This post originally appeared on the European Foundation Center’s blog. The original article can be found here>

Proposals to fund physical development projects tend to get a cold reception in philanthropy. Albie Sachs, former chief justice of South Africa’s Constitutional Court, recently wrote that reformers in his country long ago learned that they could attract international donations for programs, organisations, services, campaigns — “but never, ever buildings.”

There are reasons to overcome the phobia. When properly planned, designed, built and managed, buildings can incubate all kinds of social reform, innovation, intellectual advancement, community cohesion, and political change. They can build confidence in emerging movements, empower constituencies and leaders, and reinvigorate troubled environments. Admittedly, these possibilities may not be easy to prove, given the scarcity of rigorous evaluations of the social and economic benefits of these projects.

But to many funders, the upside tends to be overshadowed by the prospect of complex, expensive undertakings whose costs are nearly all sunk before their results can be known. Sceptics envision long-term risks in which facilities are put to disappointing use or eroded by poor maintenance, and where unrelenting expenses and treacherous real estate markets end up jeopardising the very grantees the projects were meant to help.

To help funders weigh the opportunities and challenges of physical-capital philanthropy, the European Foundation Centre hosted a debate on 10 September, entitled “Perspectives on the Built Environment: A Recipe for Community Transformation?” (Note the question mark. The discussion was lively, reflecting far more than one perspective.)

The debate came in two parts. In the first, Christopher G. Oechsli, chief executive of The Atlantic Philanthropies, began by describing his institution’s approach to supporting capital projects, emphasising the social benefits they achieved but including some instances in which Atlantic might have wished its decisions had been made differently. Martin Bradley, chair of the Millennium Forum Theatre in Derry, Northern Ireland, and former mayor of that city, described how the creation of the theatre (which Atlantic supported) eventually provided a center of cohesion and vitality in a once-dispirited and violence-torn city. But first, he noted, the venture had to weather a year of near-bankruptcy, when initial forecasts for rental and box-office income proved dangerously optimistic and the theatre nearly closed. New management and time for audience-building eventually proved that the danger was temporary and that such risks can be managed. Finally, Michael Murphy, executive director of MASS Design, a nonprofit architecture firm dedicated to social-interest projects, described his organisation’s evaluation of 15 capital grants funded by Atlantic and the U.S.-based S.D. Bechtel Foundation. He argued for more intentional and inclusive planning before the design stage, and for incorporating thorough, objective evaluation into the overall funding.

A second panel then examined the costs and benefits of capital philanthropy with three specific European examples. Pelle Lind Bournonville, special advisor to the CEO of Realdania, a 155,000-member philanthropic association, described how his organisation had lately sought to become a prime convener of overlapping (or conflicting) interests around the preservation or development of community spaces. For example, one of Realdania’s Collective Impact groups focuses on preserving the built heritage in rural communities, and another seeks consensus on the use of rural assets among such competing forces as industry, agriculture, and conservation. Representing Italy’s Fondazione con il Sud (Foundation with the South), Daniela Castagno described the Fondazione’s program to reclaim and repurpose property seized from organised crime figures ­— at once helping to degrade the criminal enterprise and enrich the communities the syndicates had victimised. Finally Andrew Pinkerton, project development manager for the Isle of Luing Community Trust, described the establishment of a transformative center for community, tourism, and heritage on a small island in Western Scotland. In all three cases, the panelists acknowledged formidable risks — occasionally, as in Derry, near-mortal ones — but even greater benefits that predominated in the end.

The panels and the ensuing discussion deliberately avoided an either/or understanding of the issues. Both the presentations and the later questions and comments were largely aimed at deeper understanding of the essential variables and ways of balancing risk and reward. But afterward, the session was followed by a decidedly more celebratory look at capital grantmaking: an exhibit in Philanthropy House of photographs taken at some of the hundreds of capital projects funded by The Atlantic Philanthropies, a Bermuda-based foundation with a more than 30-year history of grants in seven countries. There, the emphasis was less on complexities than on results, and mostly on the satisfactions of capital projects wisely designed, adequately funded, astutely managed, and put to use in the interest of a stronger and more equitable society.

The ‘Laying Foundations for Change’ exhibit in Philanthropy House in Brussels is open Monday through Friday, 09.00-17.30, until 20 October.

Tony Proscio is associate director at Duke Sanford School of Public Policy.