CATALYZING NONPROFIT COLLABORATION A Report on the Community Catalyst Fund

Charlotte, North Carolina – March 2012

Prepared by Anne Findlay Vail on behalf of the Community Catalyst Fund with support from:

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Table of Contents

EXECUTIVE SUMMARY ............................................................................................................................. 2 WHERE CHALLENGE MEETS OPPORTUNITY .......................................................................................................... 2 LESSONS LEARNED .......................................................................................................................................... 3 SIGNIFICANT OUTCOMES .................................................................................................................................. 4

HISTORY & CONTEXT ................................................................................................................................ 5

FUNDING ................................................................................................................................................. 9

INVESTMENTS ........................................................................................................................................ 10 STUDY OF CHARLOTTE’S NONPROFIT LANDSCAPE ................................................................................................ 10 OUTREACH & EDUCATION .............................................................................................................................. 13

Nonprofit Summits & Collaboration Conferences ............................................................................... 13 Cohort Groups ..................................................................................................................................... 14 Cultivating Local Professional Resources ............................................................................................ 15

EVOLUTION OF AN INVESTMENT STRATEGY ........................................................................................................ 16 CATALYST-INITIATED INVESTMENTS .................................................................................................................. 19

MSO Task Force ................................................................................................................................... 20 Out of School Time Task Force ............................................................................................................ 24

GRANTS AWARDED TO DATE .......................................................................................................................... 28 ADA JENKINS CENTER .......................................................................................................................... 30 ARTS & SCIENCE COUNCIL ................................................................................................................... 31 BLUMENTHAL PERFORMING ARTS CENTER AND ASC ......................................................................... 31 CHARLOTTE-MECKLENBURG COALITON FOR HOUSING ...................................................................... 32 CHARLOTTE FAMILY HOUSING ............................................................................................................ 32 CHARLOTTE MECKLENBURG LIBRARY ................................................................................................. 33 CHILDREN & FAMILY SERVICES CENTER .............................................................................................. 34 CHILDREN’S HOME SOCIETY/YOUTH HOMES ...................................................................................... 34 CITY OF CHARLOTTE/MECKLENBURG COUNTY CONSOLIDATION ....................................................... 35 COUNCIL FOR CHILDREN’S RIGHTS ...................................................................................................... 36 CRISIS ASSISTANCE .............................................................................................................................. 36 GOODWILL INDUSTRIES, INC. .............................................................................................................. 37 HABITAT FOR HUMANITY .................................................................................................................... 38 LEGAL SERVICES OF SOUTHERN PIEDMONT ....................................................................................... 39 MECKLENBURG COUNTY ..................................................................................................................... 40 MEN’S SHELTER OF CHARLOTTE .......................................................................................................... 41 MULTI-FAITH HOUSING INITIATIVE ..................................................................................................... 42 NPOWER ............................................................................................................................................. 43 OPERA CAROLINA/CLT SYMPHONY/NC DANCE THEATRE ................................................................... 44

LESSONS LEARNED ................................................................................................................................. 46 CCF “WALKS THE WALK” OF COLLABORATION ................................................................................................... 46 FUNDING COLLABORATION INVOLVES RISKS & SURPRISES ..................................................................................... 47 CHANGING MINDSETS TAKES TIME .................................................................................................................. 48 TRUE COLLABORATION CAN BE ELUSIVE ............................................................................................................ 49

CONCLUSIONS ........................................................................................................................................ 50

BIBLIOGRAPHY OF CCF RESOURCES ........................................................................................................ 51

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EXECUTIVE SUMMARY Where Challenge Meets Opportunity Charlotte, North Carolina is a city well known for its “can do” spirit. Through the years the city has harnessed this ambitious energy to become the nation’s second largest banking center; a major transportation hub; home to both a NFL and NBA franchise; and a cultural destination point featuring numerous museums and distinguished performing arts organizations.

The global financial crisis that began in 2008 dramatically altered the economic and social landscape of the Charlotte community in innumerable ways. Banktown USA lost one of its major corporate headquarters with the merger of Wachovia and Wells Fargo; unemployment climbed rapidly to double digits; and virtually all other economic indicators dipped to extraordinarily low levels. The nonprofit sector in particular experienced a remarkable increase in demand for services, as well as a concurrent and significant drop in revenues as corporate philanthropy and foundation giving declined, governmental budgets were drastically cut, and individual donors tightened their belts.

In the face of an economic crisis unparalleled since the Great Depression, the Charlotte community saw challenges, but also opportunities. In September 2009, a coordinated community effort that included input from corporate executives, foundation leaders, philanthropists, nonprofit organizations, as well as government and civic representatives culminated in the establishment of the Community Catalyst Fund (CCF).1 CCF is an ongoing initiative that is dedicated to providing the nonprofit sector with support for strategic transformations, including innovative service models, collaborations, partnerships and mergers. The intention of the Catalyst program is to enable nonprofit organizations to reposition themselves to meet a future characterized by increased demands for services and diminished funding. This report begins with a look back at the history and context from which CCF emerged, and details the funding structure of the Catalyst program as well as the investments made to date. A particular focus of the report is the first significant CCF investment: a groundbreaking study of the nonprofit landscape in Charlotte. The study continues to inform the actions of CCF two years later, and will serve as a valuable resource to funders and agencies alike in the future. Other aspects of CCF investments are also outlined:

Outreach efforts to get the word out about the Catalyst Fund, as well as educate the community about strategic restructuring in the nonprofit arena

The evolution of CCF’s investment strategy in an effort to better attract catalyzing opportunities

CCF-initiated investments Grants

1 Foundation For The Carolinas administers the Community Catalyst Fund at no cost.

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Among the goals of this report is to evaluate and reflect on CCF activities, investments and lessons learned in order to gain a clearer perspective on the program’s impact, as well as provide a guide for future activities in the Charlotte region (and elsewhere) aimed at the long-term sustainability of the nonprofit sector.

If Catalyst Fund participants were asked to identify one enduring theme of their experience, the most common response would likely be to expect the unexpected and be prepared to adapt accordingly. All of the lessons learned reflect this sentiment to one extent or another.

1. CCF “walks the walk” of collaboration. The committee represents an entirely new type of grantmaking body in the Charlotte community. CCF itself is an innovative collaboration among a diverse body of funders and thought leaders, as well as for the staff involved in administering the initiative. All involved with CCF have found that success depends upon utilizing the very same conventions that the grantees follow in working collaboratively: mission focus, flexibility, outcome clarity, trusting relationships, and a willingness to take risks.

2. Funding collaboration involves risks and surprises. Any evaluation of Community Catalyst Fund must include a reminder that the roots of the program lie in the unpredictable and high-risk world of venture capital. The foundational concept of “angel investors” – providing seed money to fund innovative projects – is necessarily a proposition laden with unknowns. Some innovations will be hits, others will be misses, and some will produce unexpected, even surprising results. Gauging success in the Catalyst world requires both a broad and long-term view.

3. Changing mindsets takes time. Outreach and education work was an early priority

and funding focus of the Catalyst program. As a result of numerous investments of time and money towards outreach, CCF has created a new vocabulary in Charlotte. Despite the fresh lexicon in the community, CCF experienced disappointment resulting from divergent definitions of collaborative terminology among funders and nonprofits; the focus on “keeping the lights on” in some sectors that seemed to preclude innovative thinking; inconsistent leadership levels in nonprofit board rooms; and the relative lack of catalyzing opportunities that resulted from the early grant application process.

4. True collaboration can be elusive. Intimately related to the difficulty of changing

mindsets is the fact that attracting compelling projects has proven to be much more difficult than anticipated. Even after CCF outreach efforts and the revision of the grantmaking strategy over time in an attempt to better communicate and define true collaboration, the “big ideas” continue to be few and far between. For this reason, CCF decided in June 2011 to turn the gaze inward to permit greater committee member input into developing catalyzing concepts. This more proactive method resulted in several additional valuable investment opportunities occurring at the end of 2011, and will form the basis for future CCF funding.

Lessons Learned

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The Community Catalyst program began in a time of crisis, great uncertainty and fear. The initial actions of CCF were – in many respects – reactions, rather than proactive responses to the new reality. Over time, the Catalyst program evolved and adapted to better address the long-term needs of the nonprofit community. A look back to the beginning of the Community Catalyst program provides the opportunity to more clearly appreciate the significant outcomes of CCF investments to date:

CCF’s first significant investment – the 2009 study of the nonprofit landscape – continues to benefit the community and inform the actions of CCF through the identification of collaborative opportunities.

Nonprofits and funders are increasingly speaking the same language as they navigate through the continuing rough economic environment.

The emergence of an investor mindset among funders and willingness to take risks as well as expect surprises.

Participants acknowledge a less prescriptive and more interactive engagement between grantees and funders.

CCF grants have directly shaped the merger of eight nonprofits into three new organizations and others may follow.

Several Catalyst investments have the potential to inspire sector-changing innovations. The program has been the primary investor and catalyst for collaboration in several

projects that would not have occurred, but for the existence of the program. CCF investments serve as leverage points for additional funding from non-CCF sources

to grantees. CCF has become a national model for similar efforts in Boston, Minnesota, Florida,

Arizona, San Francisco, Cleveland and New York. An evolving emphasis on documenting CCF investment outcomes has resulted in a

library of best practice maps and other permanent resources that will continue to guide nonprofit collaborations beyond the life of CCF.2

Charlotte is a community in which “no challenge is wasted”. CCF represents a new philanthropic model for funding nonprofit innovation. But for the economic crisis, the community may not have pursued this course. The effort has not been simple, but the lessons learned and the accomplishments achieved will benefit the Charlotte region – and potentially other communities – for years to come.

2 A bibliography of publically available CCF resources is included at the end of this publication.

Significant Outcomes

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HISTORY & CONTEXT

The Community Catalyst Fund (CCF) is an ongoing initiative in Charlotte, North Carolina that is dedicated to providing the nonprofit sector with support for strategic transformations, including innovative service models, collaborations, partnerships and mergers. The intention of the Catalyst program is to enable nonprofit organizations to reposition themselves to meet a future characterized by increased demands for services and diminished funding. Established in September 2009, CCF was the result of a coordinated community effort to address the unprecedented impact of the economic downturn on the nonprofit sector. CCF committee members represent many of the community’s major funders; thought leaders denoting a broad range of experiences; and a partnership of the Arts and Science Council (ASC), United Way of Central Carolinas (UWCC), and Foundation For The Carolinas3 (FFTC).

The global financial crisis that began in 2008 dramatically altered the economic and social landscape of the Charlotte community in innumerable ways. Banktown USA lost one of its major corporate headquarters with the merger of Wachovia with Wells Fargo; unemployment climbed rapidly to double digits; and virtually all other economic indicators dipped to extraordinarily low levels. The nonprofit sector in particular experienced a

3 Foundation For The Carolinas administers the Community Catalyst Fund at no cost.

FUNDERS

THOUGHT LEADERS

PARTNER ENVOYS

Cathy Bessant (Chair) Bank of America

James Howell Myers Park United Methodist Church

Laura Belcher ASC

Gene Cochrane The Duke Endowment

Gerald Johnson Charlotte Post

Brian Collier FFTC

Tom Lawrence The Leon Levine Foundation

Dr. Joan Lorden University of North Carolina Charlotte

Andy Elliot UWCC Board

Howard Levine Family Dollar Stores

Judy Schindler Temple Beth-El

Michael Marsicano FFTC

Laura Meyer Wellman FFTC

Eulada Watt Civic Leader

Jane McIntyre UWCC

Anna Spangler Nelson C. D. Spangler Foundation

Pat Phillips ASC Board

Susan Patterson John S. & James L. Knight Fdn

Scott Provancher ASC

Mike Rizer Wells Fargo

Holly Welch Stubbing FFTC

Richard “Stick” Williams Duke Energy Foundation

COMMUNITY CATALYST COMMITTEE

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remarkable increase in demand for services, as well as a concurrent and significant drop in revenues as foundation giving and corporate philanthropy declined, governmental budgets were drastically cut, and individual donors tightened their belts.

A glimpse of the nonprofit landscape in 2009 illustrates what we now know to be just the tip of the iceberg:

Workplace giving campaigns dropped precipitously:4 o 33% decline at United Way o 37% decline at ASC

Demand for nonprofit services grew exponentially: o Unemployment rose to over 10% o Charlotte Emergency Housing reported a 44% rise in referrals from

the County o Crisis Assistance Ministries experienced a 23% increase in clients o Public Health Services had a 35.8% increase in caseload o Social Services saw an increase of 33.5% in applications for

food/nutrition services

In November 2008, Foundation For The Carolinas hosted an informal discussion among local nonprofit, government and community representatives to identify “community issues” facing individuals and nonprofit organizations in the Charlotte area as a result of the financial crisis, as well as possible approaches to addressing these concerns. For their part, nonprofit organizations were already exploring a continuum of collaborative and innovative responses to the crisis with at least one merger underway.5 The sector had a strong desire to be more effective and efficient – even a willingness to try new business structures and program models. Unfortunately, the nonprofit community had limited financial resources, expertise, and time to explore such opportunities. Over the course of the next several months (through a variety of discussions occurring in pockets of the community), a clearer picture of the extraordinary challenges facing the nonprofit sector – and the community at large – began to emerge. The threat to Charlotte’s nonprofit sector was evident and the picture ominous: organizations were suffering from unparalleled revenue losses, while simultaneously grappling with record-breaking demands for services and the economy showed no signs of improvement. FFTC made the decision to pull together various concerned citizens to discuss and see how – if at all – the community wished to respond to the challenges faced. In April 2009, FFTC hosted a gathering of business executives, corporate and private foundation leaders, United Way, ASC, and local philanthropists to address the community’s intensifying crisis.

4 Fundraising at the United Way of Central Carolinas dropped between 2008 and 2009 partly as a result of a controversy relating to the then-president’s pay package, and a concurrent loss of public trust. In addition to the issues at United Way, Charlotte’s workplace giving campaigns (the traditional primary revenue source for UW and ASC) experienced record-breaking reductions in giving levels prompting a community-wide process of reevaluation and transition. See http://www.thoughtbox.org/content/report-workplace-giving-task-force to read the Workplace Giving Task Force Report. 5 Emergency Winter Shelter and Uptown Shelter merged in 2009 to become Men’s Shelter of Charlotte.

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The participants started with these key premises: Charlotte’s robust and long-standing nonprofit sector – whether in the realm of

arts, culture, health or human services – is a source of civic pride as well as an illustration of the city’s ambitious personality.

The nonprofit sector “holds the torch of livability in a community” and the significant threat to its viability requires a unified and decisive community response.

True to the Charlottean “can do” spirit, the group rallied around the perspective that “with crisis comes opportunity” and the discussion centered on two primary questions:

1. How can the community navigate the near-term revenue decline of the nonprofit sector?

2. How can the community use the crisis to plan for a long-term philanthropic future? The conversation began with news of a projected $200 million nonprofit funding gap in the Charlotte-Mecklenburg region – the combined result of recession, changing donor behaviors, and extensive government funding cuts – and news of the unprecedented and increasing demand for services. The stress on the community’s safety net was obvious and perilous. The participants agreed that such a remarkable situation could not be offset on a case-by-case basis, or by the influx of additional private revenue alone. The consensus in the room was that an innovative approach to address the new reality was necessary. While the group acknowledged that stabilizing for the short term was vitally important,6 they prioritized efforts with the greatest promise for the long-term health of the community’s nonprofits. The path that emerged was a partnership among major donors, community thought leaders, FFTC, United Way, and ASC to establish a “strategic investment program” that would foster innovation, collaboration and consolidation within the nonprofit sector; provide funds for restructuring activities that would stabilize the sector; and produce more efficient service delivery systems for nonprofits to utilize for long term sustainability.

Within a month, 7 a smaller gathering of advisors reconvened to further develop the plan for a strategic investment program. The program envisioned would permit coordinated, strategic investment by the community’s major funders that could produce outcomes not possible with traditional philanthropic methods. The group proposed an investment

6 The Critical Need Response Fund (also an initiative of FFTC) emerged as the community’s response to short-term stabilization of the nonprofit community. 7 Hugh McColl (former Chair and CEO of Bank of America) was instrumental in reconvening the group to further discuss the community’s response to the crisis.

STRATEGIC INVESTMENT PROGRAM CONCEPT:

Apply the venture capital idea of "angel investors" to the nonprofit sector by bringing together interested funders to provide seed money for innovation with a goal towards strategic transformation.

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approach less prescriptive by funders and more interactive with potential grantees. Among the potential outcomes envisioned were program redesigns; elimination of duplicative services; improvement of back office efficiencies; agency and sector restructuring; and collaborations, partnerships, and mergers not previously pursued in Charlotte. The group directed Foundation For The Carolinas to develop a program along the lines envisioned. Pursuant to this direction from the community’s civic leadership, FFTC invested significant time and resources over the course of the summer of 2009 laying the groundwork for the program. Foundation staff met with a broad swath of community leaders, including ASC and United Way to gauge their interest level, and gather input on potential issues and organizations that might benefit from the program. FFTC also investigated in depth the few examples of similar programs across the country,8 and engaged The Bridgespan Group (Bridgespan),9 a nationally renowned nonprofit with an expertise in nonprofit management and strategy. FFTC tasked Bridgespan with assisting in the development of the program’s investment goals, as well as conducting a community scan of Charlotte’s nonprofit sector to identify the most challenging issues and greatest opportunities for collaboration. Given the potentially broad scope of the program, the Foundation team worked closely with Bridgespan to help narrow the scan’s focus, clearly define outcomes and investment strategies, as well as identify what key data was required to make informed decisions. In September 2009, the first Strategic Investment Fund10 meeting convened. Attending were representatives of seven prospective major private funders, staff from FFTC, United Way, ASC and Bridgespan, and a several other civic leaders from the government and faith community. The overall feeling of the first meeting was one of both optimism and concern. Optimism because the group felt a sense of enormous promise as they embarked upon this new partnership among funders and thought leaders with the intention of charting a new course for philanthropy in Charlotte. Concern because the crisis facing the community was unprecedented and deepening.

8 Very few similar programs existed to guide the creation of CCF. Among those that FFTC studied were the James Irvine Foundation in California; the Kresge Foundation in Detroit; and a small foundation in New York. 9 Bridgespan is a 501(c)(3) nonprofit organization, that helps nonprofit and philanthropic leaders develop strategies and build organizations that inspire and accelerate social change. Bridgespan has worked locally with (among others clients) Bank of America Charitable Foundation, Communities In Schools of NC, Council for Children’s Rights, and the North Carolina New Schools Project. 10 The Strategic Investment Fund was shortly thereafter renamed Community Catalyst Fund.

COMMUNITY CATALYST FUND MISSION:

To inspire and enable innovation, collaborations, partnerships and mergers

in support of the successful sustainability of Charlotte-Mecklenburg nonprofits.

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FUNDING

COMMUNITY CATALYST FUND $4.25 MILLION

FUNDER COMMITMENT

Leon Levine Foundation $1,000,000

Foundation For The Carolinas $955,000

Bank of America $500,000

Duke Energy $250,000

Duke Endowment $250,000

Julie & Howard Levine $250,000

C.D. Spangler Foundation $250,000

Wells Fargo $250,000

Lori & Eric Sklut $200,000

John S. and James L. Knight Foundation $135,000

Mecklenburg County $75,000

Anonymous $50,000

Miscellaneous $50,000

Crosland Foundation $35,000

Given the Charlotte-community orientation of the initiative, CCF targeted only local funding. The Catalyst Fund initially hoped to obtain financial support from the faith community, but this line of funding failed to materialize. In addition, while CCF was ultimately able to obtain funding from the county, extensive attempts to attract public funding were largely disappointing. A well-orchestrated campaign by CCF directed at both the City of Charlotte and Mecklenburg County initially met with enthusiasm from officials, but the subsequent votes did not go in favor of CCF funding.

Several of the later gifts to CCF illustrate an interesting trend in giving to the Catalyst Fund in that the commitments were contingent upon the funds’ utilization for a specific CCF initiative. The Knight Foundation gift and portions of FFTC’s commitments were earmarked for CCF’s Out of School Time (OST) initiative; the County provided funding specifically for the ongoing restructuring work of the Charlotte-Mecklenburg Library; and the Crosland Foundation’s donation included a caveat that the funds be utilized for the merger of WISH, Family Promise, and Charlotte Emergency Housing.

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INVESTMENTS

Study of Charlotte’s Nonprofit Landscape

The extensive efforts of FFTC staff in laying the groundwork for the creation of the Catalyst Fund, and specifically the engagement of Bridgespan to study Charlotte’s nonprofit landscape, resulted in the first ever sector-wide scan of Charlotte’s nonprofit world.11 This groundbreaking work continues to inform the actions of the Catalyst Fund today, as well as serve as a roadmap of the Charlotte nonprofit sector for others in the community to utilize. The study identified 3,700+ nonprofit organizations in the Charlotte-Mecklenburg region. Many of these were determined (upon closer examination) to be charities not suited to Catalyst Fund activities (e.g. 80% were niche agencies or created for a one-time only purpose). In order to better target potential sectors and organizations for CCF investment, Bridgespan and FFTC excluded those with less than $25,000 in revenues as well as organizations such as PTAs, private schools, and other private clubs. The resulting 769 nonprofits remaining were further categorized into a complex picture of 36 sectors.

11 For a PowerPoint presentation of the Bridgespan study, see http://www.thoughtbox.org/content/innovation-collaborations-and-consolidations-getting-conversation-started

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The study utilized quantitative data on each sector, as well as interviews with community experts in order to more clearly identify the nonprofit sectors with the highest potential for collaboration. The analytical phase eliminated sectors with five or fewer nonprofits, sectors with total revenues of less than $5 million, and sectors unlikely to benefit from the program’s support.12 Four quantitative measures were then applied to further screen the sectors:

1. Total number of organizations within the sector 2. Total revenues of the sector 3. Average revenue per organization in the sector 4. The percentage of sub-scale organizations in the sector

FFTC worked extensively with Bridgespan to develop an interview process that brought in community leaders with expertise in healthcare, housing, government, arts, education, workforce development, human services, and multidisciplinary backgrounds. The key questions posed to these experts were:

Which sectors have a strong need for greater collaboration? Which forms of collaboration would benefit these sectors? What are the key challenges facing these sectors?

The panel’s consensus on high priority sectors was overlaid with the data resulting in the identification of six high priority sectors13, as well as the key challenges for each:

12 Excluded sectors included religion-related, recreation and sports, and international and foreign affairs. 13 Catalyst Fund staff added two additional sectors for further study as prospective participants in the program: land trusts and social capital.

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The data analysis combined with the interview process yielded additional information that permitted furthering narrowing by identifying the subsectors within each of the six priority sectors that seemed to be best suited for collaboration:

The program design team proposed eight potential funding approaches that could best enable nonprofit collaborations in the Charlotte-Mecklenburg community:

8 Funding Approaches

1. Forums & Education

2. Promote Model

Success Stories

3. New Coalitions

4. Shared Infrastructure

& Services

5. Effectiveness & Innovation

Incentives

6. Restructuring Market Thru

Key Orgs

7. Funding Tied to Best

Practices

8. Funding Tied to Sector

Change

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Finally, the FFTC and Bridgespan team recommended that CCF make an open call for applications. Priority for consideration would be given to the identified high potential sectors, but any organization could apply for a Catalyst grant. Four types of grants were outlined:

1. Assessment: Initial stages of determining feasibility of collaboration 2. Planning: Documented commitment to project 3. Implementation: Execution of the collaboration, innovation plan, or merger 4. Post-implementation: Support for projects successfully implemented within 12

months prior to application

Outreach & Education

The first of the eight funding pathways outlined by the program design team is investing in forums and education. Recognizing the vital importance of getting the word out about the Catalyst Fund, as well as educating the community about strategic restructuring in the nonprofit arena, CCF pursued a broad communications campaign beginning in late 2009. The comprehensive plan included coordinating the media coverage of CCF activities, as well as outreach efforts targeting a broad array of audiences (nonprofit volunteers and staff, civic leaders, potential funders, professional resources, and the community at large). Media coverage was plentiful from October 2009 and into early 2010. Several news outlets – including The Charlotte Observer, Charlotte Business Journal, Charlotte Magazine, and Philanthropy Journal – highlighted the establishment of the fund, community education efforts, major donations, and early grants. The following headlines reflect the community’s sense that the initiative was both innovative and ambitious:

Nonprofit Summits & Collaboration Conferences

One of the first outreach events was the Nonprofit Business Summit hosted by Charlotte Business Journal (CBJ) in November 2009. Community Catalyst Fund was officially launched to the community at the CBJ Summit with

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over 350 nonprofit and community leaders participating in a day-long event that begin with Bridgespan presenting the study of Charlotte’s nonprofit landscape and included a candid panel discussion of the sector’s new reality featuring Michael Marsicano, President and CEO of Foundation For The Carolinas; Scott Provancher, President of the Arts & Science Council; and Jane McIntyre, Executive Director of United Way of Central Carolinas. The summit also included breakout sessions led by Brian Collier, FFTC’s Senior Vice President of Community Programs & Civic Leadership, with a goal of jump-starting catalyzing conversation within the nonprofit sector with topics focusing on strategic restructuring, collaboration, and innovation. A second CBJ Nonprofit Summit in May 2010 provided an additional opportunity for FFTC to highlight the Community Catalyst initiative by sponsoring a presentation by nationally respected nonprofit management consulting firm, LaPiana Consulting,14 that looked beyond nonprofit sustainability to identify ways in which collaboration could be utilized to strengthen nonprofits and maximize their impact. FFTC also furthered CCF outreach efforts in by hosting two invitation-only, full day Collaboration Conferences. The goal for these workshops was threefold:

1. Educate participants about the ranges of possible collaboration methods 2. Elicit ideas for collaborations 3. Identify interested organizations

The invitees for the first day were from the housing and shelter sector, and the second day’s participants were drawn from the human services arena. Bridgespan led the sessions, which were a mix of trainings and networking opportunities featuring local and national experts in the area of nonprofit strategic restructuring.

Cohort Groups Another early outreach activity was the creation of cross-sector cohort groups. The concept of bringing together a small, but diverse group of nonprofits to explore collaborative potential was part of the initial scope of work with Bridgespan. The cohort process was intended to break down barriers, build community, and identify collaborative opportunities. A valuable byproduct of the process was a new (or renewed) bond among the participating individuals that has lasted beyond the cohort gatherings, which has led (and likely will continue to lead) to unanticipated rewards down the road. Beginning in late February 2010 and continuing through June of that year, Bridgespan and FFTC worked with a cohort group of ten nonprofits to help them explore collaboration options, including:

Articulating the strategic rationale for collaboration – the “why” Identifying a short list of potential partners for collaboration – the “who” Identifying the range of operational models for collaboration – the “how”

14 La Piana Consulting is a national firm dedicated to strengthening nonprofits and foundations. The organization’s mission is to improve leadership and management practices throughout the sector for greater social impact.

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The cohort organizations represented a wide spectrum of nonprofit knowledge and capacity. Some were just beginning to think about collaborative opportunities and others were further down the road.

The cohort process required a considerable commitment of time and thought (3 to 6 hours a week for 3 months) from nonprofit leaders already faced with remarkable workloads. Nonetheless, all ten participated fully, reported the experience as quite valuable, and all came in on schedule with the required planning report. The reports outlined potential collaborations that emerged from the cohort process, and indicated if further Catalyst engagement would be necessary. Among these were:

CareRing o State/local collaboration to consider implications of healthcare reform

Community Link o Partnership with credit union to support “non-credit worthy” customers

Loaves & Fishes o Client-specific database of food providers

Salvation Army o Hampton-Creste Apartments

Thompson Child & Family Focus o Address youth aging out of foster care system

Cultivating Local Professional Resources Outreach efforts also targeted Charlotte area consultants with practices serving the area’s nonprofits. CCF members recognized early on that their mission to enable nonprofits to adapt to the new economic reality through strategic restructuring and collaboration would require the assistance of professionals with expertise in a variety of areas. CCF aimed to cultivate and enhance such resources at the local level, rather than creating a dependence solely upon experts from outside the community. Most of the local consultants utilized by CCF grantees to date participated in all or some of the outreach activities described below.

Cohort Group Participants

• Community Health Services

• Community Link

• Habitat for Humanity

• Latin American Coalition

• Loaves and Fishes

• Men's Shelter of Charlotte

• Salvation Army

• Thompson Child & Family Focus

• Urban League

• Workforce Initiative for Supportive Housing (WISH)

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In January 2010 FFTC hosted a gathering of more than thirty local consultants to introduce CCF, as well as provide an opportunity for this group of professionals to provide their input to the Catalyst program. The participants cited the remarkable potential for collaboration in the community both within the nonprofit sector, as well as among their own professional group to serve as a valuable resource to the nonprofits. One of the tangible outcomes of this meeting was the creation of an online Directory of Professional Consulting Resources.15 The directory streamlines nonprofit access to a broad array of local experts by providing information on expertise, experience, client base and referrals. Nine areas of expertise categorize over fifty individuals and organizations listed in the directory that are available to assist area nonprofits in their strategic transitions:

1. Accounting & Bookkeeping 2. Fundraising & Development 3. Strategic Planning & Organizational Development 4. General Facilitation 5. General Project Management 6. Grantwriting 7. Marketing & Communications 8. Human Resources & Professional Development 9. Technology

Catalyst also sponsored two strategic restructuring training workshops as part of the effort to develop and train professional resources within the community. LaPiana Consulting facilitated the sessions. The first workshop, held in August 2010 and drawing over forty consultants, was a one-day orientation covering several key content areas in the field of nonprofit strategic restructuring including, the consultant’s role; assessing a nonprofit’s readiness; and best practices. A subsequent three-day workshop followed in September 2010 with LaPiana utilizing a combination of lecture, case study presentation, and role play for an in-depth exploration of the variety of issues and challenges addressed in nonprofit strategic restructuring. Eight local organizations participated in this intensive program, and their listings in the online Directory of Professional Consulting Resources contain a special icon denoting their completion of the advanced training.

Evolution of an Investment Strategy

Pursuant to the recommendation of the program design team, CCF debuted an open grant cycle in November 2009, including the grant application and background and guidelines for grant seekers. CCF informed nonprofit organizations through media and direct outreach efforts, including a link on the FFTC website. In the ensuing two months, the application page received over 650 unique visitors. The application detailed the four phases of funding available (see diagram below), and noted that organizations could apply for more than one grant from Community Catalyst Fund for the same or different opportunities.

15 The directory is administered by FFTC’s Center for Nonprofits. To view the Directory of Professional Consulting Resources, go to http://www.fftc.org/page.aspx?pid=2122

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The application required information from the applicants in the following areas:

Capacity for research, planning and execution o Ability to consider options and implications

Functioning governance structure o Opportunity to enter into meaningful discussions

Strong project leadership o Identification of key staff and why they can succeed

Clearly defined budget o Reasonable request, scope of work for consultants

Defined outcome o New capacity, methodologies and/or replicability

The first grant cycle was quite short with just four weeks between the application’s release and the November 30, 2009 deadline. Nevertheless, CCF received 21 applications and 13 letters of inquiry.16 FFTC, United Way and ASC staff reviewed the first round of applications, and designated each application as either “compelling” or “not compelling” for the Catalyst committee’s consideration. The “compelling” tag was not a recommendation to fund, rather an assessment that the application merited discussion by the committee. Interestingly, many of the “compelling” applications aligned – at least in concept – with potential opportunities identified by early on by the committee and staff. Although several grants were approved, in aggregate, reviewing staff expressed concern that the applications were not as tightly drafted and Catalyst-specific as hoped. Staff suggested a more proactive approach to the application process through increased nonprofit education efforts, and the creation of a subcommittee for grant review prior to submission to the full CCF committee. The proposed subcommittee process would facilitate a more interactive approach with potential grantees and permit the application to be more fully vetted for eligibility, outcomes, budget and alignment with Catalyst goals. The

16 Letters of Inquiry could be submitted if an organization had a concept, but wanted to gauge CCF interest in funding before putting together a full application.

ASSESSMENT ($25K or less): Investigate & determine feasibility

PLANNING ($50K or less): Agreement to proceed; determine path to success

IMPLEMENTATION ($100K or less): Execute plan

IMPLEMENTATION-PLUS (amount will vary based on project): Ready to scale-up

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subcommittee’s activities would, in turn, provide for a more informed investment decision-making process by the full CCF committee. CCF members agreed with the staff recommendation and created the CCF Concept Subcommittee in early 2010. The Subcommittee reviewed each application from an investor analysis perspective that asked three questions:

1. What would Catalyst be funding? 2. What are the prospects for success? 3. Is this the best use of Catalyst money?

The creation of the Subcommittee was the first in a process of evolution for Catalyst’s overall investment strategy. FFTC staff repeatedly refined the program as a result of ongoing discussions with a variety of stakeholders (including agency staff, volunteer leaders and other community members), as well as feedback from committee members, and the Subcommittee. By mid-2010 (after three grant cycles), CCF recognized that the open grant cycle was inefficient (only 12 projects funded from over 45 applications) and not the best method for generating truly catalytic ideas. Moreover, most of the grants that CCF funded originated in the Subcommittee, rather than through the open application process. The CCF committee determined that the highest and best use of Catalyst funds (as well as consideration for staff and committee member time) necessitated a shift away from the open grant cycle and moved to an invitation-only process, placing responsibility for such directives with the Subcommittee and staff. Catalyzing opportunities were subsequently categorized in three buckets:

The revised grantmaking strategy resulted in far fewer grant applications, but higher quality submissions overall. Also, the more proactive/less reactive process led to significant Catalyst-initiated investments (such as the Managed Services Organization and the Out of School Time initiatives discussed below), which in turn increased the committee members’ sense of ownership in the investment process. Clearer patterns of investment emerged by the end of 2010, which informed the assessment of initiatives in a more intentional, targeted manner. The investments began to track

CATALYST-INITIATED WORK

Directive from Subcommittee, MSO Task Force, and/or CCF Members

RESPONSIVE SECTOR LEVEL WORK

Vetted thru Subcommittee

In consultation with key sector and/or governmental leaders

RESPONSIVE AGENCY LEVEL WORK

Vetted thru Subcommittee

Most common path begins with staff

Invitation-only

CCF CONCEPT SUBCOMMITTEE:

Gerald Johnson

Tom Lawrence

Anna Spangler Nelson

Susan Patterson

Richard "Stick" Williams

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more closely with primarily four of the eight funding approaches (highlighted in color below) outlined by the program design team:

Moreover, many investments related to three of the six previously identified high priority sectors:

1. Housing & Shelter 2. Afterschool/Youth Development 3. Workforce Development

And many of other initiatives explored by Catalyst aligned with a “known opportunity” that had been identified early in the CCF process either by FFTC, United Way, ASC, or committee members.

Catalyst-Initiated Investments

Two important initiatives resulted from the evolution of CCF’s investment strategy away from the open grant cycle and towards a more proactive approach:

1. Managed Services Organization (MSO) Task Force 2. Out of School Time (OST) Task Force

8 Funding Approaches

1. Forums & Education

2. Promote Model

Success Stories

3. New Coalitions

4. Shared Infrastructure

& Services

5. Effectiveness & Innovation

Incentives

6. Restructuring Market Thru

Key Orgs

7. Funding Tied to Best

Practices

8. Funding Tied to Sector

Change

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MSO Task Force Many of the early applications and letters of inquiry to the Catalyst program evidenced an interest in exploring shared services, one of the eight funding pathways identified by the Bridgespan study. CCF committee members felt the significant level of interest in this type of collaboration warranted a proactive response, and in March 2010 voted to create the MSO Task Force in order to investigate the feasibility and value of investing in larger, coordinated shared services projects to benefit the Charlotte nonprofit community. The starting point was identifying a volunteer task force of key experts in the community from both the for-profit and nonprofit worlds to pursue a local assessment of managed services opportunities that may exist in the community; review the resulting research; determine the feasibility of such an entity and assess the potential costs; and form a recommendation for consideration by the CCF committee. The MSO Task Force asked staff17 to conduct an initial study of interest and capacity of some of the community’s larger nonprofits with representation across a broad spectrum of service areas. Of the 63 organizations invited to participate, 47 completed the survey – a solid 75% response rate. The survey sought to:

Determine the level of nonprofit interest in MSO participation Determine the subject areas of interest Identify areas of opportunity Identify perceived road blocks Provide an opportunity for nonprofit input

The initial survey results defined the scope of work for the Task Force going forward. 65% of the respondents expressed interest in participating in an MSO – representing $155 million in annual budgets and over 1,400 employees. The top subject areas of interest were:

Joint purchasing (supplies, capital, media buys, etc.) Human resources and employee benefits (particularly insurance) Technology

The MSO Task Force engaged Tides, a San Francisco based consulting firm with considerable hands-on experience in shared technology and joint procurement services, to further explore the viability of CCF investment in these areas.

17 Holly Welch Stubbing (FFTC SVP, Philanthropic Advancement & Internal Counsel), David Snider (FFTC VP, Community Programs & Civic Leadership), and Laura Smith (consulting firm of Smith & Harbrecht) provided staff support for the MSO Task Force.

MSO TASK FORCE Pat Phillips, Chair Bank of America (retired)

Austin Adams JP Morgan Chase (retired)

Laura Belcher ASC

Tom Brydon Accenture (retired)

Gene Cochrane The Duke Endowment

Andy Elliott PricewaterhouseCoopers

Laura Meyer Wellman FFTC

Matt Packey Queens University

Russell Schwartz United Way

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Tides emphasized early on the importance of defining the MSO value proposition given the significant upfront investment that a managed service organization would require (an estimated $1 million to $2 million). Among the possible outcomes were: improved quality of services, improved efficiency, reduced risks, and financial savings. Tides underscored that the latter outcome should not be of primary focus since the largest MSO savings in their experience was in the 6% range. Based on this input from Tides, the MSO Task Force identified three primary goals:

1. Provide affordable, quality back-office services for nonprofit organizations to increase their effectiveness.

2. Deploy highly qualified professionals on back-office services, so program staff can focus on their missions.

3. Develop a financially sustainable shared service solution for the Charlotte nonprofit community.

To this end, Tides conducted extensive research on behalf of the MSO Task Force employing a myriad of methods and sources (see illustration below). The market research emphasized the community’s anticipated target market for shared services and included a second, detailed assessment survey of nonprofit organizations (78% of the 91 agencies invited to participate responded); four focus groups representing 18 organizations; and over 50 interviews, including 17 participant interviews.

The process followed by the Task Force permitted extensive local input combined with that of individuals and organizations from outside the community. Pat Phillips, the MSO Task

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Force Chair, noted that, “This combination resulted in an informed external perspective tempered with a fundamental knowledge of what works best in Charlotte.” The bulk of the Task Force work took place over the course of just over six months – an ambitious timetable that required regular and repeated engagement by all of the Task Force members and staff. As with the cohort work, participants again demonstrated a remarkable commitment to the Catalyst program. The MSO Task Force findings were presented to the full CCF committee in December 2010 and are encapsulated in the Tide’s report, Shared Services That Work: Surprise Findings from Charlotte-Mecklenburg Nonprofits.18 Tides tested the validity of many assumptions about larger nonprofit organizations in Charlotte and how an MSO might serve their needs (see below). The title of the report indicates that a surprising number of these assumptions were disproved. In fact, one very important finding is that nonprofits run their businesses much more efficiently than for which they are sometimes given credit.

Charlotte-Mecklenburg nonprofits are interest in shared services.

Shared services will work best for mid-size nonprofit organizations.

Managed services can provide nonprofits with efficient services for long-term cost savings.

Many nonprofit organizations are struggling to effectively use technology tools.

Nonprofit organizations want lower-priced employee benefits. .

Local nonprofit service providers could expand their services to serve more Char-Meck nonprofits.

Nonprofits are dissatisfied with their current operations and service providers.

Nonprofit organizations are spending enough money on supplies, equipment and services that they would be attractive to vendors if pooled together.

Managed services will offer nonprofit organizations immediate cost savings.

Nonprofits do not have access to preferred purchasing discounts available to large companies.

Joint supply and equipment purchasing would save nonprofit organizations money.

Nonprofit organizations can create pooled a health insurance option to save money.

Nonprofit organizations have adequate human resources management capacity.

Nonprofits will easily switch to another service provider for a better price or higher quality service.

A new managed services organization is the most efficient way to provide shared services in Charlotte-Mecklenburg.

Nonprofits don’t have access to the tech tools they need to operate effectively.

Local companies can provide shared services for Charlotte-Mecklenburg nonprofits.

18 The full report is available at http://www.thoughtbox.org/content/shared-services-work-surprise-findings-charlotte-mecklenburg-nonprofits

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Based upon these findings, Tides presented the MSO Task Force with five structural options (see diagram below) to consider for moving forward with a managed services organization in Charlotte. After discussion (and for the reasons highlighted in the diagram), the Task Force narrowed its focus to the third option (i.e. growing existing local managed service organizations to better serve the needs of nonprofit agencies).

With the option to grow existing local MSOs in mind, the Task Force redirected its attention to the three subject areas revealed by the research to be highest on the list of agencies’ MSO wish lists:

1. Joint purchasing 2. Human resources (HR) and employee benefits 3. Technology

The final recommendation of the Task Force focused on applying the managed services model to core HR services and technology.19

19

Joint purchasing was found to involve a relatively small volume of spending, with low margins for the vendor.

Moreover, there exists no self-sufficient purchasing model to employ in Charlotte. The top HR and benefit needs for nonprofits are affordable health insurance and HR consulting services/risk management. While North Carolina law technically permits nonprofits to employ shared services for employee benefits, insurance companies are disinclined to underwrite such an arrangement. Moreover, changes in the health care environment make a group-purchasing model for health insurance practically unavailable. For profit providers consider some nonprofit organizations to be too “high risk” (e.g. NCDT potential for dancer injury).

5. NO MANAGED SERVICES: Sufficient interest & opportunity exists to pursue in some form

3. GROW EXISTING LOCAL MANAGED SERVICE ORGS Determined by Task Force to be best available option

2. INCENT CONVERSIONS TO FOR-PROFIT PROVIDERS: Insufficient number of nonprofits to support conversion

4. USE STATE ASSOCIATION: Lack of interest, presence and reputation in Charlotte

1. ESTABLISH NEW STAND-ALONE MSO: Found to be expensive & financially unsustainable

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The MSO possibility found to be plausible in the arena of human resources lay in the less-expansive arena of core HR services (e.g. payroll, HR training, employee management support, etc.). In this area, a local MSO already existed in the Children and Family Services Center (CFSC). The Task Force recommended exploring the feasibility of investing in CFSC to build out a new business line as an administrative service organization (ASO) that could result in improved staff morale and retention, decreased HR risk, and increased recruitment of qualified staff members for participating agencies. The managed services investigation found most promise in the technology field. Particularly attractive to the Task Force were opportunities relating to technology training tools (user groups, on-site training and coaching), and technology capacity-building projects. NPower Charlotte Region, the Task Force believed, could expand their already existing nonprofit MSO model to allow better use of technology tools by nonprofits, enhance the agencies’ e-visibility, and increase their staff efficiency through mutually beneficial relationships matching corporate partners with nonprofits. The grants resulting from the MSO Task Force efforts will be discussed in more detail below (Children & Family Services Center and NPower). Suffice to say that the extensive work of the Task Force (including the data collected and the Tides report) provided a sound basis for the Catalyst program to determine whether and how to invest further in the managed services arena, while incidentally debunking some widely-held myths about the nonprofit sector. Moreover, the Task Force report has become one in a growing library of heretofore nonexistent resources of best practices roadmaps for the Charlotte community going forward.

Out of School Time Task Force Like the MSO Task Force, the Out of School (OST) Time Task Force Catalyst grew from a kernel early in the CCF process to become a significant Catalyst-initiated project to pursue the viability of a potentially catalyzing opportunity. The CCF program design team identified afterschool/youth development (including “out of school time”) as one of the high priority sectors for CCF investment, noting that the sector is highly fragmented with few comprehensive information sources on the availability or the quality of the programs. Investing in this arena was complicated by the fact that the sector is highly diffused and comprised of many small (and sometimes territorial) organizations. The Bridgespan study cited several additional major roadblocks to collaboration:

The significant costs of restructuring The critical need for government buy-in Funding cuts jeopardize most – if not all – program funding Limited ability within the sector to be strategic in reductions

In the early winter of 2010, the Catalyst Fund established an OST Task Force to assess and identify how to improve access to information, quality of programs, and help all stakeholders – parents, children, funders, and policymakers – make informed decisions about OST enrollment and investment.

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The Task Force had three primary goals:

1. Deliver to the community and CCF a set of recommendations to improve the OST system in Charlotte-Mecklenburg, focused primarily on programs serving school-age children (not including those child-care programs serving pre-K youth)

2. Publicly represent the Task Force and its recommendation/activities 3. Contribute to and participate in a plan to engage the community further

The membership of the Task Force provided broad community representation to insure that all the diverse voices were engaged in the process. Providers were deliberately not a part of the Task Force, although additional pathways were developed to include their thoughts and ideas. Alisa MacDonald, co-chair of the Task Force, observed, “We had the right people at the table – those with a passion and interest for the big mission of transforming OST in Charlotte-Mecklenburg.” The varied composition of the Task Force also presented some challenges, however. With so many voices to be heard, the process was not necessarily, as Ms. MacDonald noted, “a neat little package”. Nonetheless, there was general agreement that the success of this very broad initiative required the full spectrum of representation that sat at the table. The Task Force work was informed by the efforts of its Project Management Team, which

included staff and consultants from the Lee Institute, Bridgespan Group, and Partners in Out of School Time (POST)20. Rusty Bryson, co-chair of the OST Task Force pointed to the work of the Project Management Team as “critical to moving the project forward. [They] did the heavy lifting for the thought leadership.” Among the Project Management Team activities were:

Interviews and fifteen focus groups with providers, parents, and youth in the community

An inventory of over 500 distinct programs/sites in the County

20 POST’s involvement was considered “brilliant” by the co-chairs, who felt their participation gave the Task Force “an authentic voice” and whose early involvement was crucial to moving the group through the early phases of work in particular.

OST TASK FORCE Rusty Bryson, Co-chair Cary Street Partners

Alisa McDonald, Co-chair Duke Energy

Laura Belcher ASC

Kwain Bryant Empowerment Exchange

Ann Clark Charlotte-Mecklenburg Schools

Brian Collier FFTC

Michelle Lancaster Mecklenburg County

Brett Loftis Council for Children’s Rights

James Mitchell Charlotte City Council

Lydia Garza Olmstead St. John’s Baptist Church Preschool

Joni Trobich Mecklenburg PTA Council

Pamela J. Wideman City of Charlotte

Lauren Woodruff Bank of America

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Benchmarking of best practices used by other communities to improve and coordinate OST

Research on best practices in standards and assessment design The findings of the Task Force were reported to the CCF committee in the summer of 2011.21 One of the most vital results of the OST Task Force work was to create a vision for the community’s OST sector. Mr. Bryson described the development of the vision as extremely difficult: “Defining the scope and priorities was the hardest thing…because [it was] deciding between one child and another in some instances.” The vision did, however, provide a starting point, as well as boundaries within which to move forward with transforming the OST sector. The vision for OST in Charlotte comprises five principles:

Using the above vision, the Task Force then identified the critical gaps in the current OST system that required attention in order to set the sector on the path to long-term success.

Gaps in parent and youth engagement and information An insufficient range of programs in several neighborhoods for middle and high school

students Uneven quality of programming Lack of clear leadership and advocacy for the sector

Finally, the Task Force recommended several actions and/or investments to address the gaps and achieve the vision (see following diagram).

21 The full report, The State of Out of School Time in Charlotte-Mecklenburg County, is available at http://www.thoughtbox.org/content/overview-out-school-time-children-and-youth-charlotte-mecklenburg-county

The community understands that high-quality, full-time afterschool

& summer programs can contribute to the academic, social and emotional, and

physical development of youth.

All programs deliver high-quality Out of School Time services

based on a common and clear set of standards.

All unsupervised youth have the opportunity to enroll in and

attend age-appropriate afterschool & summer programs

that are offered 4-5 days per week throughout the year.

A leader and lead agency has clear responsibility for

supporting, promoting, and advocating for the Out of School

Time Sector in Charlotte.

Parents, youth, and funders have the information need to make

informed choices and advocate for Out of School time that meets

their needs.

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The Task Force’s vision was very deliberatively drawn and based on a foundation of data and a high level process. Ms. MacDonald warned that the achievements of the project to date could “be diluted if the scope gets out of control.” The next steps must be to “follow the path set, and keep moving with what’s been outlined” before taking on additional aspects of the sector’s activities. The intensive commitment of the OST Task Force – like the MSO Task Force, cohort group participants, and so many other individuals and organizations associated with CCF – evidences an additional qualitative value of the Catalyst program: that of bringing together a diverse group to benefit the nonprofit sector for the long-term betterment of the Charlotte community. Moreover, the report of the OST Task Force adds to an extensive library of community resources resulting from Catalyst investment.

• Action: Empower parents and youth with better information to make informed OST decisions. • Investments: Create program locator with availability/quality info. Build better partnerships with existing programs/publications for parents to share info. Use social media to attract youth.

• Action: Increase number of unsupervised youth enrolled in high-quality OST programs. Start by increasing access for low-income, disadvantaged youth (K-8). • Investments: Fund additional slots by removing youth off wait lists. Make longer-term investments to strengthen partnerships & advocate for greater sector funding.

• Action: Raise overall quality of OST programs with a comprehensive quality improvement system, including a common & clear set of standards. • Investments: Finalize development of quality standards & design funding/grant process. Invest also in development of training, assessments & other supports for OST providers.

• Action: Establish a leader and lead organization with clear responsibility for supporting, promoting &advocating for OST sector. • Investments: Support "champions circle" of leaders to push OST agenda; take longer-term actions to i.d./create OST lead org & solicit community, provider & funding input.

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Grants Awarded To Date

In addition to the investments previously detailed, Catalyst has supported 19 initiatives with over $2.5 million in grants since December 2009. Each grant is profiled in the following pages, including specific information on:

The organization(s) involved The grant amount and date approved The project description The outcomes to date Related publically available documentation22

22 In some instances, related documentation (e.g. consultant reports or studies) remains confidential. When publically available, a link to the information is included. 23 The grant is contingent upon both the City Council and Mecklenburg County Commission approval to move forward on the issue.

GRANT AMOUNT APPROVED

Ada Jenkins Center $65,000

ASC/FFTC Revenue Pilot Projects $100,000

Blumenthal Performing Arts Center/ASC $60,000

Char-Meck Coalition for Housing $135,000

Charlotte Family Housing $255,000

Charlotte-Mecklenburg Library $225,000

Children & Family Services Center $50,000

Children’s Home Society/Youth Homes $60,000

City-County Consolidation $156,00023

Council for Children’s Rights (Out of School Time) $250,000

Crisis Assistance $100,000

Goodwill/Workforce Dev. Bd./Jacob’s Ladder $180,000

Habitat for Humanity $188,000

Legal Services of Southern Piedmont $26,000

Mecklenburg County $100,000

Men’s Shelter of Charlotte $200,000

Multi-Faith Housing Initiative $135,000

NPower $264,800

Opera Carolina/CLT Symphony/NC Dance Theatre $38,000

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In reading the following grant profiles, the reader should bear in mind several considerations:

Foundation staff reviewed concepts and/or had discussions with hundreds of organizations – some of which had merit, but couldn’t be developed for one reason or another.

As such, these grants don’t necessarily represent the best grants that could be made, but Foundation staff and the Subcommittee tried to pick opportunities that could either represent a particular sector or have the potential of benefiting a wider group of organizations.

Some CCF grants (typically relatively small amounts) were made in areas that the committee and/or Subcommittee knew little about, but in those cases staff believed that some exposure to the area might better inform funders about what’s going on in these sectors (e.g. emerging populations represented, area identified early on as having potential to benefit from the program, etc.).

Each of these grants has a back-story in the sense that they each traveled different paths to funding; each was refined and sometimes reshaped along the way by FFTC staff, the Subcommittee, and the CCF committee both prior to and following approval.

FFTC staff has monitored all grantees closely from approval to completion, and in many instances course corrections have been necessary.

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LEAD ORGANIZATION ADA JENKINS CENTER

PARTNER Solomon House AMOUNT APPROVED $65,000 APPROVAL DATE April 2010 PROJECT DESCRIPTION Described in application as assessment and planning for merger of 2

North Meck providers, but CCF Subcommittee recommended expansion of proposal to include investigation of other collaborative opportunities that might exist in North Meck area (among 4 towns with over 60 nonprofit and governmental orgs that serve individuals & families in need) and assess viability of potential application of that model for entire Mecklenburg region.

OUTCOMES TO DATE Major, first ever study assessing North Meck community needs and resources, involving interviews, focus groups, and research

4 subject areas (1) Health (2) Housing & Shelter (3) Education/Workforce Development (4) Other Human Services, with 13 key opportunities identified for greater collaboration, joint ventures and collective impact in the community. Implementation strategies for each included in the report

Establishment of Planning Council to pursue implementation of study recommendations

Numerous presentations of study to boards of different nonprofit and community groups, community development councils, governmental bodies, etc. throughout region

Project Steering Committee continues to meet monthly to take the broad recommendations from the Assessment of Community Services in North Mecklenburg and South Iredell Counties report and prioritize, and add detail to, the recommendations in terms of specific action items

Issue-base collaborative groups (e.g, health, housing, education, workforce development) are meeting to identify key priority areas using a logic process framework

Steering group is working through a logic process model to develop the “community planning group” recommendation from the early report.

Steering group facilitator had phone conversation with NPower about potential future partnership; and NPower wants to connect after group is through the prioritizing process

DOCUMENTATION Jacobs, Roslyn-Allison and Morris, Carol and Page, Charles, Assessment of Community Services in North Mecklenburg and South Iredell Counties, April 2011

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LEAD ORGANIZATIONS BLUMENTHAL PERFORMING ARTS CENTER (PAC) AND ASC

AMOUNT APPROVED $60,000 APPROVAL DATE December 2009 PROJECT DESCRIPTION The project provided an opportunity for the organizations (representing

the two largest cultural consumer databases in Charlotte) to integrate data, trends, and client attributes in order to identify intersections between the two, as well as clarify the relationship between ASC donors and PAC patrons. The resulting information could then be analyzed to improve outcomes for the mutual benefit of both organizations.

OUTCOMES TO DATE Both organizations have better understanding of their constituencies at a level of detail never before available

Data-driven decision making and marketing strategies possible to both organizations now

ASC has used information to refine message to donors Initiated series of pilot programs to target ASC donors for sales

of PAC tickets with overall response rate well above normal (e.g. pilot projects resulted in over $39K in ticket sales)

Post-CCF grant – both organizations have operationalized the findings: integrated data analytics into strategic plans

PAC targeted ticket offerings now an enhanced benefit of ASC membership

Considering expansion of program to other performing arts and cultural databases in the community with hopes of cultivating new ticket buyers for those organizations (an outcome also sought by Opera Carolina, the Charlotte Symphony, and North Carolina Dance Theatre

CCF work confirmed the disconnect that exists between being a cultural patron and becoming a cultural donor (10% of PAC patrons are ASC donors) in Charlotte

ASC credits grant with solidifying their Power to Give strategy, which is viewed as an entry level for new donors (targeted giving to particular ASC-funded organization)

LEAD ORGANIZATION ARTS & SCIENCE COUNCIL

PARTNER Foundation For The Carolinas AMOUNT APPROVED $100,000 APPROVAL DATE December 2011 PROJECT DESCRIPTION CCF funds to support several revenue diversification/customer

acquisition pilot projects of varying individual grant sizes within the arts and science sector (e.g. multi-facility passes, patron data capture).

OUTCOMES TO DATE No pilot projects have yet been finalized (as of February 2012), but launch is anticipated by third quarter 2012

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LEAD ORGANIZATION CHARLOTTE FAMILY HOUSING

AMOUNT APPROVED $255,000 APPROVAL DATE(S) (1) $20K CEH, December 2009 (2) $30K WISH, April 2010 (3) $170K,

December 2010 PROJECT DESCRIPTION Merger OUTCOMES TO DATE Successful merger as of July 2011 of Workforce Initiative for

Supportive Housing (WISH), Charlotte Emergency Housing, and Family Promise of Charlotte brought together 3 agencies with differing programs all focused on same goal: helping working families facing homelessness

Anticipated to serve ~600 people annually as Charlotte’s only program with a mission focus on homeless families

Merger followed WISH and CEH separate assessments (funded by CCF grants) on potential collaborations with other nonprofits

Charlotte Family Housing program tackles family homelessness by utilizing a two-phase approach: (1) Starts with transitional shelter sites for families (2) Ends with placing families in own permanent housing

Continuum resulting from merger provides one point of entry and supports transition from shelter to permanent housing with supportive services

Three different sheltering sites and scattered site permanent housing expected to serve 195 families per year totaling 585 household members (assuming average household of 3), including 380 children per year

LEAD ORGANIZATION CHARLOTTE-MECKLENBURG COALITON FOR HOUSING

PARTNER University of North Carolina Charlotte Urban Institute AMOUNT APPROVED $135,000 APPROVAL DATE December 2011 PROJECT DESCRIPTION Coalition announced in October 2010 and gained significant momentum

in its first year. Initiative represents rare alliance among City, County, and Charlotte Housing Authority with the intention of targeting special populations through tax credit set-asides, rapid re-housing model, and supportive housing efforts. Critical need for accurate data identified by Coalition, and CCF funds will support the creation of homelessness and affordable housing data mart.

OUTCOMES TO DATE Working group (including UNCC, United Way of Central Carolinas and others organizations in the housing and shelter network) developing data mart requirements

Further refinement of plans for the integrated data repository at UNCC are underway

Study of data quality assessment ongoing

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CFH addresses Goal 1 of Charlotte-Mecklenburg’s 10 Year Plan to End Homelessness: Get homeless families and individuals into safe, appropriate permanent housing as soon as possible (via the rapid rehousing model), and also addresses Goal 3 of the Federal Strategic Plan to End Homelessness: Prevent and end homelessness for families, youth and children in 10 years by transforming homeless services to crisis response systems that prevent homelessness and rapidly return people who experience homelessness to stable housing (via CFH continuum of care model)

DOCUMENTATION Charlotte Family Housing, What is Charlotte Family Housing? http://www.charlottefamilyhousing.org/ourstory/what-is-ceh-about/

LEAD ORGANIZATION CHARLOTTE MECKLENBURG LIBRARY

AMOUNT APPROVED $225,000 APPROVAL DATE(S) (1) $75K July 2010 (2) 150K December 2010 ($75K CCF & $75K County) PROJECT DESCRIPTION Funding for the planning and implementation phases of the Library

restructuring project, including the work of the Design Team and that of the subsequent Citizen Task Force on the Future of the Library

OUTCOMES TO DATE March 2011 Future of the Library Task Force Final Report includes detailed findings of Task Force & recommendations to ensure a sustainable future for the Library system

Task Force studied 13 peer communities and 55 peer Library systems; and conducted phone surveys of residents and Library users

Task Force met 3 to 4 hours every other week for four months 17 members were selected from over 80 applications and

represented a cross-section of the community, chaired by Dr. Jim Woodward, Chancellor Emeritus of UNC Charlotte

County Commissioners and Library Board both recommended approval unanimously – brought consensus back to previously widely divided bodies

The Final Report also serves as the Library’s interim strategic plan and operating imperative

39 recommendations (35 of which are underway with the remaining 4 not yet due to start) in the areas of funding, operations, Center City sites, Library/County relationship, and The Library of the Future

DOCUMENTATION Lee Institute & LaPiana, Future of the Library Task Force Final Report, Mecklenburg County, North Carolina, March 2011

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http://www.thoughtbox.org/content/future-library-task-force-final-report

LEAD ORGANIZATION

CHILDREN & FAMILY SERVICES CENTER

AMOUNT APPROVED $50,000

PROJECT DESCRIPTION Assess the feasibility of expanding CFSC’s core HR shared services & optional services to agencies outside the CFSC building (HR services include payroll administration, benefits administration, recruiting, training, risk management, etc.). Grant emerged from CCF MSO Task Force work.

OUTCOMES TO DATE CFSC conducted 2 focus groups involving 12 agencies (18 expressed initial interest) to gauge interest in shared HR services

Low level of interest in outsourcing payroll & associated services

Significant interest in receiving assistance in development or improvement of HR programs and practices

Significant interest in having access to professional HR advice and services on “as needed basis”

Significant interest in coordinated opportunities for nonprofits to jointly participate in efforts to meet their common needs (e.g. training, data sharing, facilitating info sharing to learn/benefit from each other’s’ experiences)

Concerns expressed about shared services relating to affordability, responsiveness, and focus on individual agency

Concern that because shared services proposal included services agencies didn’t currently offer, participating would represent additional expenditure

Preference for “opt in” basis for individual services

LEAD ORGANIZATIONS CHILDREN’S HOME SOCIETY/YOUTH HOMES

PARTNER Family Life Council AMOUNT APPROVED $60,000 APPROVAL DATE December 2009 PROJECT DESCRIPTION Merger of Charlotte-based Youth Homes with Greensboro-based

Children’s Home Society and Family Life Council. CCF grant largely funded strategic planning effort with focus on development, Quality Improvement efforts, and platform for continued growth.

OUTCOMES TO DATE 18 months out from merger: $20M annual operating budget (from $12M at start); $2.5M in new contracts awarded to combined organization in first 4 months; expanded broad scope

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of programming to 25 counties; launched significant effort to enhance Quality Improvement efforts across the agency; legacy programs integrated into merged orgs services; $7M in youth programming added

Leveraged additional funding as result of 3 orgs merging -$1.8M from NC for family reunification programs; over $1M partnership with Charlotte Housing Authority; and up to $12M investment from combination of Federal Social Innovation Fund, Edmund Clark Foundation & Duke Endowment that will dramatically enhance number of youth served through programs

Launched major strategic planning effort with help of experts from broad range of disciplines and comprehensive input from internal & external stakeholders

Engaged consultant to work with all staff to address cultural and change management aspects of the merger to ensure smooth and positive transition

Working on donor database integration, strategic brand repositioning and administrative staff expansion

LEAD ORGANIZATIONS CITY OF CHARLOTTE/MECKLENBURG COUNTY

CONSOLIDATION AMOUNT APPROVED $156,000 APPROVAL DATE(S) (1) $6,000 July 2010 (2) $150,000 November 2011 PROJECT DESCRIPTION Charlotte Mayor Anthony Foxx and Mecklenburg County

Commissioner (then-Chair) Jennifer Roberts attended the July 2010 CCF meeting to request assistance in assessing the viability of consolidation of the City of Charlotte and Mecklenburg County. Subsequent funding is to support creation and activities of charter commission to study the issue.

OUTCOMES TO DATE September 2010 white paper providing an overview of the process for political consolidation, the basic facts about local government mergers and a short history of consolidation efforts in Charlotte-Mecklenburg

Position of white paper is neutral and provides an outline of the key process steps, decision points, and the estimated timeframe involved in revisiting political consolidation

Mayor quietly convened group of regional mayors for broad general discussions of regional concern (intent to meet twice a year), and he raised consolidation issue with intention of assessing their concerns, interest, etc.

Mayor built political support for the initiative among elected officials and staff before moving to white paper’s

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first step recommendation of creating a task force

Day after appearance by Mayor and Commissioner Roberts at CCF, City Council approved moving forward on 4 areas of functional consolidation and County Commissioners approved same following white paper

Post re-election in November 2011, Mayor Foxx announced political consolidation is a priority of his second term

December 2011, Charlotte City Council approved commission of independent group to study consolidation

Mecklenburg County Commissioners have not brought matter to vote as of February 2011

Matthews Town Board passed resolution in January 2011 opposing consolidation efforts

Proposed task force would consist of 25 non-paid members (13 from the county, 12 from the city) who would review the consolidation efforts from 1995-96, identify current circumstances and climate, get public input, and report out findings

LEAD ORGANIZATION COUNCIL FOR CHILDREN’S RIGHTS

PARTNERS Partners in Out of School Time (POST) AMOUNT APPROVED $250,000

APPROVAL DATE(S) (1) $50,000 October 2011 (2) $200,000 December 2011 PROJECT DESCRIPTION Funding permits implementation of several recommendations of Out

of School Time Task Force, and merger of Council for Children’s Rights and POST.

OUTCOMES TO DATE Merger planning discussions underway

2 staff members on-boarded for merger implementation Program locator currently being built-out Quality standards in process of completion

DOCUMENTATION Morris, Carol and The Lee Institute, Workforce Development Sector Analysis: focusing on Workforce Development for Adults with Barriers to Employment in Charlotte-Mecklenburg, http://www.dukemansion.com/leeinstitute/ourwork-T.html

LEAD ORGANIZATION CRISIS ASSISTANCE

PARTNER(S) Charlotte Area Hotel Association

AMOUNT APPROVED $100,000

APPROVAL DATE(S) October 2011 PROJECT DESCRIPTION Significant gap in access to furniture, appliances, etc. for needy

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families and uncoordinated system lacking accountability/efficiencies and resulting in duplication of efforts by numerous providers. CCF funds to establish a free furniture bank, including acquisition of warehouse as well as development and execution of distribution plan.

OUTCOMES TO DATE Warehouse acquired and operational as of December 2011

Donated furnishings from hotels, retailers, universities and individuals are collected and re-distributed to individuals and families every day at the Crisis Assistance Ministry Furniture Bank free of charge

DOCUMENTATION For information see, http://www.crisisassistance.org

LEAD ORGANIZATION GOODWILL INDUSTRIES, INC.

PARTNERS Workforce Development Board and Jacob’s Ladder AMOUNT APPROVED $180,000 APPROVAL DATE(S) (1) $80,000 April 2010 (2) $100,000 December 2011 PROJECT DESCRIPTION (1) Sector-wide review of job training and workforce development (WFD)

needs, including inventory of services, discussions with other providers, focus groups with at-risk populations, etc. (2) Implementation of strategic decisions and recommendations resulting from sector review, including restructurings and collaborations.

OUTCOMES TO DATE August 2011 release of major study of workforce development sector in Charlotte-Mecklenburg which analyzes public and nonprofit WFD sector serving adults with barriers to employment in region; and identifies opportunities for strengthening coordination, integration and leveraging resources to better serve both job seekers and businesses that employ them

5 vital structural weaknesses in WFD sector identified by study, with recommendations and “process tips” for addressing each: (1) Workforce sector operates as patchwork of orgs working independently (2) Weak linkages exist between sector and employers (3) Employment expectations for low-skilled workers are often too low with entry-level seen as “end game” (4) Individualized needs of job seekers often not identified and resources to address them are limited (5) The continuum of services for job seekers not fully developed in Char-Meck

Conducted 28 interviews, 8 focus groups to identify local needs, successes and ideas for improvement; a profile of the local sector summarizing services of each org; a scan of literature and experiences around the nation to look at possible strategies for local implementation; and 3 progressive gatherings of professionals working in the sector to share early findings, receive feedback and create momentum for change

WFD sector has begun to see themselves as unified sector,

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rather than collection of agencies

8 member steering committee (professional and board leaders of the three sponsoring orgs) guided work of consulting team and met regularly from September 2010 thru July 2011

Multi-organizational leadership team convened to assure sustainable & coordinated response to study in order to pursue implementation of recommendations, and capitalize on the momentum for collaboration build over the course of the study

DOCUMENTATION Morris, Carol & Lee Institute, Workforce Development Sector Analysis: focusing on Workforce Development for Adults with Barriers to Employment in Charlotte-Mecklenburg http://www.dukemansion.com/leeinstitute/ourwork-T.html

LEAD ORGANIZATIONS HABITAT FOR HUMANITY CHARLOTTE & 8 REGIONAL HABITAT

AFFILIATES AMOUNT APPROVED Total $188,000 APPROVAL DATE(S) (1) $45,000 December 2009 (2) $143,000 March 2011 PROJECT DESCRIPTION (1) The affiliates sought consulting assistance and facilitation for a

process to identify potential models for shared services, programs and/or operations

(2) Following the successful completion of the assessment phase, the affiliates sought funding to: hire an alliance manager to implement low-complexity opportunities and manage a process to consider mid-to-high complexity collaboration projects; continue to utilize their consultant to facilitate monthly meetings as well as meetings with volunteer boards, and help create an MSO; and retain NPower to produce a technology assessment and consolidation plan

OUTCOMES TO DATE New level of trust and familiarity amongst affiliates Assessment grant permitted the creation of framework to

facilitate significant collaboration going forward: highest areas of interest found to be in purchasing/warehousing construction materials; seeking/sharing in-kind gifts; marketing, particularly ReStores; fundraising; back office services; and training applicants, homeowners & volunteers

Project is being monitored closely by Habitat for Humanity International which may apply model in other Habitat markets

Affiliates submitting joint annual request to vendors for in-kind construction materials, rather than individual affiliate as-needed requests throughout the year

Plans to submit joint funding requests to Charlotte region foundations, corporations and individual major donors

Shared staffing plan in progress with some aspects already

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implemented (e.g. Habitat Charlotte construction site supervisor utilized by Habitat Lincoln County)

Informal sharing of information resulting from increased collaboration has already resulted in back office benefits. For example, Habitat Charlotte saved $37K upon changing to Our Towns Habitat insurance vendor; termite inspection costs different for each affiliate, so exploring utilization of single vendor with negotiated price; mortgage servicing costs also disparate, so Habitat Charlotte attorneys extending service area to include North Meck

Shared ReStore advertising and marketing currently being tested, including radio, newspaper and billboards

Since CCF involvement, affiliates meet each month for strategic discussions, and intention to have affiliate boards meet together 3 times per year

Have created job description for Alliance Manager (aka Catalyst Director) who will be responsible for helping to create joint purchasing and assist with solicitation of large donations; ReStore advertising; and staff gatherings to share best practices, policies, etc.

Work with NPower towards the creation of a common platform of information technology that will permit the affiliates to conduct similar data collections and better measure results, as well as save costs that would have gone towards subcontracting for IT services

LEAD ORGANIZATION LEGAL SERVICES OF SOUTHERN PIEDMONT

PARTNERS International House, Legal Aid of NC, Latin American Coalition, Mecklenburg County Bar Association, Charlotte School of Law, and several private immigration attorneys

AMOUNT APPROVED $26,000 APPROVAL DATE December 2010 PROJECT DESCRIPTION Organizations have been participating in an Immigration Working Group

(IWG) for two years. Grant to assist the IWG assess feasibility of establishing a structured collaborative plan for providing immigration legal services.

OUTCOMES TO DATE Created inventory of local resources directed at representation in immigration law matters

Identified key findings including a need to increase awareness among the immigrant population and immigration Court staff of availability of IWG services; gaps in continuum of services in outreach, education, triage and referral; and need to cultivate sources of volunteer representation

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Conducted national survey of best practices in multi-agency collaboration around immigration representation

Selected the “master calendar coordination” model for a pilot phase, which combines volunteer recruitment, resource and referral, intake, triage and assessment, and evaluation to meet the legal needs of immigrants in removal proceedings

Quickly moved from assessment to planning & implementation of a pilot project

In one month, pilot had 26 volunteers (20 attorneys and 6 interpreters) serve 131 clients who presented to removal proceedings without representation; each of the four days of hearings were covered by at least 1 volunteer attorney

Several trends identified early on in pilot: ¾ of immigrants triaged were assessed to have potential relief beyond voluntary departure; pool of interested experienced immigration attorneys not sufficient to cover each hearing at the one day per month goal of the pilot; 90% of immigrants surveyed viewed the services as beneficial

IWG hired program director for pilot who continues to direct the project

Pilot extended due to positive results, but post-Catalyst grant, sustainable funding not yet identified (as of July 2011)

LEAD ORGANIZATIONS MECKLENBURG COUNTY

PARTNERS Lead agencies: Communities in Schools, A Child’s Place, Melange, Thompson Child & Family Focus, Charlotte Housing Authority, and Mecklenburg Department of Social Services

AMOUNT APPROVED $100,000 APPROVAL DATE July 2010 FUNDING PHASE Implementation FUNDING APPROACH Shared Services PRIORITY SECTOR Yes – Social Services PROJECT DESCRIPTION Data warehouse pilot project for human service agencies to achieve

a coordinated continuum of services for clients of overlapping programs. Once viability of pilot has been validated, could expand to include service additional providers.

OUTCOMES Pilot project launched at Reid Park Elementary School in January 2012 – Reid Park Collaborative Initiative

Lead agencies provide intensive family case management to at-risk students, which includes a range of services and resources (“wrap-around” services)

System of care philosophy involves collaboration across agencies, families and youth

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50-60 support agencies have agreed to provide a “system of care” framework of support

Among the support agencies are: Mecklenburg County Library, Parks & Recreation, MeckEd, Goodwill, Care Ring, United Way, YWCA, YMCA, Freedom School Partners, Social Venture Partners Charlotte, POST, Crisis Assistance, and faith community participants

150 of Reid Park’s 800+ students identified to date

University of North Carolina Charlotte has developed initial evaluation framework, including a logic model and associated outcomes; evaluation will commence with service provision (data already collected from parents affected) and is expected to be finalized by spring 2012

Plan includes identifying additional data needs, establishing parental involvement initiatives, promoting community engagement and re-opening of Amay James Recreation Center

2012-2013 school year will bring evaluation of pilot year and appropriate changes to the model for broader implementation, perhaps to additional CMS schools

DOCUMENTATION Reid Park Collaborative Initiative Report to the Board of Education, January 10, 2012, http://cfcrights.org/wp-content/uploads/2011/10/BOE-Presentation-Reid-Park-Collaborative-01-10-12.pdf

LEAD ORGANIZATION MEN’S SHELTER OF CHARLOTTE

AMOUNT APPROVED $200,000

APPROVAL DATE December 2009

PROJECT DESCRIPTION Post-implementation of merger between Emergency Winter Shelter and Uptown Shelter, including direct merger costs and expansion of services.

OUTCOMES TO DATE Merger permitted integration of emergency shelter services and case management services to create single client services delivery system for homeless men

No homeless man was turned away to date post-merger; all given safe, stable shelter; and all have access to supportive services

Comprehensive 4-year strategic plan completed to provide the vision for future of organization with goal of growing services to provide homeless men a way out of homelessness

CCF funds alleviated immediate financial pressure post-merger and allowed time to create comprehensive development plan in April 2010

CCF grant permitted implementation of important merger transition projects including financial and fundraising database consolidation,

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marketing and branding of new agency name, staff development activities, and facility improvements

CCF grant funded staff training that permitted organization to put 300 individuals into supportive housing (up from 125 the previous year)

CCF grant funded major kitchen renovation that permits organization to meet increased capacity of shelter – vital to ability to provide basic services to clients

CCF grant helped Men’s Shelter leverage additional significant funding from other sources in community

DOCUMENTATION Men’s Shelter of Charlotte Comprehensive Strategic Plan, January 2011-December 2015 http://www.mensshelterofcharlotte.org/pdf/strategic_plan_2011-2015.pdf ; and Men’s Shelter of Charlotte Client Services Outcomes FY 2011-2012 http://www.mensshelterofcharlotte.org/pdf/MSC%20Outcomes_Revised_28Sep11.pdf

LEAD ORGANIZATIONS MULTI-FAITH HOUSING INITIATIVE

PARTNERS Local affordable housing and homeless agencies

AMOUNT APPROVED $135,000 APPROVAL DATE December 2011 PROJECT DESCRIPTION Agencies formed coalition to recruit faith congregations to move

“beyond casseroles”(i.e. food donation) to actual financial investments to prevent and end homelessness

OUTCOMES Initiative expected to launch February 2012

Faith congregations will be recruited to donate the cost of assigning social workers to homeless families

Represents first faith collaborative effort for CCF

Intention is to accelerate supportive housing collaborations and scattered sites via shared intake and coordination of faith resources by the housing and shelter network of agencies

Initiative will streamline organizational interaction with volunteers and create a standardized plan for each congregation

9 month plan developed with a goal to move about 60 families into apartments, each family with a congregation sponsorship

Funds cover cost of project manager, volunteer coordinator, housing coordinator and some start-up costs

Intention is to pursue long-term sustainability through collaboration among agencies, governments and faith community

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LEAD ORGANIZATIONS NPOWER

AMOUNT APPROVED $264,800 APPROVAL DATE December 2010 PROJECT DESCRIPTION Grant to invest locally in NPower to expand current business line to

include technology training for nonprofits. Specifically, project to include (1) User groups: quarterly meetings of 20 nonprofit professionals, 5 groups of over 3 years, and 100 organizations over 3 years; (2) Onsite coaching: match corporate volunteer one-on-one with nonprofit staff, two hour coaching session on specific issue, already subject of successful pilot, anticipate over 400 nonprofit staff to benefit over 3 years, 2-6 corporate partners with 48 volunteers each projected; and (3) Collaborative, highly strategic project grants: unique game-changing technology projects that increase nonprofit efficiency, approximately 5 projects supported. Grant emerged from CCF MSO Task Force work.

OUTCOMES Focus on reusable technology solutions and shared services Driving permanently positive change via strategy (10

technology executives framing IT vision for nonprofits including Cloud computing, mobility, analytics, social media); implementation (5 scoped projects), and support and training

Significant progress toward goal of improving the technology skills of nonprofits (3 user groups representing 50 agencies, 80 staff coached at 14 different agencies with 35 volunteers totaling 155 hours of coaching)

Example: Launched Joomla! User group that gives nonprofits ability to self-publish, reduces fragmentation of website tools, and drives revenue through analytics (22 nonprofits using Joomla! for website, 20 members involved in user group), inspires sponsorship from corporate community

Demonstrating the power of technology to advance mission through targeted projects – these projects and associated methodologies serve as groundbreaking examples for the sector

Examples: Latin American Coalition launched text-messaging project for its constituent base of 13,000 Latinos in Charlotte. Kids Voting also adopting methodology to develop a program for engaging CMS high school students in 2012 election activities

Survey conducted to identify nonprofit needs and see where to focus next; 10-15 project ideas generated that could be ready to launch, and currently funding for 5 that will create momentum

Community Technology Vision being developed in

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partnership with Chief Information Officers and technology executives in the corporate world – will provide strategy for addressing fragmentation of technology in nonprofit world

Intent to publish paper on the results of the study DOCUMENTATION WBTV – iPads Help Kids Communicate -

http://www.wbtv.com/story/15158728/using-ipads-to-help-kids-communicate Volunteer sound bites - http://youtu.be/j4KHehgdyeE IT Coaching - http://youtu.be/3Y_iCYcBNWg Tech Teams - http://youtu.be/MsC5ztOnm4g

LEAD ORGANIZATIONS OPERA CAROLINA/CLT SYMPHONY/NC DANCE THEATRE

AMOUNT APPROVED $38,000 APPROVAL DATE December 2009 PROJECT DESCRIPTION Assessment and partial planning phase for the creation of a shared

services model in the form of a partnership consortium in order to improve efficiencies in administrative and production budgets, possibly create opportunities for new revenue, and perhaps even improved mission benefit. Specific areas examined included (1) shared services/joint expenditures (2) alternative box office solutions (3) collaborative marketing efforts (4) collaborative education and outreach programs and (5) creation of an office of coordinated services.

OUTCOMES Worked with Nonprofit Finance Fund to conduct financial assessments and program profitability analyses for each organization, as well as research and benchmarking of similar projects and/or solutions in other cities and organizations

Also conducted financial analysis and review of proposed ideas in relationship to each organization’s current operations

One purpose of assessment was costs/benefits of a variety of shared services, but data did not support implementation now because “such alliances require financial preparedness and staff capacity” not currently present in the three orgs

Study recommended that each organization focus on own balance sheets & identify capital assets needed for sustainability

Study did recommend that the 3 orgs pursue alternative box office solutions (i.e. improve relations with PAC to get better box office services, technology capability and data integration)

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Study suggested that cost-effective & successful collaborative marketing in Charlotte would require participation of more than the three orgs to be viable – ASC involvement needed

Collaborative education and outreach was found to be a good idea, but given current economic climate is not a near-term opportunity for collaboration

An office of coordinated services not possible at this point due to economic strains on all 3 orgs since new entity would compete for funding & serve as an unnecessary distraction from more urgent matters

Study findings provided sobering information, but also served as documented proof that the 3 orgs were operating as lean as possible and dispelled notion of inefficiencies; galvanized volunteer leadership to focus on long term capital planning

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LESSONS LEARNED If Catalyst participants were asked to identify one enduring theme of their experience, the most common response would likely be to expect the unexpected and be prepared to adapt accordingly. All of the lessons learned, to one extent or another, evidence this sentiment. The program has truly been a learning experience on numerous levels. The Catalyst Fund members and staff believe that the lessons enumerated below will serve as a guide for future activities aimed at the long-term sustainability of the nonprofit sector here in Charlotte, as well as for similar efforts in other communities across the nation.

CCF “Walks the Walk” of Collaboration

It is important to keep in mind that CCF represents an entirely new type of grantmaking body in the Charlotte community. Never before have the diverse voices of the major funders and thought leaders involved served together in this sort of capacity. Not only did grant applicants have no experience working with a funding body with such breadth of representation, but also the committee members themselves were new to making decisions together as one entity. Moreover, FFTC staff was also in uncharted territory in the management and administration of this unique funding organization. No single voice predominates over others in Community Catalyst Fund meetings. The groups’ discourse is characterized by a thoughtful and deliberative approach with opportunity for each individual to contribute. The remarkable composition of the membership does, however, pose some challenges. Logistically, coordinating the members’ schedules for meetings has proven to be a difficult task. Additionally, considering that as an aggregate CCF represents over a dozen organizations – each with different priorities and perspectives – the fact that many important collaborative initiatives have resulted from their deliberations is quite a significant achievement. The uniting premise is the desire to collectively enable the nonprofit sector to find long- term sustainability in the new reality in which the entire community is living. To achieve this mission, CCF utilizes the very same conventions utilized by their grantees in working collaboratively:

Flexibility in pursuing mission Clarity regarding the desired outcomes Positive and trusting relationships with partners Willingness to take risks

Collaborations fail most often when potential partners hold onto their individual cultures and identities rather than creating a new organization. It can truly be said that Community Catalyst members have learned that success in their endeavor requires that they not only talk the talk of collaboration, but also walk the walk.

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Funding Collaboration Involves Risks & Surprises

Any evaluation of Community Catalyst Fund must include a reminder that the roots of the program lie in the unpredictable and high-risk world of venture capital. The foundational concept of “angel investors” – providing seed money to fund innovative projects – is necessarily a proposition laden with unknowns. Some innovations will be hits, others will be misses, and some will produce unexpected, even surprising results. Part of CCF’s value proposition is the long-term potential to strategically transform the entire nonprofit sector by enabling innovation where it would otherwise not be possible. Gauging success in the Catalyst world, therefore, requires both a broad and long-term view. Seed money is exactly that – funding that supports nascent opportunities.

Some crops will fail to grow – Mecklenburg Open Door could not have been saved regardless of Catalyst investment.24 In addition, due diligence may result in the finding that some projects that have merit simply are not viable. For example, a struggling Charlotte social service agency with many worthy programs sought support from CCF, but upon review and in consultation with staff and partners, Catalyst Fund found the organization to be lacking in the wherewithal to save the programs, regardless of additional funds. The failure of an individual grant or the finding that a project simply isn’t feasible should not be judged simply on the end result. Rather, it is important to look at the information gleaned from the initiative and how those learnings can inform actions going forward.

Time from planting to harvest may be longer for some seeds – Conditions may not be ripe initially, but over time could take root. For example, projects that require significant political willpower require particular patience (e.g. City-County consolidation). In other instances, the nonprofit may not have yet reached a pain point sufficiently high to prompt the pursuit of innovation, and organizations will “stay the course” of staff cuts, program reductions and other incremental steps until their very survival is threatened before they pursue truly catalytic ideas.

Sometimes the seed planted doesn’t result in the expected crop, but yields something

entirely different – In the instance of the feasibility grant to Opera Carolina, Charlotte Symphony and NC Dance Theatre, the study found managed services for the three organizations was not viable, but other collaborations have resulted (e.g. the Tchaikovsky Festival scheduled for March 2012, and discussions of a shared box office solution). Two early grants to WISH and Charlotte Emergency Housing resulted not in strategic partnerships with the partners of those initial grants, but rather a merger to become a new organization with each other.

The earlier grants discussion in this report delineates many quantitative and direct outcomes resulting from Catalyst grants. CCF grantees invariable point to other outcomes that are more difficult to measure outcomes, but are nonetheless highly valued. For example, new relationships and trust among formerly separate and distinct operations and

24 Mecklenburg Open Door (MOD) received a $125,000 implementation grant from CCF in April 2010 to fund a merger with the potential for restructuring the mental health care sector. MOD’s board of directors returned $119,000 to CCF shortly after embezzlement charges were filed in September 2010 against the former executive director of the organization, who was subsequently indicted.

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individuals; potential opportunities yet to be developed, but envisioned as a result of the initial collaborative effort; and information to share with other organizations considering strategic partnerships. Assessing the value of these latter outcomes is as important a measure of success as the more easily identified and immediate return on investments.

Changing Mindsets Takes Time

Outreach and education work was the first priority and funding focus of the Catalyst program. The study of the nonprofit landscape identified the vital importance of getting the conversation started in the community about the many possibilities for strategic partnerships, collaboration, and innovation in the nonprofit sector. As a result of numerous outreach investments, CCF has created a new vocabulary in Charlotte over the course of the last two years. Notwithstanding the fresh lexicon, CCF members and staff continue to hear divergent definitions of collaborative terms depending upon who is speaking – funder, nonprofit staff, or volunteer leader. For example, although most of CCF’s investments have not been directed towards full-blown mergers of organizations, many in the nonprofit world were initially skeptical that this type of consolidation was – in fact – the ultimate goal of the initiative. This misconception may have inhibited some nonprofits from thinking outside the box and pursuing funding for collaboration. CCF has also encountered a tendency among nonprofits towards a “keeping the lights on” mentality, which has proven to be another stumbling block to innovative thinking. The remarkably high pain points that nonprofits are able to endure have surprised funders. The good news is that despite deep staff and program cuts, very few nonprofits have actually had to close their doors. On the other hand, this lean operating model necessitates all eyes on the bottom line, leaving little time to explore strategic discussions about the organization’s long-term future. CCF has found that attracting strategic collaborations is difficult in this environment. An additional stumbling block CCF has encountered repeatedly throughout the initiative is an inconsistent level of leadership in nonprofit boardrooms. In several instances, executive directors and staff recognized the value and need for exploring collaboration, but volunteer leaders did not embrace such efforts. Volunteer leaders may not fully appreciate their broader responsibility to the community beyond their fiduciary duty to the individual organization – a sort of “head in the sand” stance that can impede organizational innovation. As two nonprofit budget cycles have now come and gone with little nonprofit attrition, CCF must consider that perhaps the program was instituted prematurely. In other words, because most nonprofits have been riding out the recession without strategic restructuring, the sector may not have been ready to embrace the opportunities offered by the Catalyst program. However, given the continued and resurgent economic crisis, CCF anticipates that more organizations are at risk today than ever before. Perhaps the value of collaboration and strategic restructuring in the nonprofit sector will only be realized if (or when) agency closings become more widespread. One grantee suggested that perhaps the mindsets won’t truly change in the nonprofit sector until a highly visible organization fails. If such a calamity is required to change nonprofit mindsets,

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then hopefully the lessons learned and roadmap created by CCF investments will provide useful guidance in the future.

True Collaboration Can Be Elusive

Intimately related to the difficulty of changing mindsets is the fact that attracting compelling projects has proven to be much more difficult than anticipated. The expectation at the beginning of the Catalyst program was that the potential dollars associated with the Fund would inspire the nonprofit community to think in bigger and broader ways. Simply put, that didn’t happen – many of the projects proposed were either operational or new programming with additional partners. Teasing out true collaboration has proven to be an extremely time and labor-intensive process for the Catalyst program. Even after CCF outreach efforts, and the revision of the investment strategy over time in an attempt to better communicate and define true collaboration, the “big ideas” continue to be few and far between. As evidenced by the preceding discussion, CCF is pleased with the investments made to date, and among the initiatives funded are many extraordinary collaborations. Nevertheless, CCF staff and members agree that attracting truly catalyzing opportunities – large scale and sector changing – continues to be an elusive goal. For this reason, CCF decided in June 2011 to turn the gaze inward to permit greater committee member input into developing catalyzing concepts. CCF staff met with individual members to elicit their thoughts on how the program should invest going forward. Some of the ideas were organization-specific while others were sector-oriented, and still others involved more general investments. The group determined that going forward no grant application would be necessary; rather proposals detailing opportunities may be submitted for review, discussion and vote by the full Catalyst committee. This more proactive method resulted in several additional valuable investment opportunities occurring at the end of 2011, and will form the basis for future CCF funding.

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CONCLUSIONS Charlotte is a community in which “no challenge is wasted”. The Community Catalyst program began in a time of crisis, great uncertainty and fear. The initial actions of CCF were – in many respects – reactions, rather than proactive responses to the new reality. Over time, the Catalyst program evolved and adapted to be better positioned to address the long-term needs of the nonprofit community. A look back to the beginning of the Community Catalyst program provides the opportunity to more clearly appreciate the significant outcomes of CCF investments to date:

CCF’s first significant investment – the 2009 study of the nonprofit landscape – continues to benefit the community and inform the actions of CCF through the identification of collaborative opportunities.

Nonprofits and funders are increasingly speaking the same language as they navigate through the continuing rough economic environment.

The emergence of an investor mindset among funders and willingness to take risks as well as expect surprises.

Participants acknowledge a less prescriptive and more interactive engagement between grantees and funders.

CCF grants have directly shaped the merger of eight nonprofits into three new organizations, and others may follow.

Several Catalyst investments have the potential to inspire sector-changing innovations. The program has been the primary investor and catalyst for collaboration in several

projects that would not have occurred, but for the existence of the program. CCF investments serve as leverage points for additional funding from non-CCF sources

to grantees. CCF has become a national model for similar efforts in Boston, Minnesota, Florida,

Arizona, San Francisco and New York. An evolving emphasis on documenting CCF investment outcomes has resulted in a

library of best practice maps and other permanent resources that will continue to guide nonprofit collaborations beyond the life of CCF.

In the face of an economic crisis unparalleled since the Great Depression, the Charlotte community saw opportunity – opportunity to create a new philanthropic model for funding nonprofit innovation. The effort has not been without challenges, but the lessons learned and accomplishments achieved will benefit the Charlotte region – and potentially other communities – for years to come.

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BIBLIOGRAPHY OF CCF RESOURCES

1. PowerPoint presentation of the Bridgespan study,

http://www.thoughtbox.org/content/innovation-collaborations-and-consolidations-getting-conversation-started

2. Foundation For The Carolinas Directory of Professional Consulting Resources, http://www.fftc.org/page.aspx?pid=2122

3. CCF Managed Services Task Force report, http://www.thoughtbox.org/content/shared-

services-work-surprise-findings-charlotte-mecklenburg-nonprofits

4. Men’s Shelter of Charlotte Comprehensive Strategic Plan, January 2011-December 2015, http://www.mensshelterofcharlotte.org/pdf/strategic_plan_2011-2015.pdf ; and Men’s Shelter of Charlotte Client Services Outcomes FY 2011-2012 http://www.mensshelterofcharlotte.org/pdf/MSC%20Outcomes_Revised_28Sep11.pdf

5. Jacobs, Roslyn-Allison and Morris, Carol and Page, Charles, Assessment of Community

Services in North Mecklenburg and South Iredell Counties, April 2011 (contact Ada Jenkins Center)

6. Morris, Carol and The Lee Institute, Workforce Development Sector Analysis: focusing

on Workforce Development for Adults with Barriers to Employment in Charlotte-Mecklenburg, http://www.dukemansion.com/leeinstitute/ourwork-T.html

7. Charlotte Family Housing, What is Charlotte Family Housing?,

http://www.charlottefamilyhousing.org/ourstory/what-is-ceh-about/

8. The Lee Institute and LaPiana Associates, Future of the Library Task Force Final Report, Mecklenburg County, North Carolina, March 2011, http://www.thoughtbox.org/content/future-library-task-force-final-report

9. Tides, Shared Services That Work: Surprise Findings from Charlotte-Mecklenburg

Nonprofits, 2011, http://www.thoughtbox.org/content/shared-services-work-surprise-findings-charlotte-mecklenburg-nonprofits

10. WBTV, iPads Help Kids Communicate, http://www.wbtv.com/story/15158728/using-

ipads-to-help-kids-communicate Volunteer sound bites, http://youtu.be/j4KHehgdyeE IT Coaching, http://youtu.be/3Y_iCYcBNWg Tech Teams, http://youtu.be/MsC5ztOnm4g

11. The Lee Institute and Bridgespan Group, The State of Out of School Time in Charlotte-

Mecklenburg County 2011 http://www.thoughtbox.org/content/overview-out-school-time-children-and-youth-charlotte-mecklenburg-county