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Abstract How are developing and what are the promising institutions of social capital formation in rural areas? The purpose of the article is to substantiate the optimal mechanism for the development of community social institutions in terms of assessing the impact of various forms of organization and regulation of the socio-economic relations of this community on the well-being of its members. With the help of comparative studies, we investigated international experience and domestic practice of the formation of formal and informal institutions of communities social capital (more than 800 units for 2015–2018). The system approach provides to develop principles to a level of a model of co-creation-participation management. Using the methods of strategic management, the authors develop alternative strategies for implementing this model for communities of varying potential. Was allowed the basic principles of the institutional arrangement of the most successful communities. It is proved that the formation of "smart" communities of a new type based on participation is an innovative model of multifunctional development of society, which allows to multiply the socio-ecological and economic potential of the territories and improve the life quality of the population.

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