Image of a small town.
Where one lives deeply affects where one gives.
When a funder decides to focus all or a part of their giving where they are based or have longstanding ties, that giving can be described as “place-based philanthropy.” While there are exceptions (think of funders that give internationally), there are many reasons why and how funders give in their communities.
For example, many seek to give to the community they’re “living, working, and playing” in. They wish to see outcomes and impact in their neighborhood. They may have longstanding family connections or ties to a place. If they are a “smaller” funder, they may believe that their limited resources will go further if focused at home. They can develop deeper relationships, better understand local needs, and effectively tailor their funding to address longstanding or emerging needs.
The Milken Institute points out that place-based giving allows funders to leverage their financial capital, social networks, and other expertise in addition to seeing an impact locally. Suppose a funder knows an area well and can coordinate with other funders. In that case, they can better break down the complexities and tackle an issue's root cause(s), identify a comprehensive and cross-sector approach, and generate lasting, transformative change within the chosen community. In other words, a funder can become more of a community leader (if they desire) if they’re locally rooted and transparent about their giving. As FSG shares, “cross-sectoral and community leadership are needed to advance long-term, sustainable change.”
Place-based giving can also matter significantly to the communities where the giving is focused. Consider the Lilly Endowment in Indianapolis, Indiana. While some of its giving goes toward organizations outside Indiana, much of it has stayed in the state and city. The Endowment gave money to establish community foundations and affiliate funds in many of Indiana’s counties, which has led to initiatives and grants focused locally in every community across the state.
But the Lilly Endowment is a large example and not particularly representative of the vast majority of the smaller private foundations that are place-based (according to the IRS in 2023, 61.7% of funders had assets under $1 million, and a further 29.2% had assets between $1 and $10 million).
With that in mind, consider two foundations that harp-weaver manages. One, a family foundation, focuses its giving primarily on Philadelphia and supports pilot or developmental stage projects. These projects, conceived by nonprofits to address a new or growing need, often do not receive support to kickstart them. However, this funder supports these early-stage ideas that address a significant need in Philadelphia. Successful programs, such as Pathways to Housing’s Good Haul, often become integrated into a nonprofit’s daily operations, thus benefitting the community through their activities. Good Haul offers employment for those seeking stability, and all revenue generated supports the Philadelphia Furniture Bank. Furniture picked up by Good Haul in good condition is also diverted to the Furniture Bank. The funder’s knowledge about housing, specifically in Philadelphia demonstrates how place-based giving can truly have an outsized impact.
The other example is The Presser Foundation. An independent foundation focused on supporting music, more than 2/3 of the Foundation’s giving stays in Greater Philadelphia. With that deep connection to place, the Foundation has formed meaningful relationships and understands the arts and culture environment. That understanding and community embeddedness have helped the Foundation become a resource and partner to its grantees.
Funders can catalyze impact in numerous ways. Some seek to do so by supporting multiple geographic areas and sending funding abroad, while place-based funders look to do so in their communities. While there is no “right way” or “right place” to fund, place-based giving offers a powerful way for funders to connect and catalyze impact in their backyards.
コメント