Southeastern Council of Foundations | SECF.org | Volume 26 · Issue 3

48th Annual Meeting Preview THREE DAYS FOCUSED ON THE TRENDS, IDEAS

AND PEOPLE SHAPING PHILANTHROPY’S FUTURE

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Mission: The Southeastern Council of Foundations serves, connects, strengthens & champions philanthropy and the philanthropic infrastructure in the South.

Statement of Intent: The Southeastern Council of Foundations strives to support Members and grantmakers with access to education, resources and networking by serving as a convener and facilitator, offering a diverse range of voices and perspectives. We do not endorse colleague organization views, but rather aim to provide access to a broad range of information and resources to increase grantmaking impact and develop philanthropic leaders throughout the region.

About Inspiration: Inspiration is published four times a year by the Southeastern Council of Foundations (SECF), for the benefit of its Members. The views expressed in Inspiration are not necessarily the views of all SECF Members. We welcome articles, comments and suggestions – please address all communications to SECF’s Marketing & Communications Director, David Miller, at david@secf.org.

Connect with SECF: Visit us on the web and on social media!

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about SECF

table of contents

sectionsLetters to Philanthropy

Notes from the Field

New Members

Southeastern Soundings

Foundation Faces Mark Callaway of the Morning Star Foundation

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featuredGearing Up for a New Approach to GrantmakingA new report from SECF and MDC explores winning strategies for long-term transformation.

Big Changes for Philanthropy Coming With Tax Reform?Proposals could affect investments, endowments and giving.

Challenges Facing Next Gen PhilanthropistsHow should you incorporate the next-gen into your governance structure?

Rewriting the Rule Book on Child Literacy Collaboration and partnership define a community-based approach.

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SECF Staff

Janine Lee President & CEO

Jaci Bertrand Director of Member Engagement

Kevin Brittelle Manager of Creative Design & Multimedia Projects

Dena Chadwick Executive Vice President of Operations

Marianne Gordon, CMP Director of Meeting Planning

Will Kauffman Programs & Partnerships Associate

Tomeka Lee Senior Administrative Assistant/Office Manager

Dwayne Marshall Senior Director of Programs & Partnerships

David Miller Director of Marketing & Communications

Stephen Sherman Research & Database Manager

Board of Trustees

Robert M.Fockler (Chair)Community Foundation of Greater Memphis · Memphis, TN

Rhett Mabry (Past Chair)The Duke Endowment · Charlotte, NC Gilbert Miller (Chair-Elect)Beloco Family Foundation · Columbus, GA

Regan Gruber Moffitt, J.D. (Governance Chair) Winthrop Rockefeller Foundation · Little Rock, AK

Joseph R. Rosier, Jr. (Secretary-Treasurer)The Rapides Foundation · Alexandria, LA

Dr. Leroy Davis (At-Large) Jessie Ball duPont Fund · Jacksonville, FL

Jen Algire (At-Large)The Greater Clark Foundation · Winchester, KY Janine Lee (President & CEO)Southeastern Council of Foundations · Atlanta, GA

Madelyn R. AdamsKaiser Permanente of Georgia · Atlanta, GA

Carol Butler Mike & Gillian Goodrich Foundation · Birmingham, AL

Dr. Stephanie K. Cooper-LewterSisters of Charity of South Carolina Foundation · Columbia, SC

Alfredo A. CruzFoundation for Louisiana, Baton Rouge, LA

Torrey DeKeyserEyeSight Foundation of Alabama, Birmingham, AL

Robert DortchRobins Foundation · Richmond, VA

Roxie JerdeCommunity Foundation of Sarasota County · Sarasota, FL

Pat LummusSartain Lanier Family Foundation · Atlanta, GA

Antoinette M. Malveaux Casey Family Programs · Seattle, WA

Cabot Pyle Dugas/Turner Family Foundations · Nashville, TN

Judge John RochesterMartha Christine White Foundation · Ashland, AL

Marcie SkeltonThe Walker Foundation · Jackson, MS

Claire WebberMay P. and Francis L. Abreu Charitable Trust · Atlanta, GA

Frank J. Wideman, IIIThe Self Family Foundation · Greenwood, SC

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letters to philanthropy

There is no denying that our present circumstances are difficult. But philanthropy has faced dark clouds before. Meanwhile, work has persisted and improved over the course of decades that have been filled with ups and downs.

Janine Lee, President & CEO

Dear Friends,

The novelist Anne Lamott once wrote, “I do not at all understand the mystery of grace – only that it meets us where we are, but does not leave us where it found us.”

When I think about the story of the South – our region – and connect it to the idea of grace, it is a story of hope, economic opportunity, strength and resourcefulness – a South that wants all of its residents to improve their chances for a quality of life.

Change has always been hard. It takes courage and unrelenting determination – especially amid setbacks. What happened in Charlotte-sville this summer felt like a regression to many of us. The public displays of hate and bigotry were disturbing, and made even worse when

Heather Heyer, 32, was murdered when a man affiliated with a hate group drove a vehicle into a crowd of counter-protesters.

Unfortunately, opening the “can of worms” that is Civil War memory brings forward deep emotional arguments because of the war’s continued legacy in our region. The people who brought this deadly display of intolerance into Charlottesville were from all parts of the country, but their actions sparked a controversy that has focused mostly on the American South, where the majority of these statues and monuments were erected.

These challenging times lead to challenging questions. I sometimes ask myself whether the social good that philanthropy is working so hard to build, in collaboration with busi-ness and government, is unraveling. It’s undeni- able that not only in the South, but all across America, anger and polarization are on the rise. We are debating the very definition of truth while disparities continue to mount.

Yet we also see promise and opportunity ahead – if we can build trust and do our part to open hearts and minds to what philanthropy stands for: love of humankind.

When I consider this, three questions come to mind for philanthropy: What do we stand for? What are we willing to fight for? What is at stake?

One of SECF’s core responsibilities is putting the extraordinary work of philanthropy into a Southern context. We believe it is essential to lean into our region’s shared history – good and bad – to own it, to actively identify how we can create solutions to structural barriers that do harm. We do this while embracing the best of our Southern customs and traditions, our unique demographics and strong self-identity.

These factors, combined, guide so much of the work grantmakers undertake as they seek to improve lives and transform communities. We must learn from the past to avoid repeating it in the future.

But, after we learn these lessons, what is philanthropy’s role? While the responses of individual foundations will vary, I know that none of us can remain on the sidelines. These debates are now part of the environment in which grantmakers operate, and there is no sign that they will go away soon.

The environment facing grantmakers is chang-ing in other ways, too – sometimes literally. Hurricanes Harvey, Irma and Maria have caused massive devastation in the South, Puerto Rico and the U.S. Virgin Islands, taking dozens of lives, destroying homes and leaving millions without power.

We know the forces of climate change have warmed our oceans, creating an increasingly fertile environment for these storms. This threat is another that places its heaviest burden on the South, particularly its communities along the Atlantic coast and the Gulf of Mexico.

Here, too, grantmakers face questions. Should philanthropy become more engaged in efforts to combat climate change? Do we need to be more proactive in preparing for such

monstrous disasters? With only so many resources at our disposal, it can be difficult to set some aside for a storm that may never come – yet the devastation we’ve seen from Houston and Florida, not to mention our mem-ories of Hurricane Katrina, are a powerful call to action.

These are only a few of the difficult issues facing Southern Philanthropy. We also face the same issues confronting grantmakers nationwide, and we must be diligent in monitoring and defending philanthropy in an effort to combat legislative proposals that threaten the future of charitable giving.

There is no denying that our present circum-stances are difficult. But philanthropy has faced dark clouds before. Meanwhile, work has persisted and improved over the course of decades that have been filled with ups and downs. After nearly 50 years, we are still here to support and act as a leadership organization on behalf of Southern Philanthropy.

If you’re attending this year’s Annual Meeting, you’ll find that we don’t shy away from these challenges. We’re ready to address them directly. We’re also willing to adapt, promote new strategies and introduce ideas regarding forms of capital to help propel our region and its people forward.

I love the quote that I shared with you at the outset of this letter, “I do not at all understand the mystery of grace – only that it meets us where we are, but does not leave us where it found us.” That’s why I remain confident that we’re ready to charge ahead into the future!

Warmly,

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Gearing Up for a New Approach to GRANTMAKING

For David Dodson, foundations are more than just “funders.”

They are leaders and community conveners who leverage their knowledge and position to advance change. They are experts who understand their communities and the issues they support.

At their very best, foundations go beyond the symptoms of a problem to find its causes — and they doggedly pursue strategies that lead to long-term solutions.

And today — more than at any time in our his-tory— Southern foundations are aggressively and strategically pursuing their work with this spirit.

“We’re in a period of awakening in that our default approach is now no longer that charit- able generosity is the only thing we are capable of doing,” Dodson says. “The times call for us to do more meaningful and deeper things, and it’s happening right before our eyes.”

Dodson, president of the research organization MDC, will spotlight how Southern foundations are adopting this mindset on Nov. 16 at SECF’s 48th Annual Meeting in Orlando, Florida. There, he will unveil a landmark new report Philanthropy as the South’s Passing Gear – Fulfilling the Promise, which explores

how a growing number of foundations in the South are pursuing aggressive strategies to promote justice, equity and change.

In turn, the report offers a roadmap to South-ern foundations that seek to build on these successes.

“We want to talk about the South’s hope, aspir-ations and opportunities and how Southern philanthropy is not only knowledgeable about our challenges and issues but also that it is working to create solutions,” SECF President and CEO Janine Lee said of the report.

Passing Gear Philanthropy DefinedPaul Ylvisaker, the late scholar and foundation adviser, frequently spoke of the notion that philanthropy is society’s “passing gear” — meaning that foundations have the unique power and the capacity to help accelerate change in communities.

With that notion in mind, MDC began working with foundations in 2003 to examine how they could use their resources to advance fairness and opportunities in their communities.

Ten years ago, MDC produced its first public report on Passing Gear philanthropy, which provided Southern foundations with

a blueprint for identifying issues and solving problems. In this initial report, Dodson and his colleagues outlined a process that includes:

• Examining community and regional history for lessons about leadership, change and the role of philanthropy.

• Analyzing data to understand demographic realities, as well as emerging trends and issues.

• Developing strategic priorities that focus on lasting change connected to the foundation’s mission.

The report — and the process it unveiled — became a touchstone for many leaders in Southern philanthropy, including Lee.

“I dog-eared practically the entire report because it has so many important pieces of data,” Lee said. “It provided a call-to-action for Southern philanthropy to work together on these crucial issues.”

Accelerating ChangeToday, foundations across the South are using the Passing Gear approach to help guide work that is transforming their communities and advancing opportunities for those who have previously been marginalized.

By Peter Panepento

SECF, MDC team up on a landmark report looking at how philanthropy

can lead systemic change

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In South Carolina, for example, the Spartan-burg County Foundation has been a leader in a community-wide effort called the Spar-tanburg Academic Movement, which is transforming educational opportunities for children and adults in the region.

Ten years ago, the foundation discovered a troubling trend: Only 19 percent of adults in its community had a bachelor’s degree. That figure put it well behind both the state and national averages for educational attainment — and it served as an indicator for larger economic and workforce development challenges.

The foundation worked with the local cham-ber of commerce and other community institutions to establish the 40-30 Challenge, which aims to have 40 percent of its adult residents hold bachelor’s degrees by the year 2030.

The goal is bold – effectively doubling the number of residents who hold four-year col-lege degrees.

As the foundation and other community organizations began to develop a strategy for achieving the goal, they determined that while college degrees were the ultimate objective, progress wouldn’t come by investing strictly in programs for college-age adults.

It would instead come through programs that supported education at every level – from preschool all the way through college. With that notion as the backdrop, the foundation has since partnered with organizations and government agencies in the community to develop programs and establish benchmarks for children at every level.

Spartanburg County Foundation chief exec-utive Troy Hanna said the foundation has taken its role in the community seriously, committing not only its financial resources, but also serving as a leader and convener and taking aggressive steps to measure results and chart progress.

“As a community foundation, we have the unique ability to convene broadly,” Hanna said. “We can convene and facilitate to look at possible solutions collectively to the issues that are impacting the lives of residents in our community.”

Opportunities for All FoundationsSpartanburg represents just one example of the type of innovative work being led by community foundations across the South.

While community foundations can play a vital role in advancing cutting-edge, community-wide change, they are not alone in embracing the passing gear approach.

For example, the Rapides Foundation, a health conversion foundation, has embraced a disci-plined, data-driven approach to its work to improve the health of residents in central Louisiana.

The foundation enlists researchers, academ-ics, and other experts to help it assess conditions and make recommendations on how it should direct its resources to improve public health. These recommendations have led the foundation to invest in innovative advocacy efforts aimed at curtailing tobacco use and in programs that improve high school graduation rates in its region, since public

health and high school graduation rates are closely correlated.

“We try to be very aligned to our mission,” said Joe Rosier, the Rapides Foundation’s chief executive. “We’re very focused on having outcomes that are measurable and advance that mission.”

A Disciplined ApproachWhile the foundations that are using the Passing Gear mindset are diverse in terms of their size, type, and mission, Dodson said they each have some common traits.

“They aren’t just starting on the immediate,” Dodson says. “They are thinking very deep and long. They are very thoughtful about how to not do more of the same. They look at their practices and say ‘more of the same isn’t going to produce different results.’”

They also approach their work with discipline, focusing very deliberately on collecting data, measuring their impact and adjusting, as needed, to refine their approaches and improve outcomes.

Now, 10 years after his initial report on Passing Gear, Dodson is ready to share a new call-to-action for Southern foundations by showing how the approach is changing communities and offering an updated blueprint for how other foundations can do the same.

“What I want people to see is a heightened appreciation of their own capability to do this type of deep, change-oriented work,” Dodson says. “I hope the diversity of examples shows that regardless of our size, we all have the wherewithal to adapt these mindsets to help our regions become better in a more sustainable way.”

The Rapides Foundation has embraced passing gear principles with a program aimed at improving high school graduation rates that includes professional development efforts aimed at teachers.

Join us at 8:30am on Thursday, November 16, at SECF’s 48th Annual Meeting, where David Dodson will lead a Deep Dive session on MDC’s new report.

ARE YOU READY TO LEARN MORE ABOUT PASSING GEAR PHILANTHROPY?

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TAX REFORM?Big Changes for Philanthropy Coming with

PUBLIC POLICY UPDATE

As Congress heads into fall, tax reform discussions include several proposed mea-sures that may give foundations pause, the biggest of which would treat foundation endowments as taxable shareholders, mean-ing investment earnings would be taxable. Other potential measures include an estate tax repeal, taking the charitable deduction away from 30 million donors, and pushing colleges and university endowments to spend more on scholarships and other financial aid.

Sandra Swirski of Urban Swirski & Associates, LLC, who serves as an advisor to SECF and the Alliance for Charitable Reform, explained these proposed tax changes to SECF mem-bers at a luncheon hosted at The Duke Endowment in Charlotte in August.

Taxing Dividends to Raise RevenueBoth Democrats and Republicans share the goal of spurring economic growth by lowering tax rates and simplifying the tax code, according to Swirski, including lowering tax rates for businesses. But these reductions will likely require lawmakers to pay for those lower rates which could require new revenue of at least $600-$800 billion a year.

“One revenue raising idea put forth by the Senate, known as corporate integration, would provide corporations with deductions for all the dividends they pay, but then tax all shareholders on the dividend income they receive,” said Swirski.

In the United States, tax-exempt organizations hold approximately 80 percent of all equities. This includes charitable foundations, univer-sity endowments and pension systems, all of which could be subject to taxes on dividend earnings under this Senate proposal.

The impact on foundations could be signifi-cant, because taxes on dividends could significantly eat away at foundation investment returns which already are not robust due in part, according to some foundation leaders, to the low interest rate policy of the Federal Reserve.

“A tax on dividends in this investment environ-ment could essentially force some foundations into spend-down mode,” Swirski said.

There is also the possibility that foundations could counter at least a portion of the divi-dend earnings tax with a deduction for grants made.

Eliminating the Estate Tax and Changing Charitable DeductionsInitial tax plans from both the House of Representatives and the White House include elimination of the estate tax, with the House plan taxing some capital gains of over $10 million at death. Senate leaders also favor eliminating the estate tax. Although the details are yet to be decided, Swirski said that reducing the taxes on estates is “very popular with Republicans and likely a part of the plan ultimately presented by Congress.”

Other discussions are circling around the charitable deduction.

Congressional Republicans are contemplating doubling the standard deduction for indi-viduals, which could take the charitable deduction away from approximately 30 million people. That reduction could prove to be a disincentive for charitable giving as people no longer make the connection between giving and tax deductions.

“Doubling the standard deduction would mean only about five percent of those who currently deduct charitable contributions would continue to do so,” said Swirski.

By Betsey Russell

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On the flip side, another idea circulating in the House includes what’s called the “universal charitable deduction” – making the charitable deduction available to anyone, at any income level, who makes a donation of any amount.

“This notion of a ‘universal charitable deduc- tion’ is gaining favor. It is viewed as democ-ratizing philanthropy,” Swirski said. “One member of the House leadership described it as a revolutionary idea.” The obvious downside of this proposal is the sheer cost to the federal Treasury to expand the charitable deduction to all taxpayers.

Stricter Rules on Higher Education EndowmentsWhatever tax plan emerges likely will carry significant implications for college and univer-sity endowments.

“Lawmakers are concerned about the dis- connect between the size of some endow-ments and the increasing cost of college,” said Swirski. “We may see restrictions on the

kinds of tax-exempt gifts that can be made to endowments, with Congress favoring gifts designated for scholarships versus restricted gifts or those for capital improvements.”

Private colleges and universities may also see a 1 percent excise tax on assets in excess of $100,000 per full-time student, a holdover from the Tax Reform Act of 2014.

Potential Carryovers from 2014 Tax Reform EffortsA number of other elements proposed in the Camp Bill may resurface in the 2017 tax discussion. These include:

• Lowering the Adjusted Gross Income caps on charitable deductions

• Limiting the deductibility of contributions of property to basis except for publicly traded stock, qualified conservation contributions, certain research and inventions, and property related to charitable purposes

• A payout requirement on donor-advised funds

• Repealing special charitable deduction provisions for college athletic event seating rights and intellectual property used to generate additional income.

“We’re not sure how many of these will make it into this year’s tax reform plan, but they certainly bear watching,” said Swirski.

Possible Wrenches in the WorksSwirski noted several factors that might dramatically shift and/or prolong the tax reform debate, but the biggest threat according to Swirski is what she calls “the X factor” — or

the unpredictable mega-distraction. (In the weeks since Swirski’s presentation, Hurricane Harvey, rescinding of the “deferred action” policy for undocumented immigrants brought here as children, and escalation with North Korea have all provided examples of the kinds “X factors” that may distract from the tax reform effort.)

What’s Next? More details about tax reform emerged in late September, when the White House and the tax-writing committees in the House and Senate unveiled an outline of a proposal that would double the standard deduction, reduce

the number of tax brackets from seven to three, as well as end the estate tax and the alternative minimum tax. While the plan included few details, it made no mention of changes to the charitable deduction.

SECF released a policy update to members shortly after the announcement and is also scheduled to hold a legislative update webinar on Tuesday, October 17, to discuss the proposal in more detail. Swirski and her team have also provided regular updates on the tax reform debate through “Reading Between the Lines,” a series of blog posts appearing on Engage, SECF’s blog.

SECF is also working to schedule in-district meetings with Southeastern lawmakers dur-ing the month of October and encourages all SECF members to attend. “We spend a lot of time in Washington educating Mem-bers of Congress about the importance of philanthropy, but there is no substitute for Members hearing directly from their constituents,” said Swirski. “In-district meet-ings provide a great opportunity to meet with Members where they are most willing and able

to take the time to learn about the work foun-dations do.”

Swirski also highlighted the value of bringing grantees along to district meetings. “They can talk about how what foundations are doing is working in their communities,” she said.

For more information about in-district meetings, or to access tools and messages to help you plan and conduct a meeting in your area, contact Jaci Bertrand, SECF’s Director of Member Engagement, or visit the Public Policy section of SECF.org.

Mississippi grantmakers met with Sen. Roger Wicker (R-MS, seated far right) to discuss tax reform legislation at this year’s Foundations on the Hill.

This year’s Annual Meeting lineup offers attendees the chance to learn the latest on tax reform and how foundations can make sure their voice is heard in state capitols and Washington. Join us in Orlando to check out these sessions:

• The Role of a Trustee in Public Policy: Aligning Leadership and Advocacy (Wednesday, November 15, 2:15pm)

• Looking Ahead: Tax Reform’s Potential Impact on the Charitable Sector (Wednesday, November 15, 3:45pm)

DIVE INTO PUBLIC POLICY AT THE 2017 ANNUAL MEETING

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“While they are not necessarily more charitably-minded than members of previous generations, the sheer volume of funds, foundations, and other giving among people from high-net-worth families is expanding to unprecedented levels. And the Gen X and Millennial members of those families stand to become the decision-makers for those unprecedented resources over the next several decades.” –Next Gen Donors report (21/64 and the Dorothy A. Johnson Center for Philanthropy)

For private foundations intending to exist in perpetuity, succession is an essential and inevitable discussion. While foundations may have historically waited until a board member’s death to address the transition of decision-making authority, the astute foundations plan for a smooth succession well ahead of time.

While engaged in the succession planning process, it is important to consider how the foundation will be governed twenty, even fifty, years from now, not just five. Well-crafted guidelines that are developed in advance ensure that the succession process is guided by a thoughtful plan rather than personalities or family dynamics.

One challenge foundations often face is how to incorporate the next generation into a foundation’s governance structure. As a family grows in number, it may not be efficient for everyone to be involved. Should there be a process in place to determine who serves on the board? Should the board seats rotate? What about board leadership positions? Should there be standards for board services such as minimum age or exper-ience requirements?

By Emily Patteson, SunTrust Foundations and Endowments Specialty Practice

Challenges Facing Family Foundations andthe Next Generation of Philanthropists

Incorporating the Next Gen into Your Foundation’s Governance Structure

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The following are four examples of succession challenges that foundations often face and successful governance solutions.Issue/Solution Case Studies

Issue: The Adams Foundation determined that equal representation on the board from each family branch is important. How does the Foundation maintain equal representation on the board from each family branch over time? Solution: There is a defined number of voting members on the board with equal representation from each family branch. The representatives are voted on within the branches and serve defined term limits. Issue: How can the Foundation best include interested family members in the Foundation’s work without having an inefficient (large) number of board members?Solution: Any family member over the age of 25 is invited to attend board meetings, participate in board discussions, and make recommendations, even if they do not formally serve on the board.

Issue: How can the Adams Foundation encourage community involvement of its current and future board members?Solution: Personal involvement (time and/or personal giving) is required of board members if a grant does not fit within the Adams Foundation’s mission.

The current members of the Adams Foundation board are 2nd and 3rd generations from the donor. There are only a few members of the 2nd generation who represent four family branches and a large number of members of the 3rd generation. The ages of the 3rd generation span decades.

Case Study 1

Issue: How can the Clark Family Charitable Trust ensure that future generations and spouses are prepared for membership? Solution: All family members and spouses are eligible to be elected to the board after shadowing a current board member for 1 year.

Issue: In what ways can the Clark Family Charitable Trust encourage engagement of its board members with grantees? Solution: Board members “champion” a grant annually and assume responsibility for evaluating and reporting on the grant. They are also expected to demonstrate personal involvement (time and/or personal giving) to grantee organizations.

The original donors of the Clark Family Charitable Trust are still living and value a high level of engagement from family members. Members of this foundation currently include the donor and their children (2nd generation).Case Study 3

• Establishing board member job descriptions detailing meeting attendance requirements, site visit expectations, and other similar responsibilities sets expectations for future generations.

• Consider life stage rather than chronological age when determining whether to set a minimum requirement for board eligibility; the capacity to serve may differ within an age group.

• Setting a defined number of board members with term limits can ensure more family members have the opportunity to participate.

• A children’s board for younger children will encourage early planning and participation in family service projects.

• A senior board (non-voting) can be established to honor ex-officio members.

• Foundation committees may increase engagement in the foundation’s work and use members’ differing areas of expertise. Committees might focus on grantmaking, investments, family unity or volunteering.

Other Solutions to Consider

Issue: How does the Foundation maintain an efficient and manageable board with such a large number of interested family members? Solution: The Voting Board of the Davis Family Foundation consists of a defined number of lineal descendants with set term limits. The Board is responsible for electing new members.

Issue: Is there a way to include non- lineal descendants in the Foundation’s work without adding them to the Voting Board? Solution: The Davis Family Foundation established an Advisory Board that may include spouses and must include a defined percentage of non-family members (i.e. community leaders). The number of members and term limits are defined. Members are elected by the board.

Issue: Even with defined numbers, the Davis Family Foundation’s boards are large. How can the Foundation ensure there is a place for participation for all those interested?Solution: The Foundation established committees to focus on different aspects of the Foundation’s work. Potential new members can shadow a committee before being elected to the Board or Advisory Board.

The current members of the Davis Family Foundation include 2nd and 3rd generations. The donor of the Foundation has a very large family spanning a wide range of ages.Case Study 4

Issue: Since 3rd generation voting board members are not named in the governing document, how does the Foundation address succession planning for the current and future generations? Solution: The Voting Board of the Brown Family Foundation consists of a defined range of number of voting members, who may name one lineal descendant as a successor or multiple lineal descendants with rotating 2 year terms.

Issue: How can the Brown Family Foundation best include family members and spouses not on the board? Solution: An Advisory Board was established and is given a grant budget to recommend distributions to the board. There are an unlimited number of members and two officers from the Advisory Board serve on the Board.

Issue: How can the Foundation engage future generations in its somewhat narrow mission?Solution: A discretionary grant budget is given to each family branch to accommodate individual interests.

Case Study 2The members of the Brown Family Foundation currently include the donor and their children (2nd generation) and grandchildren (3rd generation). Spouses are also included as board members. The Foundation’s governing document defines by name the donor and 2nd generation who all serve on the board during their lifetime.

About SunTrust Foundations and Endowments Specialty PracticeSunTrust has nearly a century of experience working with not-for-profit organizations. Fiduciary stewardship is the heart of our culture. We are not merely a provider for our clients; we are an invested partner sharing responsibility for prudent management of not-for-profit assets. Our client commitment, not-for-profit experience and fiduciary culture are significant advantages for our clients and set us apart from our competition. The Foundations and Endowments Specialty Practice works exclusively with not-for- profit organizations. Our institutional teams include professionals with extensive not-for-profit expertise. These professionals are actively engaged in the not-for profit community and are able to share best practices that are meaningful to their clients. Team members offer guidance and advice tailored to the various subsets of the not-for-profit community, including trade associations and membership organizations. Our Practice delivers comprehensive investment advisory, administration, planned giving, custody, trust and fiduciary services to over 700 not-for-profit organizations. We administer $32.1 billion in assets for trade associations, educational institutions, foundations, endowments and other not-for profit clients.

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Rewriting the Rule Book onCHILD LITERACYCampaign for Grade-Level Reading requires foundations

to embrace partnerships and collaboration.By Betsey Russell

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It’s a fact no one would dispute: Every child should be able to read on grade level when he or she begins third grade. That’s when “learning to read” shifts into “reading to learn.”

Yet 67 percent of children nationwide don’t achieve this benchmark. For low-income families, that number soars to 80 percent. Children who don’t master third-grade read-ing levels on time are less likely to secure a high school diploma and more likely to enter the criminal justice system.

The circumstances that contribute to this lack of achievement are many, and often have little to do with a child’s elementary school teachers. Instead, factors such as lack of early childhood education, poor school attendance because of homelessness or family transience, and loss of literacy skills over long, empty summers all have deep effects on a child’s ability to learn to read and to continue to hone his or her skills.

Fortunately, the national Campaign for Grade Level Reading (CGLR) gives funders a way to tackle the challenge of grade-level reading in ways that are designed by and tailored to the needs of their own communities.

Created in 2011, the CGLR provides a system-atic framework for local funders, businesses, government agencies, schools, nonprofits, families and others to work together to ensure all children can read at grade level by the end of third grade. CGLR is not a one-size-fits-all model or program, but an organizing tool that helps communities identify their own needs and potential solutions and align their resources accordingly.

Nearly 350 communities across the country have become part of CGLR, including more than 100 in the Southeast, and the number continues to grow.

Bringing a National Movement to Ground at HomeThe Patterson Foundation (TPF) in Sarasota, Florida, recognized the promise of CGLR in 2011 and became an early supporter.

“As economist James Heckman proved, every $1 invested in early childhood development returns more than $7 social and economic benefits. We know that investing in early reading helps our community thrive,” said TPF President Debra Jacobs. “We always look for alignment of leadership, willingness, readiness, capacity and culture – and we found it with the national campaign.”

TPF provided funding for CGLR at the national level, including the creation of an online “Huddle” where communities can share and download information, and an annual “Funder Huddle” gathering where foundations and other supporters can exchange learning, successes and ideas face-to-face.

Shortly thereafter, TPF introduced CGLR to another local philanthropy, the Community Foundation of Sarasota County.

“We had been making investments in several literacy initiatives for grades K-8, but realized we needed to hone our focus to better measure outcomes,” says John Annis, Senior Vice President of Community Investment at the Community Foundation of Sarasota County. “TPF took me as their guest to the first national CGLR meeting, and I was hooked.”

Annis brought information about GCLR back to Community Foundation President and CEO Roxie Jerde, who then presented it to the board. The board then convened an 18-month task force to research the issue and meet with members of the community, including teachers, social workers, parents and kids. Ultimately, the board decided to make CGLR a focus of its education funding through 2020.

CGLR asks communities to consider several components that contribute to grade-level reading, including school readiness, chronic absenteeism, summer learning, parent engagement and health. Communities can address one or all of those areas and must create a Community Solutions Action Plan to be considered part of the Campaign. Plans must engage multiple partners in building a community movement. With the Community Foundation of Sarasota County as a lead partner, the Sarasota County campaign began in 2012 with an initial focus on school readiness and summer learning in the area’s four highest-need schools. When a new superintendent arrived in [YEAR], the work expanded to focus on all CGLR components in those four schools.

In 2013, neighboring Manatee County also decided to join GCLR, but honed in specifically on curbing absenteeism. The county’s United Way and school system became lead partners, dedicating a portion of the district’s Title 1 funding to place “graduation enhancement technicians” in every school.

The two neighboring campaigns created a unique challenge — and an opportunity for TPF to step up its own investment.

“Because Manatee and Sarasota counties share media markets, local media outlets were reporting on two separate initiatives. That became confusing,” said Beth Duda, director of the Suncoast Campaign for Grade Level Reading at TPF.

TPF led a community effort to create the Suncoast Campaign in 2015 to help clarify, strengthen and expand the work of CGLR beyond the four initial schools in Sarasota County and beyond the single focus area in Manatee County. Both counties still focus on work that is most relevant to them, but TPF’s investment helps expand work that applies to both counties.

For example, TPF supported a region-wide attendance poster contest in which 44,000

kids participated. Each school chose its own winner, and TPF provided framed copies of the winning posters for the schools and the winners’ families and hosted celebratory events in each county to honor the winners.

“A collaboration of this scale is not always easy, but it’s well worth the extra effort,” said Annis. “As our president and CEO, Roxie Jerde, often says, ‘All of us are smarter than one of us.’ We learn from each other and have the opportunity to brainstorm, question, critique, and replicate if appropriate. Because TPF is working ‘wide’ with the regional rollout, management, and reporting on the two-county efforts, we can keep working ‘deep’ in those four high-need schools in Sarasota County.”

The community foundation’s investment has included the creation of a summer learning academy at one elementary school that ultimately increased third-grade-level reading proficiency from 50 percent to 70 percent over three years. That program has since been adopted and replicated by the school district. Region wide, since the Suncoast Campaign began, both school districts have seen increases in the numbers of students reading proficiently by end of third grade. They’ve also seen decreases in chronic absenteeism.

Be sure to attend the Wednesday afternoon plenary, Celebrating Innovative Philanthropy in the South, at the SECF Annual Meeting on November 15. It features Ralph Smith, managing director of the national Campaign for Grade Level Reading and John Annis, Senior Vice President of Community Investment at the Community Foundation of Sarasota County, who will highlight their experiences with CGLR. Register at SECF.org.

WANT TO LEARN MORE?

· 11 ·

Spreading Region WideSeveral cities are busy putting their star on the CGLR map

• In Memphis, Tennessee, CGLR has become part of Seeding Success, a collective impact effort to ensure that every child graduates from high school prepared for success in college, career and life. (Tennessee also has a separate statewide reading program, Read to Be Ready, launched by Gov. Haslam in 2016.)

• In Louisville, Kentucky, the Ready for K Alliance brings more than 100 partners together as part of CGLR, and earned a national Pacesetter Award from CGLR in 2016 for reporting population-level, measurable progress in school readiness for children from low-income families.

• The Richland County Library System is the lead partner for the CGLR in Columbia, South Carolina.

• A design team in New Orleans, Louisiana, is developing a Community Solutions Action Plan.

Creating a Statewide CampaignArkansas and Georgia are both recognized by the national CGLR for their statewide campaigns. The Arkansas Campaign, sup- ported by the Winthrop Rockefeller Foun-dation and the Arkansas Community Foundation, includes hundreds of partners and addresses all four pillars of the Campaign (school readiness, parent engagement, attendance and summer learning). In Georgia,

Governor Nathan Deal and his wife, Sandra, spearhead the Get Georgia Reading cam-paign, a coalition of hundreds of public and private sector leaders who align their work and support to get all Georgia kids on a path to reading proficiency.

In Mississippi, the design and implemen-tation of the statewide effort was led by the Mississippi Association of Grantmakers (MAG),

and supported by a public-private partnership that includes the State Department of Education, the Center for Excellence in Literacy Instruction at the University of Mississippi, The Phil Hardin Foundation, the Community Foundation of Northwest Missi-ssippi, the Community Foundation of Greater Jackson and others.

“We had state legislation mandating third-grade reading proficiency and a new state

superintendent of education who was very interested in the issue,” said Sammy Moon, MAG’s director. “We wanted to look at the role philanthropy could play in addressing statewide issues.”

In response, MAG connected with a vari-ety of public officials, Ralph Smith, the managing director of CGLR, and Dr. Sherece West-Scantlebury, president and CEO of the Winthrop Rockefeller Foundation in neigh-

boring Arkansas, who has been a leader in implementing CGLR in that state.

“We realized that Mississippi had the policy, and we had the K-12 system to implement it. What was missing was the local piece,” said Moon.

After several months of member exploration and planning, in 2016 MAG, along with the State Department of Education and the Center for Excellence in Literacy Instruction, created the Mississippi Campaign for Grade Level Reading, a statewide public/private venture that put all the pieces together. The state’s department of education provides staffing for the effort. The University of Mississippi provides supervision, office space and operational support. MAG members provide funds for community implementation through a pooled fund that MAG administers.

“Our pooled fund is the first time this many funders in the state have pooled unrestricted funds in this way,” said Moon. “It sets the precedent for the kinds of things we can do together as funders and partners with the public sector.”

The Phil Hardin Foundation in Meridian, Mississippi, served as a lead donor for the fund, pledging $50,000 per year for three years in exchange for a $25,000 match from other funders.

“We liked the idea of helping communities develop their own plans and collaborative efforts,” said Lloyd Gray, the foundation’s executive director. “We also liked the idea of collaboration among the giving community in our state, and being able to put some money out there as a stimulus for others to set their own stake in this was particularly attractive.”

Other states, including North Carolina, Virginia, Alabama and Florida also are ramping up CGLR communities with statewide campaigns. North Carolina currently has nine recognized CGLR sites, Virginia eight, Alabama three, and Florida 16.

The Suncoast Campaign, along with Delray Beach, Florida and Springdale, Arkansas, were recognized by CGLR as “All American Cities” in 2017 for their levels of civic engagement. Twelve Southeastern communities were recog- nized as “Pacesetters” for leading by example to address one or more of the CGLR pillars.

“If you look at the issue, where up to 80 percent of low-income kids aren’t reading at third-grade level, you realize that no single agency or entity can address it on their own,” said TPF’s Duda. “CGLR provides a structure that avoids placing blame and creates awareness of reading proficiency as a community issue. Plus, it provides ways for a community to identify its own aspirations and find parts for everyone to play. In the end, you get a more supportive culture for children and families, which ultimately makes the community stronger and more sustainable.”

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new members of the SECF familyThe following organizations have joined or reconnected with SECF since our previous issue. Look forward to seeing them at our events and programs – and give them a warm welcome!

SECF is proud to welcome Carl and Lula Ballton as its first philanthropic individual members! The Balltons recently moved to the Atlanta area, where their three children reside, from Los Angeles. Previously, Carl Ballton served as senior vice president within the Corporate Social Responsibility group of Union Bank. He also served as president and chief operating officer of the Union Bank Foundation. Dr. Lula Ballton previously led the West Angeles Community Development Corporation as president and CEO and was an appointed commissioner on the Community Redevelopment Agency of the City of Los Angeles. Their giving is focused on churches and nonprofits in the Los Angeles and Atlanta areas.

The Asbury Foundation of Hattiesburg, a health legacy foundation based in Hattiesburg, Mississippi, has reconnected with SECF. It focuses its grantmaking on economic development, education, health, human services, religion and youth development in and around Hattiesburg.

The Central Carolina Community Foundation, based in Columbia, South Carolina, is focused on serving 11 counties in the Midlands region of the Palmetto State. JoAnn M. Turnquist is the foundation’s president and CEO; C. Carroll Heyward chairs the Board of Trustees.

The Community Foundation of Louisville has reconnected with SECF. With giving focused in Kentucky and southern Indiana, the foundation manages more than 1,450 charitable funds. Susan A. Barry, JD, is the president and Eric W. Taylor is the board chair.

The Humann Family Foundation, based in Atlanta, is a family foundation set to begin grantmaking next year, with a focus on community improvement, education, health, medical research, mental health and social sciences.

Invesco, the investment management company headquartered in Atlanta, operates a giving program focused on financial literacy.

The J.H. Walker Legacy Foundation is a family foundation based in Mount Pleasant, South Carolina. Its grantmaking is directed toward education and health.

The Keenan Family Foundation, based in Alpharetta, Georgia, is focused on funding education. Bruce Keenan is the foundation president.

Based in Pinehurst, North Carolina, the Palmer Foundation is a family foundation focused on education, human services and international relations. Penny Enroth is the president.

Do you have news about your foundation that you’d like to share?

Send your stories to David Miller, Director of Marketing & Communications, at david@secf.org.notes from the fieldSouthern Philanthropy Responds to Hurricanes Harvey and Irma After Hurricane Harvey devastated parts of Louisiana and Texas – particularly the Houston area – multiple foundations in the region began efforts to support relief and recovery. The Patterson Foundation donated $250,000, The Arthur M. Blank Family Foundation announced a match of up to $1 million in donations to the Red Cross, the Community Foundation of Middle Tennessee launched a recovery fund and the Greater New Orleans Foundation reactivated its Pay It Forward Fund.

A similar response took hold as Hurricane Irma hit the region directly, making landfall in Florida. SECF members launching support efforts included the Community Foundation of Sarasota County, the Community Foundation of Tampa Bay, the Florida Bar Foundation, the Community Foundation for Northeast Florida and the Jessie Ball duPont Fund.

Foundation for a Healthy Kentucky and Partners Release Report on Health Disparities in AppalachiaA report commissioned by the Foundation for a Healthy Kentucky, the Appalachian Regional Commission and the Robert Wood Johnson Foundation found significant health disparities facing people in the Appalachian region.

The region was behind the rest of the country in 33 out of 41 population health indicators, particularly drug overdoses, which were 37 percent higher than the rest of the country – a fact largely attributed to the growing opioid epidemic.

Central Appalachia, which includes all of eastern Kentucky and parts of Virginia and Tennessee, fared worse than the rest of the region. Overall, premature deaths cost Central Appalachia residents more than 11,200 years of life between 2011 and 2013 alone.

“I think it’s a wakeup call,” said Ben Chandler, president and CEO of the Foundation for a Healthy Kentucky.

The full report is available at the Appalachian Regional Commission’s website, ARC.gov.

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In June, Mason Rummel was named CEO of the James Graham Brown Foundation in Louisville, Kentucky. She also remains the foundation’s president. She took over the CEO role from Alex Rankin, who remains chair of the foundation’s board.

In August, the Marion County Healthcare Foundation in Mullins, South Carolina, named Pete Mazzaroni executive director. He previously held multiple leadership roles in public relations and community affairs over 25 years at Roche, the global pharmaceutical company.

The Greater New Orleans Foundation announced in June that Christian Brown has been elected board chairman. He is the founder and managing director of NOLA Holdings, LLC, a private equity investment firm.

Hollingsworth Funds in Greenville, South Carolina, has hired Katy Sides as associate of strategic initiatives. She previously served as vice president of finance and operations for the Institute for Child Success.

Mark Croswell recently joined the Community Foundation for Greater Atlanta as Managing Director, Social Impact Strategy. A Hull Fellows alumnus, he is also a trustee of R. Howard Dobbs, Jr. Foundation.

The South Carolina Bar Foundation in Columbia has named J. René Josey, an attorney at Turner Padget Graham & Laney P.A. in Florence, South Carolina, as board president.

The Z. Smith Reynolds Foundation announced the hiring of two program officers. Tania Durán comes to the foundation after working as North Carolina program manager for Hispanics in Philanthropy. Sorien Schmidt previously served as North Carolina state director for Enroll America.

Laila Bell has joined The Duke Endowment as associate director of learning and evaluation. She previously worked as director of research and data at NC Child, a statewide nonprofit.

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· 14 ·

Mark CallawayPresident & CEO, Morning Star Foundation

This year’s Annual Meeting features not one, but three sessions on impact investing. The driving force behind these sessions has been Mark Callaway, who serves as both president and a trustee at the Morning Star Foundation. He spoke to SECF about the session lineup and why impact investing is so important.

This year’s Annual Meeting agenda includes a big focus on impact investing. Can you walk us through the various sessions?

After positive feedback from our introductory session at last year’s Annual Meeting, we see that the appetite for impact investing is taking off. We have planned three sessions this year that focus on impact investing: two panels for staff and trustees and a breakfast Deep Dive session we’re calling “Don’t Confuse the Fringe with the Frontier.” Each of our panels has leaders with extensive experience incorporating impact investing on either the foundation side or the professional money management side, and in some cases both. We hope these sessions will help foundations learn how to unlock the other 95 percent of endowments to further their missions and create even greater impact

Why is there a need for different sessions for trustees and staff? How are their perspectives on this different?

Overall, we are looking to get the same message across to both panels: Impact investing can grow your endowment while furthering the mission of your foundation. The difference between these two sessions caters to what matters to staff versus trustee members when jumping into impact investing.

For the trustee session, we are emphasizing the importance of adopting this investing style. Millennials are demanding it, assets in the space are growing, and it is a great way for foundations to expand their impact multi-fold. The staff session goes more into implementation strategies, both basic and next level, to bring back to a foundation and incorporate.

What can we expect from the Deep Dive session on impact investing?

We have an incredible group of leaders in the impact investing space who are going to share their views on the importance of impact investing and how to integrate it into investments. We want to make this session engaging by using live polling to better understand where people are in the process and guide them in the next steps to take toward impact and alignment. We think this message is particularly timely, since the ways to incorporate impact into investments is growing at an unprecedented pace. The frontier has arrived, and now is the time to embrace the change that will come as this investment approach continues to move into the mainstream.

This subject is one that means a lot to you – how did you get involved in this movement and why should other funders join you?

The decision to move into the Impact space was actually fueled by a combination of events that all came to a head for me in 2001. The markets were moving down as the dot-com bubble came to an end. There were accounting issues with big publically traded companies. There were research analysts writing positive research reports to get their kids into prestigious kindergartens in New York. All of this was going on – and then 9/11. All of this had its effect on me, and I decided that I didn’t want to manage client assets in a traditional way any longer. At the same time, the Socially Responsible Investment movement was gaining momentum. So, I started embracing that movement and have been a part of it for the last 16 years. Over this time, it has morphed into the Environmental, Social and Governance (ESG) Screening and Scoring and now the Sustainable, Responsible and Impact Investing movement. This movement incorporates both a market rate return with environmental and social impact, and has grown very quickly over the last 10 years. The next generation of trustees expects assets to be screened for their direct impact. I have said before that I believe in 3-5 years, all investments will be screened for their ESG score, and for those that manage assets in a fiduciary setting will be required to understand the sustainability of their investments.

foundation faces

Please visit SECF.org for additonal Annual Meeting details

2017 Annual Meeting preconferences

Conference on Investing · 8:00am–1:30pmGather with peers and experts to learn about market trends, geopolitical dynamics that are influencing the global economy, new investment strategies and how foundations are maximizing returns and which tools and approaches will help simply the demands of fiduciary governance. ($150 member rate, includes breakfast and lunch) NEW! Education Preconference Summit · 9:00am–12:00pmSECF’s own research shows that education is the largest giving category for Southeastern foundations – and many funders believe it’s the biggest challenge facing our region. During this preconference, you’ll hear from a lineup of experts and thought leaders as you learn what works, the latest successes and how to make your education grantmaking strategy even more effective. ($50 fee for optional lunch afterward) 

NEW! Philanthropy & Disasters: What’s the Right Role? · 9:30am–11:15amJoin Bob Ottenhoff of the Center for Disaster Philanthropy for this roll-up-your-sleeves session. We will focus on best practices in disaster philanthropy as well as practically defining how you and your company can best prepare for and respond to disaster needs. (Complimentary lunch follows session)

 NEW! Family Foundations Day: My Gen/Your Gen · 9:30am–11:30amThis workshop, led by Richard Marker of Wise Philanthropy, is built around the realities of intergenerational family philanthropy today. This session goes beyond the typical approach of simply defining the characteristics of each generation and explores the dynamics between and among them to enhance your family decision-making. ($50 fee for optional lunch afterward) 

Community Foundations Day: Building Leadership Capacity to Strengthen Communities · 9:30am–11:15amJoin Deborah Ellwood of CFLeads to learn more about how community foundations can be more effective community leaders. Participants will work with colleagues to assess their community leadership capacity in this highly interactive session. (Complimentary lunch follows session)

 

Trustees-Only Luncheon: How Will Trustees Lead Into the Future? · 11:30am–12:30pmGlobal philanthropy advisor Kris Putnam-Walkerly will lead a spirited and provocative conversation about the roles of foundation trustees in the face of change. You will also hear the thoughts of veteran trustees and rising stars, and discuss your own ideas with trustee peers in this trustees-only confidential gathering. ($50)

Get an early start on your Annual Meeting experience by attending one of our preconference sessions! You can register today at SECF.org! All preconference sessions are held on Tuesday, November 14. Some additional charges may apply.

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