Community ecologists and conservation biologists often work with data that are too sparse for achieving reliable inference with species‐specific approaches. Here we explore the idea of combining species‐specific models into a single hierarchical model. The community component of the model seeks for shared patterns in how the species respond to environmental covariates. We illustrate the modeling framework in the context of logistic regression and presence–absence data, but a similar hierarchical structure could also be used in many other types of applications. We first use simulated data to illustrate that the community component can improve parameterization of species‐specific models especially for rare species, for which the data would be too sparse to be informative alone. We then apply the community model to real data on 500 diatom species to show that it has much greater predictive power than a collection of independent species‐specific models. We use the modeling approach to show that roughly one‐third of distance decay in community similarity can be explained by two variables characterizing water quality, rare species typically preferring nutrient‐poor waters with high pH, and common species showing a more general pattern of resource use.