rhodes serves as the Director, Foundation Strategy in the MicroEdge division of Blackbaud. In this role, Annie helps philanthropic organizations leverage technology to optimize how they manage their giving and improve collaboration with funding partners and grant recipients. As part of this, Annie led the development of Blackbaud Outcomes™, a technology solution that helps funders and nonprofits track and measure the results of their giving programs. Prior to this role, Ms. Rhodes worked at the Ford Foundation where she managed grants in the Human Rights unit, including working with the Women’s Rights and International Human Rights portfolios.

What is the definition of a community foundation and what is MicroEdge + Blackbaud’s mission as it relates to community foundations?

Community foundations represent a specific location and receive funding from donors who want to pool funds to support their local community. The foundations are set up in a specific region, city, or town and are considered a central repository for information about the local community being served. The repository enables donors to hold their funds for intended allocations.

This ties very well with our mission to help get the funds into the hands of the community, to build supporting technology, and to help communities grow and flourish by getting the funds they need.

Are there resources available to help community foundations with obtaining grants and generating funds? 

The community foundation often plays the role of bringing together all the nonprofits in a region and identifies trends in a town or city, in addition to being a place for other community foundations to collaborate. They can also provide information about what is happening at a broader level in the nonprofit world. Across the United States there are nearly 800 community foundations and globally, that number is closer to 1800. Community foundations have existed for over 100 years and have gained popularity in the last 20-30 years. They are often the pulse and glue that holds a community together by understanding its needs and finding donors to help. 

When I joined MicroEdge six years ago, my experience was primarily in the area of private foundations. I quickly learned how community foundations focus on specific regions, cities, and towns. In doing so, I discovered that there is a community foundation focused on the county in New York where I grew up. Community foundations were closer to me than I thought. 

A resource we use quite often is The Foundation Center. They have great tools on their website and a wealth of knowledge to help advance philanthropy around the world.

What role does technology play in a foundation’s success? 

Technology enables community foundations to attract different types of donors and to share results with the world. It enables donors to track their dollars and grants. It connects nonprofits so that they may share their work and it empowers foundations to share their stories with communities and donors.

Many community foundations are leveraging the power of mobile technology. It assists them in staying connected to their work while out in the field. It also supports them in staying connected to the community. Donors can also view their contributions and get advice on specific causes in which to direct their funding all via mobile.

Technology provides the ability to shift dollars away from solely being viewed as charity to viewing donations as investments. Similar to how a retirement portfolio would be viewed, donations are aligned with performance, preferences, and results. Corporations, private foundations, community foundations, and individual donors can track donations as an investment that captures a solid Return on Investment (ROI), as far as their social impact.

Understanding the importance of aligning donations with ROI prompted us to release a tool this year that provides insight into giving. We do much of this work through our tool Blackbaud Outcomes.

This tool enables donors to review the risk profile of a donation opportunity, get status on goals and specific outcomes, and understand how performance is measured. This enables foundations to have a conversation much earlier in the grant cycle based on data and makes impact analysis a part of the review. It simplifies collaboration, and uses a sector-sourced outcomes taxonomy to get everyone speaking the same language and on the same page.

What is the Top 100 Community Foundations Assets List and how has your organization engaged with the foundations on the list?

The Foundation Center publishes a “Top 100 List of Community Foundations by Asset list” every year and of that list, 89 of the top 100 community foundations use our technology to manage their donor advised funds and fund accounting, such as the Rhode Island Foundation and the Austin Community Foundation.

By tracking the list, we are able to align with the trends on a year to year basis and determine what might need to be improved or highlighted based on the previous year. We’ve been able to determine that community foundations are growing significantly compared to other foundations. More and more local donors want to support and serve their communities and they are coming forward.

Following the list has helped us understand the market. The list highlighted a few key trends community foundations were experiencing.  It expressed the need for more marketing and communications, along with providing the capability for foundations to share their stories. This in turn demonstrated a need for us to help raise the profile of community foundations.

Can you highlight one of the foundations on the list and how they leverage best practices?

The Silicon Valley Community Foundation (SVCF)  is ranked the largest foundation in the United States. They’ve created a model that has enabled them to grow at a significant pace, along with becoming the largest grant maker in the U.S. In the last two years, they’ve replicated this model in a way that benefits areas outside of their community as well.

Part of their success is based on the ability to use key performance metrics and results to attract future funders. They’ve also embraced marketing and communication to create a message of innovation and technology.

SVCF educates the whole philanthropic community on how to iterate innovative grant making possibilities and new funding models based on iterations and improvements. In addition, they continue transforming their internal programs to determine the best and most efficient methods for running the foundation. 

What role does MicroEdge + Blackbaud perform?

We provide technology to community foundations to help reduce administrative burden of managing multiple funds, help foundations connect with donors, nonprofits, board members and other stakeholders and make the grant application process easier.

In addition to supporting community foundations, we also support the broader philanthropic space, or the “ecosystem of good” as we like to call it. Corporations and private foundations are also part of our (Blackbaud’s MicroEdge division) customer base. Blackbaud is the largest technology provider in the social good sector.

But technology is only one aspect of what we do, we also have focus groups and user meetings to discuss best practices. We hold a tech conference for the markets we serve. We work in partnership with communities, nonprofits, and private foundations, and 80%+ of our staff serve on some type of philanthropic board or volunteer with nonprofits in their spare time. We are heavily involved in educating the community and markets we serve. 

What two things would you recommend to community foundations looking for help and how can they learn more about your work?

One of the first steps we recommend is for organizations to evaluate their technology needs and understand how technology can play a role in reducing administrative burdens, gaining efficiencies, and streamlining processing times. It’s important for foundations to think about how technology can help them reach new markets and potential donors.

Next, leverage the data and reports that can be found at The Foundation Center. Review the Top 100 list and the interactive insights available. Review data submitted by other community foundations and if yours hasn’t submitted their data, do so. The Foundation Center provides great support for nonprofits looking for grants. It’s a free resource and available at public libraries.

Lastly, learn from other community foundations. Engage. Talk. Share best practices. Talk about what is working and what doesn’t work. Stay connected to other organizations and find out how to be of service.