Community foundations are a vital part of the philanthropic environment. According to a report from Effective Philanthropy, these organizations deliver more than $4 billion in funds annually and control about $58 billion in assets. There are approximately 750 community foundations across the U.S. However, these organizations are increasingly facing challenges. As the number of community foundations grows, these groups are competing for donations, leading some to wonder if the community foundation model is sustainable.

For a few years now, foundations have been competing for donor dollars, and organizations that fail to increase their assets may not be around much longer. During the Council on Foundation’s fall meeting in 2011, Emmett Carson, CEO of the Silicon Valley Community Foundation, spoke about the state of competition and what it meant for the foundation leaders in the room, San Francisco Business Times reported.

“In five or 10 years, I fear that many of the institutions in this room won’t be here,” Carson said.

In addition to dealing with competition from other foundations, these groups can put themselves ahead by engaging nonprofits and becoming community leaders. However, this also requires transparency.

How community foundations can stay effective donor relationships

Donor satisfaction is one of the highest priorities and one of the greatest predictors of success for community foundations. Donors want to know their funds are being used the way they were intended, which means they desire frequent and transparent communication. When they ask a question, they want it answered quickly. According to Effective Philanthropy’s report, one of the best measures of donor satisfaction is a foundation’s responsiveness and the donor’s perception of the foundation’s impact on the community.

Because finding new donors can be costly and time-consuming, foundations should focus on cultivating existing donor relationships to maximize assets. But how do these foundations go about maintaining positive interactions with donors? Using the right tools, foundations can make sure they are organized, on top of their reporting, and ready to respond when a donor asks about something specific.

CommunityForce’s grant management software has business intelligence tools that enable foundation staff to quickly put together reports that outline how donor funds are being used. The grant management platform makes it easier for foundations to remain responsive to constituents who want visibility into the grantmaking process. In addition, grant management tools allow foundations to be more effective throughout the grantmaking process, ensuring that funds are delivered to the nonprofit organizations whose projects best meet the outlined goals of the foundation and its donors.