Indiana Philanthropy Alliance

© 2013-2018

Indiana Philanthropy Alliance

COMMUNITY FOUNDATION ORIENTATION

DEFINITION OF A U.S. COMMUNITY FOUNDATION Nonprofit, tax exempt

under section 501(c)3

Independent, non-

sectarian governing body

Publicly supported by

many unrelated donors

Goal of building

permanent component

funds

Benefits the residents of

a defined geographic

area

Supports broad-based

charitable interests

Serves in leadership role

on community issues

COMMUNITY FOUNDATION HISTORY

1914 - First community foundation established in Cleveland,

Ohio. Within five years, community foundations formed in

Indianapolis, Chicago, Boston, Milwaukee, and Minneapolis

1969 - Tax Reform Act • private foundations more strictly regulated (5% payout)

• community foundation became an attractive option

1976 – Treasury Dept. clarified public charity status of CFs

In the 1990s, financial services firms, such as Schwab, Fidelity

and Vanguard, began to offer donor-advised funds

1990s-today – increasing emphasis on CF role in community

leadership

GIFT HISTORY

Created by Lilly Endowment in 1990

Establish permanent charitable assets across Indiana

Support local communities and build civic participation

Series of 6 grant phases

Additional programs – Taking Stock, CAPE, SRD, interns

Unique program in community foundation world

Currently Indiana has 74 legal entities covering all counties

All Indiana CFs - Over $3.2 billion in assets

A commitment to ethical behavior

A welcoming and inclusive environment

A spirit of openness and collaboration

A desire for continuous learning and innovation

Appreciation for geographic boundaries

Celebration of success

October 2016

INDIANA COMMUNITY FOUNDATION CULTURE

Indiana Community Foundations

Provided by CF Insights

Community Foundations – The Really Big Picture

GOVERNING BOARD Goals, Direction, Policy

STAFF Management and Program Implementation

DONORS GIFTS FUNDS INVESTMENTS PAYOUT/

DISTRIBUTIONS

Individuals

Corporations

Private foundations

Charitable

organizations

Cash

Appreciated Securities

Real Estate

Closely held securities

Personal property

Life insurance

Retirement assets

Wills and bequests

Unrestricted

Donor Advised

Field of Interest

Designated

Scholarship

Charitable

Organization

Operating

Supporting

Organizations

Investment Policy

Spending Policy

Grants for charitable

activities

Administrative fees to

support CF operating

budget

Community foundation

ASSETS

Governed by the

FUND

AGREEMENT

FISCAL

RESPONSIBILITY Fulfilling DONOR INTENT

Through this activity, a community foundation gains connections, visibility, knowledge,

credibility, influence and resources to provide COMMUNITY LEADERSHIP

© 2013-2018 Indiana Philanthropy Alliance

IT’S ALL ABOUT STEWARDSHIP

The careful and responsible management and protection of something considered worth caring for and preserving

What are we “stewarding”? Finances

Relations with donors

Grants

We are all just temporary stewards of an extraordinary community asset.

Ken Gladish, President

Central Indiana Community Foundation, 1994-2000

“ “

Created by the field

Administered by the National Standards Board

Voluntary; fee for program

Have been in place since 2005

Value Proposition Help define a CF for the public (donors especially)

Provide a “Good Housekeeping” seal of approval

Provide a mechanism for industry self-regulation

Revised National Standards released 2014

New streamlined document submission process

National Standards for Community Foundations

Permanent endowment building Develop relationships with donors

Invest and protect the principal of gifts

Distribute grants based on charitable intent of the donor

Broad, flexible grantmaking Understand community needs

Re-direct charitable dollars as community needs change

Can be proactive or responsive

Community leader Many different ways to play a leadership role

COMMUNITY FOUNDATION ROLES

PERMANENT ENDOWMENT

Long-term rather than immediate

Based on donor interest rather than organization’s

program

Few gifts, generally large, rather than numerous, small

gifts

High use of planned and estate gifts rather than outright

cash or occasionally securities

Often involves whole family rather than just one person

Builds gifts into ever-growing pool of permanent funds

rather than starts over every year

ENDOWMENT BUILDING OR FUNDRAISING?

Most Charitable

Organizations

Fundraising

vs Community Foundations

Must convince a donor to give to

organization’s specific cause

Offer to assist donor with fulfilling

their charitable wishes or legacy

Annual appeals, continually asking Building long-term relationships

Lots of events Small, intimate gatherings

Small, numerous gifts Larger gifts, especially estate gifts

Relationship management Stewardship and service

Asset Building in Community Foundations

More of an OFFER than an ASK

ASSET BUILDING IN COMMUNITY FOUNDATIONS

Cash, checks, credit card gifts

Publicly traded stock and mutual funds

Tangible personal property

Agricultural products

Intellectual property (intangible property)

Land

Business Interests • Closely-held and restricted stocks

• Privately-held businesses and S-Corps

• Limited partnerships. LLC

Complex gifts can be great opportunities…Consult an attorney

GIFTS

Donors are involved in directing how their funds support charitable organizations by establishing one of the following fund types: Unrestricted Fund (or Discretionary Fund)

Field of Interest Fund

Designated Fund

Donor Advised Fund

Discretionary Scholarship Fund

Committee Advised Scholarship Fund

Advised Charitable Organization Fund (a.k.a. Agency Fund)

“Community Project Fund”

Supporting Organization

FUNDS

A group of individuals determine a solution to a community

need

The group does not have 501(c)(3) status

Use the community foundation for donors to make charitable

gifts

Can be a one-time project or a start-up program

Grants made to vendors for specific charitable purpose or

program

Determine liability issues

Expenditure responsibility required

Community Project Funds (aka fiscal sponsorship)

GRANTMAKING

The Community Foundation is knowledgeable about local community resources and needs.

Areas of interest include: Arts and Culture

Civic and Historical Affairs

Community Development

Education

Environment

Health and Human Services

Recreation

BROAD, FLEXIBLE GRANTMAKING

Program support – to

fund an existing program

or start a new one

Operating – grant for

general operations of a

nonprofit

Capital – buildings,

furnishings or equipment

Capacity-building – to

improve the functioning of

a nonprofit or a

collaborative

Planning or research

Evaluation/assessment –

for one or multiple

organizations

GRANT PURPOSE

Responsive Grantmaking Community foundation “responds” to community requests

Open process, broad criteria

Keep foundation connected to their community – your R&D

function for new ideas, emerging trends, new talent

It’s a good thing!

Proactive or Strategic Grantmaking Grantmaking with “intentionality”

Can take many different forms

COMMUNITY LEADERSHIP

Community foundations have knowledge, connections, influence

and resources that can be used for positive change in a

community, however…

Every community must assess its capacity for leadership before

jumping into this role. It’s time intensive work and reputation and

trust are crucial to success.

Building Blocks of Community Leadership (from CFLeads)

Values, culture and will

Relationships

Resources

Understanding and skills

COMMUNITY LEADERSHIP ROLES & GOALS

Community Engagement

Examples Participating in community activities and organized by other

groups or institutions

Sponsor a community event or activity

Considerations Easy to do

Everybody wants the CF “at the table” so be cautious about

overextending

Good way to learn about community, forge relationships

Donors and board members can be active connectors

(remember Triple “A” board framework)

Bridge for Communication

Examples Bring together a few grantees with similar missions to create

relationships

Publish issue briefs on needs, interviews with key nonprofit

leaders on trends

Considerations Fairly easy to do; not much risk

Do a little background work to make sure you are not

walking into some bad history

Provide a Product or Service

Examples Provide training or other capacity-building opportunity for not-

for-profits

Host a speaker on philanthropy or more specific topic

Considerations Involves additional cost and staff time

More public visibility

Not much risk

Speakers can be a draw for prospects and donors

Be careful about thinking your staff can do capacity-building

– most often best to farm it out

Proactive/Strategic Grantmaking

Example Allocate a portion of unrestricted grantmaking to a particular

issue, area, need or opportunity

Focus grants on a particular geography or population

Considerations Constructing the “strategy” and defining intended results can

be positive but time-consuming

Moves into a more political arena both internally an externally

Community Convener

Example Organize a community meeting to discuss an issue or

opportunity

Facilitate peer learning groups to improve knowledge and

skills

Considerations Much more public

Needs considerable preparation to go well

CF will be perceived as having some ability to follow

through on whatever happens

Think about the end game

Community Initiative

Example CF declares it will address a particular issue

Considerations Enables CF to engage broadly and demonstrate a major “value add”

to the community

Requires significant investment of time and money for which there is

likely no revenue stream - you don’t have to do everything!

Very public; CF reputation can suffer if problem is not “solved”

Possible donor alienation but opportunities for donor to co-lead

Possible political controversy

Community project funds could play a role here

BOARD MEMBER AND VOLUNTEER RESPONSIBILITIES

Legally, the board of directors IS the corporation. The

board engages staff to carry out organizational

activities

A board of a community foundation represents the

stakeholders (the community) similar to how the board

of a for-profit company represents the shareholders

(owners)

The board composition should reflect the composition

and diversity of the community

WHAT IS A BOARD?

Under the laws of most states, board members have these

responsibilities –

Duty of Care A board member must exercise reasonable care when he or she makes a

decision as a director of the organization

Duty of Loyalty A board member must give undivided allegiance when making decisions

affecting the organization. A board member can never use information obtained

as a member for personal gain

Duty of Obedience Board members may not act in a way that is inconsistent with the central goals

of the organization

LAW FOR NONPROFIT BOARDS

To carry out the vision and mission of the Community

Foundation, with respect to the region it serves

Encourage and responsibly manage charitable dollars

Review, recommend and investigate grants and their

impact

Be guided by good faith and judgment about the best

interest of the Community Foundation with respect to

matters of:

• Decisions regarding investment of assets

• Charitable distributions

• Relationships with donors

• Tax compliance

• Solicitation of new donor funds and assets

BOARD ROLES & RESPONSIBILITIES

Board members –

Are ideally positioned to build relationships

Provide visibility because of their various

roles in the community

Provide credibility

BOARD ROLES IN ASSET DEVELOPMENT

TOOLS TO HELP BOARD MEMBERS

Dashboards with key info can help you understand

your community foundation’s activities

Small ‘pocket cheat sheet’ cards with key info about

the community foundation can help ease your

performance anxiety

Rehearsing an elevator speech

Role play

KNOW YOUR FOUNDATION

Commitment and a little Homework

Dashboards with key info can help you understand

your community foundation’s activities

Small ‘pocket cheat sheet’ cards with key info

about the community foundation can help ease

your performance anxiety

Rehearsing an elevator speech

Role play

Visit with grantees

Visit with donors

ELEVATOR SPEECH ACTIVITY

Break into three groups

Take 5 minutes to develop an ‘Elevator Speech’ for your community foundation

An elevator speech is a short summary

used to quickly and simply define a person,

profession, product, service, organization or

event and its promise of value to be delivered

and a belief from the customer that value will

be experienced.

COMMUNITY FOUNDATION INTERNSHIP PROGRAM

Provide college students with real-life

work experiences in Indiana

To build healthy community foundations

in Indiana

Encourage and develop philanthropy in

Indiana

GOALS

WORKPLACE ETIQUETTE

Simulation of a real job

Attendance is important

Arrive at work on time

Dress in business attire

Be courteous and professional

Communication with supervisor is key

COMMUNITY FOUNDATION INTERNSHIP FACEBOOK PAGE

The Executive Director must give the interns approval to join the

group.

Interns may connect to the group page by searching “Indiana CF Interns” or by going to this link: http://www.facebook.com/groups/IndianaCFI/

Interns may join the group through their personal FB account, but profile pictures must be socially appropriate or they will not be accepted.

Interns cannot post anything of a personal nature such as personal information, pictures, video links, documents, etc. Postings may ONLY relate to community foundation specific work in which they are involved.

All postings must have the prior approval of the Executive Director.

The Executive Director must make certain that any materials, videos, etc. are not subject to copy write limitations. If we think there may be an issue, the item will be removed and we will follow-up with the Executive Director.

The group will be administered and monitored by the GIFT staff who may remove any group member or posting at any time.

You may send questions regarding the group page to Belinda Scholl at bscholl@inphilanthropy.org or call 317-630-5200 x129.

Reporting Requirements:

Community foundation program narrative

Student program narrative (Email/Online) How has your internship experience impacted both the

community and the community foundation?

How did you learn of this internship opportunity?

Was the CFI internship orientation session useful?

How has your experience affected the likelihood that you will:

1. Volunteer in your community in the future

2. Contribute financially to charitable causes

3. Pursue a career in the nonprofit sector

Due 30 days after last day of internship.

Contact Terri Johnson at tjohnson@inphilanthropy.org or by phone

317-630-5200 ext. 128 with questions.

QUESTIONS?