A new model for charities

Background

The Christchurch Foundation is the community foundation for Christchurch City. It is part of a network of 17 community foundations, which combined, cover most regions in New Zealand. The foundations are usually independent not-for-profit organisations, set up to 'build long-term funding streams for local communities by investing and growing the gifts they receive.' ¹

The community foundation model has been successful across Europe and North America for over 100 years, but is relatively new to New Zealand, with the first one set up in 2003. The Christchurch Foundation has been a public entity for two years, making it one of the youngest foundations in the country.

Unlike most other community foundations in New Zealand, The Christchurch Foundation was set up by Christchurch City Council, initially to coordinate philanthropic activities related to the 2011 earthquake.

Same, not same

The Foundation is a charity. But, as Amy Carter explains, “the key difference between community foundations and other charitable entities is that we are focused on the donor, not on the cause. So we work with the donors to realise their dreams and aspirations in the donor space.”

It approaches philanthropy with a long-term lens to provide benefits to communities, charities and individual projects and is predominantly endowment based. “We take capital from the donors and invest with fund managers and distribute returns to the community. We’re now at close to $2m in managed endowments with a long term goal to get to $300m in managed assets. We’ve also distributed $10m into the local economy to the end of the 2020 financial year through direct ‘pass-through’ gifting. This is where the Foundation assigns individual or corporate donations to charities and projects through grants.”

The structure and purpose of community foundations is similar to community trusts but they differ in terms of their investment base, which, for foundations, continue to grow through the generosity of donors. “We enable local people to get involved with assessing community priorities for funding and where the grants will go.”

A simple solution for donors

Community foundations have quickly gained prominence with an increase in philanthropy globally, and a trend of donors who want to support their local communities – what Amy describes as ‘geo-located gifting’.  

“NZ is one of the most generous places in the world, especially when it comes to volunteering and gifting. But we’re not always strategic with our giving. A lot of our charity is ‘micro giving’, and it is well intentioned, but overseas more people have significant wealth and endowments and family foundations are more commonplace.

The ability to give in larger sums is now growing in prevalence in NZ, especially as the boomers start to transition from earning to philanthropy, so I think the Foundation model will grow in popularity with donors here.”

New Zealand has over 27,000 charities. “We do things in New Zealand because we have big hearts and we see a problem- and that’s great. What we don’t always do is check if there is someone else already in the space we want to set up in.

“There’s a lot of personal connection to charities, but we have a fairly small pool of money we can give to charities so there is increasingly competition for donors. We just aren’t as sophisticated as other countries which have already built in legacy components to their giving.

The Christchurch Foundation works for the donors rather than the charities. The individual donor decides which charities to support, although they do have a matching service. “It’s a bit like Tinder,” Amy says. “We can match donors to causes or projects that are aligned to what they want to achieve. It could be women’s health, sports, community housing. And, if the cheque is big enough, we can build specific programmes for donors.”

The donor threshold is $100k for a named fund. “But we have other funds which people can contribute smaller amounts. We are actually kind of an overarching umbrella with hundreds of funds sitting under us.”

The Foundation also work with corporate donors providing their CSR [Corporate Social Responsibility] functions for them as an outsourced but integrated service.

The Foundation doesn’t see itself as a competitor with the 3800 charities in greater Christchurch. “We don’t compete with them, we pass money to them – either as annual gifting or one off gifts. So we’re effectively an add-on service.

“As we’re relatively new there was certainly a bit of trepidation from some of the charities when we started. We had to prove we weren’t competing with them on their funding sources, but seeking new money. As the pass-through gifting model became established charities have been able to see the positive impacts.”

Governance structure

The governance team of the Foundation is made up of a voluntary board. The operations team comprises three staff and contractors are brought in to support larger projects – and these are usually paid for by the project donors.

The board brings not-for-profit, commercial and local government experience to the table. “Most charities don’t operate at the scale we can, nor have the kind of governance structures we have; for example, having Humphry Rolleston as their chair or the mayor sitting on the board. We’re breaking new ground…and the experience around the board table means we can apply different lenses to the projects we support.”

These projects are based in the greater Christchurch region but donors may live in other parts of New Zealand and around the world. As such the Foundation has established sister organisations in the UK for expat donors and are working with a US entity to deliver the same service there.

Collaboration with the sector and within the sector

One of the advantages of community trusts and community foundations is that they have a view of the whole charity ecosystem. “We have a good feel on what’s already on offer in NFPs and charities. Directors of charities often come to us asking whether there is a need for a service or whether there are others in the space.”

Big events like the earthquake, COVID-19 and the Christchurch mosque shootings led to greater collaboration amongst charities. “With the earthquake our hand was forced. We had to collaborate and many local charities started looking at shared overhead models and shared co-working spaces. Government and non-government entities also came together on projects, each providing unique specialisation and skill-sets to different areas.”

Also, with charities as beneficiaries of the endowments there’s a guaranteed income stream to them  – so this model is building resilience within the sector.

“We have access to big business through our networks. This allows us to amplify opportunities for the charities through these connections. The public-private partnership is definitely key to the success and scale of the project.”

“Governance is crucial to the success of the Foundation. I’d definitely recommend that charities do invest the time in upskilling and growing expertise in governance through the likes of the Institute of Directors, Philanthropy New Zealand and Fundraising New Zealand.”

References and resources

• ¹ From the Community Foundations of New Zealand website 
• For more information on Community Trusts, see the Community Trusts explained article 
• For information on charities, see the Charities Office website 
• For a more recent example of how Community Foundations can provide support to charities, see article by Liz Koh, deputy chair of the Nikau Foundation published in Stuff.