The Diversity Imperative: Changing Effectiveness of Social Capital on Community Philanthropy

Abstract

Community philanthropy as an institutionalized form of collective action plays an important symbolic role in resolving community issues, and social science scholars suggest that building effective social capital facilitates collective action such as community philanthropy. Putnam (2007) argues that community diversity dampens social capital, which leads to less effective collective action and economic development. However, this study examines the contingent effects of community diversity in race and industrial structure on a relationship between social capital and three classifications of community philanthropy at the U.S. county level in 2005, 2009, and 2014: 1) elite-oriented, 2) social welfare-oriented, and 3) public-oriented. Findings reveal that racial and industrial diversity of a community plays a moderating role in facilitating the effects of social capital on community philanthropy. These results also illustrate important policy implications for promoting community diversity that are relevant for local policy makers, community leaders, and nonprofit practitioners. This study implies that communities that are diverse in race and industry may continue to build effective social capital, which leads to the growth of community philanthropy to resolve collective social problems.