Why Community Foundations Make Perfect Partners for Children's Savings Account Programs
Did you know that there are over 800 community foundations across the United States, and that these institutions—through their own grantmaking—distribute at least $4.3 billion annually to support a variety of nonprofit activities? This is important information for the growing children’s savings account (CSA) field, which looks to foundations for the most funding support (both larger charitable foundations and community foundations). According to Prosperity Now’s State of the Children’s Savings Field survey, 69 percent of CSA programs receive support from philanthropic sources.
And yet community foundations are so much more than grantmakers. Community foundations are civic institutions that bring together resources and relationships to address their communities’ most pressing problems. They connect with residents, collect and share community data and partner with government and other sectors to bring about positive change.
For the past nine months, Prosperity Now has worked with CFLeads—a national network of community foundations working together to build strong communities—and a cohort of six community foundation partners as part of the Asset Development Action Alliance (ADAA), an initiative to explore how community foundations can advance the adoption, expansion and strengthening of CSA programs.
Drawing on the experience of ADAA, CFLeads and Prosperity Now have released an issue brief that identifies why community foundations are particularly well-suited to support CSA programs:
- Community foundations are collectors and aggregators of resources. They are adept at leveraging myriad local funders and engaging those funders in their work. What’s more, with responsibility for working with multiple donors, community foundations are proficient at holding and managing funds, a capacity that may prove particularly useful to CSA programs.
- Community foundations have a broad “community betterment” mission. All community foundations are committed to addressing important community needs. Many community foundations have adopted a specific focus on improving household economic security, which could encompass work on CSAs.
- Community foundations are permanent. By virtue of their fiduciary responsibility to manage philanthropic capital for the long-term good of the community, community foundations are permanent institutions. As partners, community foundations can be counted on—in whatever role they may take on—to be there when today’s young savers become teenagers and adults.
For CSA programs interested in closer collaboration with local community foundations, here are some key lessons:
- Community foundations are motivated to become engaged in CSAs for a variety of reasons. For CSA programs seeking to partner with a local community foundation, it’s unnecessary to attempt to do everything with the CSA program itself—just focus on at least one key objective that matters to your community foundation.
- Community foundation engagement in CSA initiatives is not limited by a community foundation’s asset size. No matter their size, community foundations can play an important role in launching and sustaining CSA programs, if CSAs fit their core mission.
- There is no one-size-fits-all model for how community foundations can support CSA programs. Community foundations can succeed in a range of roles to support CSA programs, including serving as conveners, influencers, policy champions, funders and service providers.
- Community foundations can be a key source of innovation in CSA programs. In emerging areas of innovation—such as exploring the use of education scholarship dollars to fund “early commitments” in CSAs based on accountholder achievements—community foundations are driving CSA programs forward.