Why Standards Matter

The community foundations in the U.S. are not only the oldest in the world, they are certainly the wealthiest and probably the most resilient. They have paved the way for a global movement which currently counts 1,858 community foundations in 71 countries worldwide (see Community Foundation Atlas). The U.S. community foundations are also setting an example by committing themselves to a refined set of National Standards to provide guidance and continuity for the field. The standards have served as a model for other countries like the UK and Germany. By now, 700 community foundations in the U.S. are accredited. The voluntary self-regulation process may be time-consuming for staff and board members, sometimes even annoying. However, national standards are not only an important means of ensuring accountability and good governance. The example of Germany shows how crucial they are for defining and protecting the community foundation brand.

Since the first German community foundations were established 20 years ago, their number has been growing more dynamically than in any other country in the world. As the term “community foundation” (Bürgerstiftung) is not legally protected in Germany, the Affinity Group Community Foundations within the Association of German Foundations developed the “10 Characteristics of a Community Foundation.” They define a community foundation as an “independent, autonomous, non-profit foundation of citizens for citizens,” as well as specify roles, responsibilities, internal governance, and accountability. By now, 400 community foundations that comply with the “10 Characteristics” have been launched nationwide. More than 30,000 donors and 15,000 volunteers have supported them, giving their money, time, and talent for their communities.

However, the success of community foundations has led to an enormous increase in imitations: More and more organizations call themselves “community foundations” without meeting the standards regarding independence and autonomy. In many cases, local authorities set up a foundation in which they exert influence on board elections and grantmaking decisions. The city council often sets up the foundation, which is then managed by the municipal administration. Its board is not elected, but formed by the mayor and one representative of each political party. In other cases, local savings banks use the term “Bürgerstiftung” for bank foundations which administer donor advised funds for their customers.

The standards defined by the “10 Characteristics” have become indispensable in drawing the line between community foundations and imitations in a legal system which does not differentiate between the two. They have helped to create a common framework which enables community foundations and their two support organizations to advocate for compliance with the standards. The “10 Characteristics” provide strong credentials and have established a brand that donors trust because it is associated with transparency and accountability.

If they meet the standards, community foundations are listed in Stiftung Aktive Bürgerschaft’s community foundation finder and can apply for the Seal of Approval of the German Association of Foundations. These two support organizations have also joined forces with community foundations to inform policymakers, local authorities, mayors, and banks about the standards and offer help in either transforming “copycats” into community foundations or changing their name.

National Standards matter. They help community foundations to define their unique value, distinguish themselves from others in the field, and protect their brand. Community foundations commit themselves to transparency, good governance, and financial stability. This is a good basis for winning the trust of donors, volunteers, and the general public – and gaining a competitive advantage towards organizations trying to be free riders.

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