Community foundations are critical actors in local efforts to advance upward mobility and play a variety of roles in these initiatives. For example, as backbone organizations that transcend political cycles, they host cross-sector collaboratives committed to aligning around a shared set of goals. Many also provide seed funding and investments for prototyping and test promising new programs. Other community foundations gather and disseminate data about local upward mobility and equity conditions and host community advisory boards that help shape key priorities.
Because funders of many types look to their community foundation for guidance on local priorities, community foundations are uniquely positioned to leverage their influence to align funders across sectors. Beyond civic leadership, one of the core roles of community foundations is to allocate donors’ money to causes meaningful to donors and which serve the community’s needs. One way this is done is by an individual contributing a charitable contribution to a donor-advised fund (DAF) that is stewarded by a community foundation. Donors get an immediate tax break when they contribute and can then specify where they want the foundation to allocate their money.
The challenge with this model is that it can be difficult for fundholders and other community funders to know how their dollars are directly addressing upward mobility and for community foundations to quantify investments over time. There is also some criticism that funds can sit in DAFs for long periods of time and not be distributed in a timely manner, and there was even a bill introduced in Congress that proposed a penalty on contributions to DAFs that are not distributed in a timely manner.
But a few community foundations around the country are experimenting with new ways to align donor-advised funds and other community funders with upward mobility and equity goals. Communities can look to Charlotte, North Carolina’s Leading on Opportunity (LOO) initiative as a model.
Using data to align funding to upward mobility goals
In 2022, LOO developed the Opportunity Compass, a data visualization tool for measuring the City of Charlotte and Mecklenburg County’s collective progress toward economic mobility. The compass displays data on more than 20 key drivers of economic mobility across five areas of improvement and is intended to provide a shared language and accessible visualizations to aid organizations—including LOO—in grantmaking, fundraising, community organizing, program planning, and policy development.
“People often think about data as an accountability tool,” says AJ Calhoun, director of research and impact at LOO, an entity of the Foundation For The Carolinas focused on serving the Charlotte-Mecklenburg region. “But we’re trying to reframe our use of data as an alignment tool that can help us to build some collective directionality in how resources are employed in the community.”
LOO is using the Opportunity Compass to help funders understand how their giving leads to impact. A new version of the tool, to be released later this year, allows grantmakers to submit data on their funding and see how those dollars are moving the drivers of upward mobility. These data from funders are paired with programmatic information from nonprofits to create a nuanced portrait of impact in the Charlotte region.
Leaders from more than 100 English- and Spanish-speaking Charlotte-area nonprofits have learned how to use the compass to report impact, tell their story, and plan for the future. Leading on Opportunity hosted more than 50 hours of Opportunity Compass workshops with nonprofits and developed funder impact reports for Ally Financial, Atrium Health, Bank of America, and Mecklenburg County.
“We hope many more organizations see the benefit of aligning their programs and investments to the Compass in the years to come,” Calhoun says. “We’re excited that this new way of leveraging data has helped funders understand their impact and align their grantmaking to community needs.”
Helping donors contribute to community-wide efforts
For donors, whether organizations or donor-advised fundholders, this approach helps them see their money through a shared upward mobility lens, better understand the effectiveness of their giving, have insights into how peers allocate money, and help them see how they are part of something larger and contributing to a community-wide response. For LOO, this approach helps develop a clearer picture of how dollars are moving in the community and makes sure everyone is focused on the same collective goals.
“Every donor has their own set of priorities, but if we’re focused in different places and it doesn’t add up to anything—that’s a bad a thing,” says Calhoun. “As a community foundation, one of our greatest assets is our social capital and leadership in the upward mobility ecosystem.”
Compass 2.0, which is expected to go live later this year, updates the initial tool from 2022 to measure more than 80 indicators of upward mobility across key areas of improvement, including early care and education, college and career readiness, child and family stability, and the impacts of segregation. Each indicator in the compass is aligned to or adapted from the Urban Institute’s Upward Mobility Framework Mobility Metrics, data found in Opportunity Insights’ Opportunity Atlas, or Results for America’s Economic Mobility Catalog.
With 50 additional indicators and a more user-friendly design for funders and nonprofits alike, Compass 2.0 will offer more detail and access to data across the board. Participating funders and nonprofits will have login access to their content and information, providing a custom data experience.
Maintaining momentum toward upward mobility
Leading on Opportunity and the Charlotte-Mecklenburg region are still in the spotlight—locally and nationally—after the publication of Opportunity Insights’ second economic mobility study, which updated rankings from its 2014 study where Charlotte was found to be at the very bottom of a list of the 50 largest US cities in terms of its outcomes for children. Happily, the city of Charlotte is now ranked 38 on the list and is ranked number 3 out of 50 on economic mobility progress.
“We need to maintain that interest in upward mobility, if not grow it,” Calhoun says. “And also hold firm to the assertion that, much like physical fitness, economic mobility is a lifetime commitment, not a quick fix.” Using a consistent framework, like the Opportunity Compass, to guide strategy, measure progress, and mobilize and align investment is a key way to maintain that focus.
Learn more about Charlotte-Mecklenburg’s accomplishments in the Upward Mobility Initiative’s Mobility Action Learning Network.
