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Indiana Philanthropy Alliance
© 2013-2018
Indiana Philanthropy Alliance
COMMUNITY FOUNDATION ORIENTATION
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DEFINITION OF A U.S. COMMUNITY FOUNDATION Nonprofit, tax exempt
under section 501(c)3
Independent, non-
sectarian governing body
Publicly supported by
many unrelated donors
Goal of building
permanent component
funds
Benefits the residents of
a defined geographic
area
Supports broad-based
charitable interests
Serves in leadership role
on community issues
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COMMUNITY FOUNDATION HISTORY
1914 - First community foundation established in Cleveland,
Ohio. Within five years, community foundations formed in
Indianapolis, Chicago, Boston, Milwaukee, and Minneapolis
1969 - Tax Reform Act • private foundations more strictly regulated (5% payout)
• community foundation became an attractive option
1976 – Treasury Dept. clarified public charity status of CFs
In the 1990s, financial services firms, such as Schwab, Fidelity
and Vanguard, began to offer donor-advised funds
1990s-today – increasing emphasis on CF role in community
leadership
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GIFT HISTORY
Created by Lilly Endowment in 1990
Establish permanent charitable assets across Indiana
Support local communities and build civic participation
Series of 6 grant phases
Additional programs – Taking Stock, CAPE, SRD, interns
Unique program in community foundation world
Currently Indiana has 74 legal entities covering all counties
All Indiana CFs - Over $3.2 billion in assets
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A commitment to ethical behavior
A welcoming and inclusive environment
A spirit of openness and collaboration
A desire for continuous learning and innovation
Appreciation for geographic boundaries
Celebration of success
October 2016
INDIANA COMMUNITY FOUNDATION CULTURE
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Indiana Community Foundations
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Provided by CF Insights
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Community Foundations – The Really Big Picture
GOVERNING BOARD Goals, Direction, Policy
STAFF Management and Program Implementation
DONORS GIFTS FUNDS INVESTMENTS PAYOUT/
DISTRIBUTIONS
Individuals
Corporations
Private foundations
Charitable
organizations
Cash
Appreciated Securities
Real Estate
Closely held securities
Personal property
Life insurance
Retirement assets
Wills and bequests
Unrestricted
Donor Advised
Field of Interest
Designated
Scholarship
Charitable
Organization
Operating
Supporting
Organizations
Investment Policy
Spending Policy
Grants for charitable
activities
Administrative fees to
support CF operating
budget
Community foundation
ASSETS
Governed by the
FUND
AGREEMENT
FISCAL
RESPONSIBILITY Fulfilling DONOR INTENT
Through this activity, a community foundation gains connections, visibility, knowledge,
credibility, influence and resources to provide COMMUNITY LEADERSHIP
© 2013-2018 Indiana Philanthropy Alliance
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IT’S ALL ABOUT STEWARDSHIP
The careful and responsible management and protection of something considered worth caring for and preserving
What are we “stewarding”? Finances
Relations with donors
Grants
We are all just temporary stewards of an extraordinary community asset.
Ken Gladish, President
Central Indiana Community Foundation, 1994-2000
“ “
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Created by the field
Administered by the National Standards Board
Voluntary; fee for program
Have been in place since 2005
Value Proposition Help define a CF for the public (donors especially)
Provide a “Good Housekeeping” seal of approval
Provide a mechanism for industry self-regulation
Revised National Standards released 2014
New streamlined document submission process
National Standards for Community Foundations
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Permanent endowment building Develop relationships with donors
Invest and protect the principal of gifts
Distribute grants based on charitable intent of the donor
Broad, flexible grantmaking Understand community needs
Re-direct charitable dollars as community needs change
Can be proactive or responsive
Community leader Many different ways to play a leadership role
COMMUNITY FOUNDATION ROLES
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PERMANENT ENDOWMENT
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Long-term rather than immediate
Based on donor interest rather than organization’s
program
Few gifts, generally large, rather than numerous, small
gifts
High use of planned and estate gifts rather than outright
cash or occasionally securities
Often involves whole family rather than just one person
Builds gifts into ever-growing pool of permanent funds
rather than starts over every year
ENDOWMENT BUILDING OR FUNDRAISING?
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Most Charitable
Organizations
Fundraising
vs Community Foundations
Must convince a donor to give to
organization’s specific cause
Offer to assist donor with fulfilling
their charitable wishes or legacy
Annual appeals, continually asking Building long-term relationships
Lots of events Small, intimate gatherings
Small, numerous gifts Larger gifts, especially estate gifts
Relationship management Stewardship and service
Asset Building in Community Foundations
More of an OFFER than an ASK
ASSET BUILDING IN COMMUNITY FOUNDATIONS
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Cash, checks, credit card gifts
Publicly traded stock and mutual funds
Tangible personal property
Agricultural products
Intellectual property (intangible property)
Land
Business Interests • Closely-held and restricted stocks
• Privately-held businesses and S-Corps
• Limited partnerships. LLC
Complex gifts can be great opportunities…Consult an attorney
GIFTS
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Donors are involved in directing how their funds support charitable organizations by establishing one of the following fund types: Unrestricted Fund (or Discretionary Fund)
Field of Interest Fund
Designated Fund
Donor Advised Fund
Discretionary Scholarship Fund
Committee Advised Scholarship Fund
Advised Charitable Organization Fund (a.k.a. Agency Fund)
“Community Project Fund”
Supporting Organization
FUNDS
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A group of individuals determine a solution to a community
need
The group does not have 501(c)(3) status
Use the community foundation for donors to make charitable
gifts
Can be a one-time project or a start-up program
Grants made to vendors for specific charitable purpose or
program
Determine liability issues
Expenditure responsibility required
Community Project Funds (aka fiscal sponsorship)
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GRANTMAKING
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The Community Foundation is knowledgeable about local community resources and needs.
Areas of interest include: Arts and Culture
Civic and Historical Affairs
Community Development
Education
Environment
Health and Human Services
Recreation
BROAD, FLEXIBLE GRANTMAKING
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Program support – to
fund an existing program
or start a new one
Operating – grant for
general operations of a
nonprofit
Capital – buildings,
furnishings or equipment
Capacity-building – to
improve the functioning of
a nonprofit or a
collaborative
Planning or research
Evaluation/assessment –
for one or multiple
organizations
GRANT PURPOSE
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Responsive Grantmaking Community foundation “responds” to community requests
Open process, broad criteria
Keep foundation connected to their community – your R&D
function for new ideas, emerging trends, new talent
It’s a good thing!
Proactive or Strategic Grantmaking Grantmaking with “intentionality”
Can take many different forms
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COMMUNITY LEADERSHIP
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Community foundations have knowledge, connections, influence
and resources that can be used for positive change in a
community, however…
Every community must assess its capacity for leadership before
jumping into this role. It’s time intensive work and reputation and
trust are crucial to success.
Building Blocks of Community Leadership (from CFLeads)
Values, culture and will
Relationships
Resources
Understanding and skills
COMMUNITY LEADERSHIP ROLES & GOALS
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Community Engagement
Examples Participating in community activities and organized by other
groups or institutions
Sponsor a community event or activity
Considerations Easy to do
Everybody wants the CF “at the table” so be cautious about
overextending
Good way to learn about community, forge relationships
Donors and board members can be active connectors
(remember Triple “A” board framework)
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Bridge for Communication
Examples Bring together a few grantees with similar missions to create
relationships
Publish issue briefs on needs, interviews with key nonprofit
leaders on trends
Considerations Fairly easy to do; not much risk
Do a little background work to make sure you are not
walking into some bad history
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Provide a Product or Service
Examples Provide training or other capacity-building opportunity for not-
for-profits
Host a speaker on philanthropy or more specific topic
Considerations Involves additional cost and staff time
More public visibility
Not much risk
Speakers can be a draw for prospects and donors
Be careful about thinking your staff can do capacity-building
– most often best to farm it out
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Proactive/Strategic Grantmaking
Example Allocate a portion of unrestricted grantmaking to a particular
issue, area, need or opportunity
Focus grants on a particular geography or population
Considerations Constructing the “strategy” and defining intended results can
be positive but time-consuming
Moves into a more political arena both internally an externally
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Community Convener
Example Organize a community meeting to discuss an issue or
opportunity
Facilitate peer learning groups to improve knowledge and
skills
Considerations Much more public
Needs considerable preparation to go well
CF will be perceived as having some ability to follow
through on whatever happens
Think about the end game
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Community Initiative
Example CF declares it will address a particular issue
Considerations Enables CF to engage broadly and demonstrate a major “value add”
to the community
Requires significant investment of time and money for which there is
likely no revenue stream - you don’t have to do everything!
Very public; CF reputation can suffer if problem is not “solved”
Possible donor alienation but opportunities for donor to co-lead
Possible political controversy
Community project funds could play a role here
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BOARD MEMBER AND VOLUNTEER RESPONSIBILITIES
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Legally, the board of directors IS the corporation. The
board engages staff to carry out organizational
activities
A board of a community foundation represents the
stakeholders (the community) similar to how the board
of a for-profit company represents the shareholders
(owners)
The board composition should reflect the composition
and diversity of the community
WHAT IS A BOARD?
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Under the laws of most states, board members have these
responsibilities –
Duty of Care A board member must exercise reasonable care when he or she makes a
decision as a director of the organization
Duty of Loyalty A board member must give undivided allegiance when making decisions
affecting the organization. A board member can never use information obtained
as a member for personal gain
Duty of Obedience Board members may not act in a way that is inconsistent with the central goals
of the organization
LAW FOR NONPROFIT BOARDS
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To carry out the vision and mission of the Community
Foundation, with respect to the region it serves
Encourage and responsibly manage charitable dollars
Review, recommend and investigate grants and their
impact
Be guided by good faith and judgment about the best
interest of the Community Foundation with respect to
matters of:
• Decisions regarding investment of assets
• Charitable distributions
• Relationships with donors
• Tax compliance
• Solicitation of new donor funds and assets
BOARD ROLES & RESPONSIBILITIES
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Board members –
Are ideally positioned to build relationships
Provide visibility because of their various
roles in the community
Provide credibility
BOARD ROLES IN ASSET DEVELOPMENT
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TOOLS TO HELP BOARD MEMBERS
Dashboards with key info can help you understand
your community foundation’s activities
Small ‘pocket cheat sheet’ cards with key info about
the community foundation can help ease your
performance anxiety
Rehearsing an elevator speech
Role play
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KNOW YOUR FOUNDATION
Commitment and a little Homework
Dashboards with key info can help you understand
your community foundation’s activities
Small ‘pocket cheat sheet’ cards with key info
about the community foundation can help ease
your performance anxiety
Rehearsing an elevator speech
Role play
Visit with grantees
Visit with donors
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ELEVATOR SPEECH ACTIVITY
Break into three groups
Take 5 minutes to develop an ‘Elevator Speech’ for your community foundation
An elevator speech is a short summary
used to quickly and simply define a person,
profession, product, service, organization or
event and its promise of value to be delivered
and a belief from the customer that value will
be experienced.
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COMMUNITY FOUNDATION INTERNSHIP PROGRAM
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Provide college students with real-life
work experiences in Indiana
To build healthy community foundations
in Indiana
Encourage and develop philanthropy in
Indiana
GOALS
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WORKPLACE ETIQUETTE
Simulation of a real job
Attendance is important
Arrive at work on time
Dress in business attire
Be courteous and professional
Communication with supervisor is key
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COMMUNITY FOUNDATION INTERNSHIP FACEBOOK PAGE
The Executive Director must give the interns approval to join the
group.
Interns may connect to the group page by searching “Indiana CF Interns” or by going to this link: http://www.facebook.com/groups/IndianaCFI/
Interns may join the group through their personal FB account, but profile pictures must be socially appropriate or they will not be accepted.
Interns cannot post anything of a personal nature such as personal information, pictures, video links, documents, etc. Postings may ONLY relate to community foundation specific work in which they are involved.
All postings must have the prior approval of the Executive Director.
The Executive Director must make certain that any materials, videos, etc. are not subject to copy write limitations. If we think there may be an issue, the item will be removed and we will follow-up with the Executive Director.
The group will be administered and monitored by the GIFT staff who may remove any group member or posting at any time.
You may send questions regarding the group page to Belinda Scholl at [email protected] or call 317-630-5200 x129.
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Reporting Requirements:
Community foundation program narrative
Student program narrative (Email/Online) How has your internship experience impacted both the
community and the community foundation?
How did you learn of this internship opportunity?
Was the CFI internship orientation session useful?
How has your experience affected the likelihood that you will:
1. Volunteer in your community in the future
2. Contribute financially to charitable causes
3. Pursue a career in the nonprofit sector
Due 30 days after last day of internship.
Contact Terri Johnson at [email protected] or by phone
317-630-5200 ext. 128 with questions.
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QUESTIONS?