The Social Challenge
Localizing Community Development
Grassroots organizations are the engines for community transformation — they promote human rights, advance entrepreneurship, drive reforestation — but a lack of reliable and stable funding streams impedes their efforts. Locally based funders, such as community foundations, began emerging in Mexico at the turn of the millennium as a revolutionary solution to reduce grassroots organizations’ dependence on erratic or inflexible foreign funding. Community foundations, unlike international funders, invest in the ideas and needs of organizations in their own geographic areas and are accountable to their communities. However, community foundations in Mexico lacked the shared strategic vision and coordination they would need to overcome the many legal, financial and social constraints against fulfilling their potential to support local development efforts effectively.
Localizing Development: The IAF-Mott Public-Private Partnership in Mexico
- Inter-American Foundation (IAF), an independent U.S. government agency that supports community-led development in Latin America and the Caribbean
- Charles Stewart Mott Foundation, a private foundation that supports nonprofits dedicated to civil society, education and the environment
The Idea and the Action
Building on more than a decade of collaboration with Mexican community foundations, the IAF and Mott launched a public-private partnership in 2012 to expand local philanthropy in Mexico. The partners began with a forward-looking study that revealed several structural constraints within the sector: legal limitations, low public trust in civil society, significant staff turnover, insufficient training opportunities, and a lack of standards in transparency and other key aspects of philanthropic organizations. In the years that followed, the partners invested in two main areas to address these issues:
1. Seed funding to support community foundations in mobilizing local resources and turning local ideas into actions
2. Technical assistance and training in grassroots development and grantmaking for young leaders, institutional strengthening, and monitoring and evaluation
Since its inception, the IAF-Mott joint investment of $2.67 million has mobilized an additional $10.67 million — 97 percent Mexican in origin — that has benefited 180 grassroots organizations dedicated to boosting small businesses, sustainable agriculture and youth civic engagement programs. In other words, the $13.3 million partnership has leveraged $4 from local sources for every $1 invested by IAF-Mott.
The partnership has strengthened community foundations’ strategic planning, resource mobilization and communications, ensuring the foundations themselves are sustainable. Partnering with reputable co-funders and developing standards and best practices has built community foundations’ credibility with donors and nonprofits, key to sustaining local funding arrangements over time. But the truly transformational aspect of the IAF-Mott partnership is that it has put underserved communities in control of designing and implementing projects to improve their quality of life. This local ownership is crucial to the success and sustainability of these grassroots projects.
The IAF-Mott partnership has revitalized the community foundation sector in Mexico. Through their collaboration with the IAF and Mott, community foundations formed Comunalia, an umbrella organization that currently represents 94 percent of Mexico’s community foundations. Today, more than 400 communities — comprising close to 30,000 rural and vulnerable Mexicans — can tap into local resources to create jobs, strengthen food security, build disaster resilience, and invest in youth, women and other underserved groups.
As a result of the partnership, community foundations increased investment in community-led development by almost 40 percent between 2008 and 2014, and their dependence on foreign donations decreased by 35 percent, according to a 2016 study. The devastating 2017 earthquakes put community foundations’ increased capacity to the test. They quickly raised three-quarters of a million dollars from Mexican sources to address long-term reconstruction in earthquake-affected areas, more than matching the contribution of external partners.
By incubating Comunalia, the IAF and Mott have fostered opportunities for civic engagement among underserved communities and ultimately contributed to a more robust democracy in Mexico.
If brought to scale, the IAF-Mott partnership model holds the potential to shift development paradigms.
The Faculty Insight
Poverty, natural disasters, health care issues, automation and evolving workforce development needs — as government supports shrink, the vast array of social problems continues to grow, and the need to deploy resources in equitable and well-informed ways has never been more important. IAF-Mott’s public-private partnership is a powerful example of the potential of collaboration to go beyond social impact to be a catalyst for community-led, sustainable development.
While philanthropy has historically been relied upon to address community needs, community-driven solutions have shown greater sustainability than those framed by foundations. Business’ innate customer focus makes it an ideal partner in driving essential changes to funding strategies. Localizing development in poorer communities with fewer resources heightens the potential to build capacity to create impact at scale. As large, well-funded and well-respected organizations, the Mott Foundation and IAF have the social capital to foster greater collaboration and solidarity among local community foundations.
These are principles other organizations around the world are adopting: leveraging their roles in society to establish institutions that are better positioned to address local problems and solutions. For example, Get In Chicago, the corporate social impact fund, was able to leverage expertise beyond the generalists of any one foundation to bolster social impact through learning communities, best practices briefings, and forums for community-based organizations to share information and troubleshoot challenges.
Getting closer to the ground means not having to rely on grantee reports that sound good, but being in a position to assess which programs are best equipped to do good. International funders are rarely staffed with the expertise to adequately assess local program impact or implementation fidelity.
Backbone organizations like the one this partnership formed, Comunalia, are needed not just for their ability to diversify and deepen funding pools, but because they can be structured to inform strategic planning, facilitate staff development, and provide oversight to organize mentorship among grantees — thus building stronger organizations and greater likelihood for meaningful outcomes. Additionally, enabling Mexico-based philanthropy opens the possibility for more sustainable projects by utilizing program managers with ties to the communities they support. The closer people are to the problem, the better they will be able to anticipate capacity limitations, implementation issues or barriers to sustainability.
Partnerships aren’t all just exciting opportunity. Strong human capital is key to successfully supporting evidence-informed interventions. Building sound, functional relationships are time-consuming, require additional capacity to align operational processes and communication, and depend on trust. Yet the opportunities far outweigh the challenges when a well-structured P3 can engender, support and measure social impact. Empowering communities to collaborate, reduce inequality and increase opportunity are exactly the kind of sustainable development goals that public-private partnerships were built for.
The Darden School of Business’ Institute for Business in Society partners with Concordia and the U.S. Department of State Secretary’s Office of Global Partnerships to present the annual P3 Impact Award, which recognizes leading public-private partnerships that improve communities around the world. This year’s award will be presented at the digital Concordia Annual Summit 21–25 September 2020. The five finalists will be highlighted on Darden Ideas to Action on Fridays leading up to the event.
This article was developed with the support of Darden’s Institute for Business in Society, at which Maggie Morse is director of programs.