Funding Intermediaries as a Strategy for Local Grantmaking: The John D. and Catherine T. MacArthur Foundation & the Local Initiatives Support Corporations (LISC) Chicago

Loyola University Chicago



Case Study Sector

Community Building

Philanthropies have engaged in a number of different strategies to improve their effectiveness, including conducting evaluations, focusing on and rewarding measurable outcomes and organizational performance, and restructuring their grantmaking activities. Among philanthropies that support community development activities that aim to economically revitalize communities and reduce poverty, one strategy used by foundations for improving efficiency and effectiveness has been to support intermediaries that specialize in funding a particular type of organization or activity. This case study focuses on the experience of one foundation, the John D. and Catherine T. MacArthur Foundation, in its effort to improve grantmaking effectiveness and the impact of its support on some of the most distressed neighborhoods in Chicago through the special funding of Local Initiatives Support Corporation (LISC) Chicago, a community development intermediary.

This case offers an example of a strategy taken by a large foundation to improve its efficiency by shifting its community development grantmaking from a "retail" system to a "wholesale" program. The new program, the New Communities Program (NCP), is managed by LISC Chicago which distributes funds from the MacArthur Foundation and other funders to community-building activities at the neighborhood level consistent with comprehensive plans created by residents in those neighborhoods.

This case study appears in the collection Lessons from Philanthropy: A Case Studies Approach: A Report to the Ford Foundation. The case studies are designed to increase the relevance of philanthropy teaching curriculums and better prepare future leaders that are engaged in philanthropy and nonprofit sector work. The overall goal of the present project was to develop case studies that would serve as teaching/learning tools about philanthropy by providing in-depth examination of critical issues and experiences related to foundation decision-making, governance and fund- distribution. Throughout the development of these cases, a special emphasis on philanthropic involvement in communities of color and other underserved communities was maintained in order to improve philanthropy’s work in relation to these populations.



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