Social Funds 42738 Innovations Notes Community Foundations ­ The Relevance for Social Funds in Urban Areas: The Tanzania Social Action Fund Experience IDA MANJOLO, SERVACIUS B. LIKWELILE,AMADEUS M. KAMAGENGE, JURAJ MESIK,AND DANIEL OWEN T his dissemination note captures early experience with In expanding its work into Tanzania's urban centers, the TASAF community foundations supported by social funds, introduced and tested community foundations as a develop- with a look in particular at the Tanzania Social Action Fund ment intervention for urban community-driven development. (TASAF). Social funds are agencies or programs that provide Community foundations are local philanthropic institutions financing in the form of community grants for small-scale that seek to provide a mechanism for local resource mobiliza- development investments that are identified, prepared, and tion and to develop capacity among community-based organi- implemented by local actors.Two key challenges are sustain- zations.They are also valuable in assisting local development, ability of community investments and reaching urban areas strengthening resourcefulness and capacity, attracting new in a time of increasing urbanization. resources, and cultivating philanthropy from local donors. THE SUSTAINABILITY CHALLENGE OF ity building in group savings.Through TASAF, community SOCIAL FUNDS IN URBANAREAS assets are created, incomes are generated, and skills are transferred and enhanced.Additional benefits include Social funds face a common challenge of sustaining the enhanced downward accountability, social cohesion, and community capacities that are built and investments that trust. Implementation of TASAF is decentralized and fully are supported beyond the relatively short lifespan of exter- mainstreamed into local government authorities. nal funding. For long-term sustainability, external funding needs to be replaced by a steady flow of domestic revenue. With rapid urbanization, the need to develop new mecha- nisms to extend community-driven development (CDD) The Tanzania Social Action Fund (TASAF) was established operations into urban areas is high and growing.A num- in 2000. Its first phase--from 2000 to 2004--covered ber of factors make it difficult to start and sustain CDD rural areas in 40 districts and two islands in Zanzibar. operations in urban areas.These are generally character- TASAF-II has scaled up the program to all districts and ized by diverse, heterogeneous, and mobile populations, runs from 2005 to 2009.The project development objec- with a mixture of rich and poor people, educated and tive is to empower communities so that they can identify, non-educated individuals, and big and small businesses. implement, and monitor subprojects that contribute to Political activism (with varying ideologies) is also high. improved livelihoods. These characteristics of urban areas present challenges Targeted beneficiaries of the project are communities in mobilizing people and convening meetings to discuss with poor access to basic social and market services, social issues, identifying areas of common interest, and food-insecure households, and vulnerable individuals. In reaching consensus on where support should go and how addition, the project supports mobilization and capac- it should be delivered and maintained.A major challenge T H E WO R L D B A N K F E B RUA RY 2 0 0 8 VO L U M E 5 N O. 1 sf news VOL 5 2-25-08.indd 1 sf news VOL 2-25-08.indd 2/25/08 1:17:34 PM 2/25/08 1:17:34 PM for TASAF has thus been how to support financially and The dependence of CFs on local contributions also operationally sustainable initiatives in these urban areas, means that their work is under strict local scrutiny and is where social and economic issues are complex and where expected to be transparent.A policy on conflict of inter- communities often have lower levels of social capital. est and a Board and staff committed to implementation are other fundamental prerequisites for the success of MOTIVATION FORADOPTINGA COMMUNITY community foundations. FOUNDATIONAPPROACH The formation of Community Foundations under TASAF The Community foundation (CF) approach offers a num- is expected to allow several key improvements: ber of advantages for urban work. Community founda- tions are independent organizations that provide grants to · Capacity utilization and enhancement:TASAF has built support a variety of projects identified and implemented significant capacity within communities in project by local residents.A CF does not replace the scale of management, accounting, procurement, and partici- resources and national reach achieved by social funds. But patory monitoring. CFs are an avenue for ensuring it can provide a partial answer to the sustainability chal- long-term use of such capacity and the maintenance lenge in some large and medium-size urban areas, where it of initiatives. can mobilize local resources and sustain social dynamism and participation in broad areas of development work. · Improved governance: CFs play an important role in facilitating improved local governance through par- CFs are formed as partnerships between local civil ticipation, promoting policies on conflict of interest, society organizations, the business community, and gov- transparency, and oversight of development interven- ernmental bodies and are independently registered.This provides opportunities for building closer ties among these sectors based on the authentic partnership model. Diversity of donors is a crucial element of a CF's stabil- ity and sustainability.A portion of the funds raised may Box 1:Defining Characteristics of a be allocated to an endowment fund, which gradually Community Foundation becomes the second pillar of a CF's financial sustainability. Community foundations are distinguished from other · CFs act as grant-making foundations supporting forms of local development organizations by six charac- development projects. teristics. (See Box 1.) · They have a broadly defined mission (for exam- ple, to improve quality of life in a community). The CF Governing Board decides on the type of projects · They serve geographically defined urban com- to support, which varies according to local needs. CFs munities--a city, district, or province. have a limited funding base, anchored primarily in dona- tions from local individuals, businesses, and sometimes · They are supported by a broad range of pri- government sources.The average size of CF grants typi- vate as well as public donors and seek philan- cally ranges from a few hundred dollars to a few thou- thropic contributions primarily from inside the sand.This is understandable due to their more limited community. domestic funding base. CF grantmaking is typically com- · They are governed by multisectoral local petitive and driven by project proposals from local groups boards reflecting the community. or individuals. Proposals are evaluated by the CF Board or grant committee. Some CFs allocate part of their bud- · CFs build capital endowment, which is an get specifically for educational, health, youth, environmen- important element of sustainability. tal, cultural, or other fields identified as a local priority. T H E WO R L D B A N K 2 F E B RUA RY 2 0 0 8 VO L U M E 5 N O. 1 sf news VOL 5 2-25-08.indd 2 sf news VOL 2-25-08.indd 2/25/08 1:17:34 PM 2/25/08 1:17:34 PM tions by civil society as well as the private and public TASAF's Management Unit played several critical roles in sectors. early CF promotion and formation: · Tapping extra resources for poor communities: Demand · It helped select pilot urban centers with the high- for resources by poor communities far exceeds est potential for success of an eventual community support channelled through TASAF. CFs are instru- foundation. mental in mobilizing and leveraging additional funds from a variety of sources and in building endow- · It identified and convened leaders who communi- ment funds. ties trusted from the public sector, private sec- tor, and civil society, including academia. During · Community empowerment:The overriding objective the sensitization workshops, the CF concept was of TASAF is the empowerment of communities. introduced and stakeholders discussed the pros Community foundations achieve this by providing and cons of establishing a CF in their community. people with transparent, fair, and simple access to After extensive debate, four pilot communities funds and other lasting resources. endorsed the idea of establishing CFs, and Steering Committees were elected to manage preparatory · Building local aid absorption capacity: Properly devel- work.To guide the work of these committees, the oped CFs have in place all the systems needed for terms of reference and deadlines for delivery were entering into direct funding relationships with exter- set and approved. nal donors that may want to support projects in areas served by the CF but that lack local knowledge · It facilitated CF sensitization workshops in such a and capacity. way that participants would not feel pushed to do something they did not desire.The Management INTRODUCING COMMUNITY FOUNDATIONS Unit, for instance, repeatedly stressed that the INTANZANIA TASAF or the World Bank would not put any cash into any CF that might come out of the process.This TASAF introduced the concept of Community was critical so as not to provide wrong incentives Foundations to urban communities in Tanzania by orga- for community leaders to join and in order to avoid nizing stakeholders' consultations and CF sensitization false expectations. workshops.The first round of workshops was conducted between December 2006 and May 2007 in Kinondoni Once the Steering Committees were formed,TASAF Municipality (some 1.3 million inhabitants), Mwanza City continued to provide technical support, which included (378,000 inhabitants), Morogoro Municipality (228,000 sample documents such as bylaws, policies, and budgets as inhabitants) and Arusha Municipality (282,000 inhabit- well as facilitation of critical links to community founda- ants).These areas were selected for their availability of tions practitioners in other countries. local wealth, their vibrant economic activities, and the numerous businesses in the municipalities, including DEVELOPMENT OFTHE FIRST COMMUNITY commercial banks, mining, breweries, hotels, and cellular FOUNDATIONS INTANZANIA phone companies. Skilled individuals able to govern and manage complex CFs and the readiness and commit- Kinondoni Municipality, one of three municipalities in ment of municipal and city councils to support the initia- Dar Es Salaam, launched the Kinondoni Community tive were other critical considerations.These four areas Foundation (KCF) in April 2007, about five months after are representative of urban centers in Tanzania and will the CF sensitization workshop. During the launching event be important for the replication of the community foun- stakeholders discussed and endorsed the KCF draft Trust dations initiatives. Deed and other key policy documents and endorsed the T H E WO R L D B A N K 3 F E B RUA RY 2 0 0 8 VO L U M E 5 N O. 1 sf news VOL 5 2-25-08.indd 3 sf news VOL 2-25-08.indd 2/25/08 1:17:34 PM 2/25/08 1:17:34 PM 14 members of the founding Board of Trustees proposed challenges.This would fill in the financing gap, as by the Steering Committee.The initial KCF Board includes TASAF is not able to finance all requests made by three Members of Parliament, four representatives from communities. local government, and seven members of civil society and the business community.The launch was leveraged as an · Communities in municipalities and cities welcome opportunity to raise funds and pledges from stakeholders CFs since they have no limited lifetime, unlike TASAF, that totaled over $33,000.The identification of priority which is a project. Sustainability is thus guaranteed, focus areas is under way, with malaria, cholera, and fistula especially given the prospect of building a perma- interventions set as the first priorities. nent endowment fund.This feature makes com- munity foundations especially attractive to strategic In Arusha, a Community Foundation Steering Committee leaders concerned about sustainability of project was established in May 2007.Within six months the financing. Committee met 20 times and prepared the CF con- stitution, conflict of interest policy, transparency and · Full local ownership and independence of a commu- grant-making policies, fundraising strategy (with a list of nity foundation is a must for a successful start.TASAF potential local contributors), and business plan.These succeeded in fostering this because it understood its documents as well as the Board were confirmed at role as facilitator, not owner, of the process. a stakeholders meeting and launching of the Arusha Municipal Community Foundation in early December · It is very important--and not easy--to resist the 2007.At the launch, $19,500 was raised from 51 local temptation to get involved in a larger number of CFs individuals and corporate contributors.The field of educa- prior to achieving progress in selected pilots.As soon tion was identified by the Board as the most likely initial as the information about the community foundation focus area for CF grants. work spread around Tanzania, a number of urban centers requested assistance in starting their own LESSONS LEARNED SO FAR FROM foundations. COMMUNITY FOUNDATIONS IN URBAN TANZANIA · Once the first CFs were launched, a powerful catalyst to their development involved exposing the Board · The leaders of selected pilot urban communities members to CF experiences abroad.This was possible considered CFs as an opportunity for mobilization with the support of the Global Fund for Community of additional resources to address development Foundations (www.wings-globalfund.org). Social Funds Innovations Notes are published informally by the Social Funds thematic group of the Human Development Network ­ Social Protection.The findings, interpretations, and conclusions expressed in this Note are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. For additional copies, contact the Social Protection Advisory Service,The World Bank, 1818 H Street, NW,Washington, DC 20433, USA, E-mail: socialprotection@worldbank.org. Copies are also available on-line at http://www.worldbank.org/socialfunds. T H E WO R L D B A N K 4 F E B RUA RY 2 0 0 8 VO L U M E 5 N O. 1 sf news VOL 5 2-25-08.indd 4 sf news VOL 2-25-08.indd 2/25/08 1:17:35 PM 2/25/08 1:17:35 PM