Philanthropy and Public Life:
A Question of Civil Investing

By Scott London

Over the past decade, civil investing has emerged as one of the most important new developments in American philanthropy. Not quite a philosophy, not quite grantmaking strategy and not quite a type of grant, but something of all three, civil investing can be broadly defined as the use of philanthropic resources for building community and strengthening public life.

The theory and practice of civil investing traces back to a series of groundbreaking dialogues, first convened in the fall of 1993 by the Council of Foundations, the Kettering Foundation and the Indiana University Center on Philanthropy. The meetings brought together a small group of foundation executives to explore the deepening divide between philanthropy and civil society.

Conventional grantmaking strategies, for all their good intentions, too often fail where they matter most.... Instead of backing comprehensive community-building strategies, they invest in short-lived projects and piecemeal measures that may bring temporary benefits but seldom produce lasting changes.

At the time, there was growing concern that the foundation world, despite its best efforts, had done very little to stem the decline of civic engagement and the crisis of confidence in many of the nation's public institutions. In some cases, philanthropy had actually exacerbated public cynicism and mistrust by pursuing its own ideas about advancing the common good without cultivating a genuine dialogue with the communities it was bent on serving.

The seminars, which continued over the course of eight years, stimulated a rich and lively discussion in the grantmaking community, one that spread to the pages of the Chronicle of Philanthropy, Foundation News & Commentary and other places, and inspired an array of new and innovative funding initiatives.

Today, the idea of civil investing has taken hold in the foundation world. Terms like social capital, public will, and civic infrastructure, once brushed aside as abstract and academic, seem more relevant than ever and now crop up regularly in trade journals, mission statements, press releases, and even grant-making guidelines.

Yet the perception remains that conventional funding strategies, for all their good intentions, too often fail where they matter most. Rather than tapping or cultivating the inherent strengths of the communities they wish to support, grantmakers fall back on tried-and-true formulas and copycat prescriptions. Instead of backing comprehensive community-building strategies, they invest in short-lived projects and piecemeal measures that may bring temporary benefits but seldom produce lasting changes. And rather than developing indigenous leadership and building strong, working relationships, they rely on institutional partners with different agendas, working styles, and degrees of commitment.

In 2003, ten years after the launch of the civil investing seminars, the Kettering Foundation and the Pew Partnership for Civic Change convened a second round of dialogues aimed at addressing these issues. The purpose of the talks was to tap the insight and experience of not only foundation executives but also community leaders and nonprofit directors whose work in the field holds promise for a new and different kind of grantmaking. The planning team recognized that while philanthropists and civic leaders tend to work side by side, both striving to build community and promote robust democratic practices, they rarely come together to identify common concerns and develop joint strategies for change.

Over the course of three day-long gatherings spread over twelve months, the group examined a number of pressing questions:

  • What is civil investing and how is it different from other types of grantmaking?
  • How do communities come together to identify their problems and frame potential solutions
  • How do government agencies, service providers, grantmaking institutions, and other outsiders enter into relationships with communities, and to what effect?
  • What role do intermediary organizations play and how do they help (or hinder) community development efforts?
  • What is the relationship between community-building and accountability?
  • How do current trends in American philanthropy, such as the growing emphasis on measurable outcomes and the rise of new donors, affect grantmaking initiatives aimed at revitalizing community and nurturing public life?

The questions spawned a rich and wide-ranging conversation about the public purposes of philanthropy and the practical challenges facing grantmakers bent of building strong and sustainable communities. At its best, the group agreed, civil investing is rooted in a commitment to strong democratic practices. It emphasizes doing with, not simply doing for, communities. It focuses on long-term change, not merely short-term development. It attempts to span boundaries and bridge sectors. And, perhaps most importantly, it puts a premium on relationships — relationships between individuals and organizations in the community, to be sure, but also between grantmaker and grantee.

The participants stressed that not all community development efforts fall under the rubric of civil investing. In fact, conventional giving patterns often act as a hindrance rather than a help to civic renewal, they said. Short-term funding cycles and misguided systems of evaluation are routinely get in the way of long-term community development. Programs also fall short of their goals by not tapping into vital civic resources and energy, building effective relationships with the public, developing broad-based networks and coalitions, or simply sustaining the commitment over the long haul.

Speaking from firsthand experience about what makes community development initiatives a success, the civic leaders in the group pointed to a number of common features. They said that effective civil investing confers a range of benefits, not just money. It emphasizes process, not simply end results. It is comprehensive and sustained, not limited to short-term goals or funding cycles. And it puts a premium on leadership development and relationship-building, not just "getting things done."

How do foundations and nonprofit organizations embrace the ideas of civil investing and infuse them into their day-to-day programs and activities? A powerful first step, the group agreed, is to incorporate the principles of civil investing into the organization's mission statement. "Civil investing cannon be a phenomenon, it cannot be a program, it cannot be something that you just invent or adopt for six months 'to see if it works,'" said Ruth Shack, president of the Dade Community Foundation. Anna Faith Jones, president emeritus of the Boston Foundation, concurred. "It has to be grounded in the mission," she observed. The best hope of bringing trustees, program staff, and grantees into alignment is to structure the organizations work around a set of clear and concise principles.

Examples of successful civil investing efforts show that while funding is an essential ingredient, it only one of many factors that contribute to effective grantmaking. The community leaders in the group spoke of a wide range of benefits conferred by foundations that go beyond financial support. These include ideas and information, technical and administrative assistance, training and capacity-building, networking and access, and even public-relations know-how.

But most importantly, foundations and grantees committed to civil investing ought to design their programs so they build and strengthen essential democratic practices. Civil investing, at its best, promotes the habits of public participation; nurtures a capacity for dialogue and deliberation; encourages the process of identifying challenges and laying out potential ways of meeting them; and, not least, helps people take matters into their own hands and engage in public work.

Through a combination of these kinds of efforts, grantmakers can foster an organizational culture that encourages authentic dialogue with communities, fosters relationships based on trust and reciprocity, cultivates intentional learning and development, and ultimately nurtures vibrant and self-sustaining democratic practices.

This essay appears in the Winter 2006 issue of Connections magazine. It was adapted from Investing in Public Life: A Report from the 2003-2004 Dialogues on Civil Investing, jointly published by the Kettering Foundation and the Pew Partnership for Civic Change. The publication is available in PDF-format here.