A new way of thinking

A new way of thinking about charity and philanthropy

Eleanor Cater
CFNZ
10 February 2022

The charity sector is changing and communities are looking for smarter ways to manage community funds. Generous locals are looking for an easy way to leave a personal local legacy. Having an all-encompassing, well-governed structure for communities, simply makes a lot of sense.

Worldwide, we are seeing an increase in the popularity of endowment funds, such as those managed by the umbrella structure of the local Community Foundation (see how it works here). While the idea of an endowment fund is a relatively new donor concept in New Zealand, interest in this form of giving is growing, as we have seen through our network, which has seen the rapid recent growth in endowment funds of 33% in the past financial year alone.

Community Foundations are recognised as being more cost-effective and versatile and they are certainly less administratively burdensome than creating a new charity or foundation. They take care of all compliance and administration, they oversee investments, and provide sound governance. Generous donors can be as involved as they want to be, with many enjoying focusing on the joys of giving and the benefits their gift will bring, rather than the (often unwanted) details of governance and administration.

Another significant value-add is that Community Foundations are close to their communities and know who is doing great work. They can advise generous locals how where to invest their donations to the best effect and, as a result, Community Foundations are in a unique position to facilitate effective giving locally. They can play a key role in identifying and solving the problems of a community, and provide insight into emerging charitable investment opportunities. This creates confidence in the local charity sector that funds are being used effectively, and that local efforts are streamlined and collaborative.

The growth of Community Foundations also sees more donors able to access what we might call 'strategic philanthropy', which is what I admire about the Community Foundation model most: they enable everyone, even those perhaps of more modest means, to be a philanthropist and affect change where their heart and soul resides. Time and again we have generous kiwis tell us that they didn't know they could set something up that was so easy, so effective and so fulfilling. Working with generous kiwis and helping them to realise their community aspirations, is a joy each and every day.

Recently, we have been delighted to team up with the Dentons Kensington Swan team, to co-write this joint White Paper: Community Foundations - a new way of thinking about charity, philanthropy and working with clients.

"Just as many of the great challenges of our time are too big to be tackled in isolation, so too can philanthropic efforts be collectivised for the common goods of our communities. There are significant benefits to be gained from the charitable sector moving steadily towards a more collaborative model, like that offered by local Community Foundations."

You can read the White Paper here - and consider the possibilities!