Building the Next Century of Community Philanthropy - Vikki Spruill at the 2014 Fall Conference

Monday, October 20, 2014

The Centennial – A Year of Action In Support of Community Philanthropy

While we’re officially commemorating 100 years since the founding of the Cleveland Foundation, this Centennial moment matters for the entire field because philanthropy can’t be successful without strong and vibrant community foundations. The centennial gives us the opportunity to think about the importance of place and how far place-based giving has come.  Today, I want to talk with you about how the Council is positioning community foundations for a second century of excellence.

As I’ve traveled the country, I have seen the work of community foundations in action – a community development program in Reading, a neighborhood strengthening program in Flint, a financial education program in Silicon Valley. Whenever I get frustrated, I draw inspiration from the time, energy, and talent you are contributing every day.

Working from the Centennial Plan created in 2010, the Council has structured this year of action around the short and long term needs of place-based funders.

Over the Centennial year, we’ve done a lot to facilitate learning in the field. For example, in partnership with the Council of Michigan Foundations, we released marketing resources on the Centennial that community foundations have used to call public attention to the good work they do every day.

We also jumpstarted a yearlong story-telling project, called #CF100. Over fifty foundation leaders from across the country submitted stories of impact on a range of issues facing community foundations, like donor services, deploying capital, and aligning social action.  I hope you will join the over 65,000 visitors who have already viewed this resource on the Council’s website.

In partnership with the Knight Foundation and the Poynter Institute, we created a fun video contest and provided free training on how to create high impact videos on a limited budget. Aiming to help you tell your story, that resource will remain available to the community foundation field, so you can continue to use video to reach new audiences and generate interest in your work. Throughout this conference at Community Central you’ll see some of the great stories that community foundation leaders created using this training.

During this Centennial year of action, we partnered with Deloitte/ Monitor Institute on What’s Next for Community Philanthropy, a cutting edge research program on the future of community foundations. You’ll hear more about that exciting work tomorrow from Gabriel Kasper.

And, of course, I recognize that many of you spend time cultivating new donors, who are increasingly interested in combining financial and social returns. At this conference last year, the Council released a guide for developing impact investing programs. That document came out of some compelling work being done by Kathy Merchant of the Greater Cincinnati Foundation and by Stuart Comstock-Gay of the Vermont Community Foundation. We built out this effort to include a series of trainings conducted with Mission Investors Exchange that are still available as resources to the field.

The Council will continue to facilitate knowledge development and sharing on our new platform, The Philanthropy Exchange. Over 1,300 people have already joined the Exchange. We’ve seen conversations start about everything from governance to funding strategies. If you need help in joining, Allison from our team is available in Community Central throughout the conference to walk you through this product’s value.

Here’s an example of how it works. When the Denver Foundation wanted to open up microfinance opportunities for local social enterprises, their Philanthropic Services team reached out on the Exchange for guidance. They needed advice on how to manage the process, and sure enough, the Rhode Island Foundation, which had funded social entrepreneurs for three years, happily offered to share their insights.

In one conversation, The Community Foundation of the Eastern shore sent out a call for gift acceptance policies. Within 48 hours, 6 policies were sent in, starting a library of financial documents for future users to search and use. We have also imported listservs like FAOG and CEONet to the Exchange as well, so that you have better ways of getting the answers and community you need.  

During this Centennial year, we are also proud to focus attention on the worldwide popularity of the community foundation model. In the last 20 years, over 500 new community foundations have been created outside the U.S. – a clear signal of the remarkable future for community philanthropy and place-based giving. I am grateful that we have over 70 community foundation executives from outside the U.S. here with us today.

Standards of Excellence

As we head into the second century of excellence, we have another milestone to mark at this Conference: the Community Foundation National Standards Board is completing its ten year review process! For over a decade, National Standards have helped community foundations ensure operational effectiveness and fostered excellence in their work.

This program was made by community foundations, for community foundations, and many of us at the Council have been involved in helping the CFNSB make it a success. We now have approximately 500 community foundations that are accredited. Over the last ten years of Standards implementation, community foundations have demonstrated their commitment to excellence, especially because two-thirds of the field is now accredited in this voluntary peer-driven process.

The work began with the Standards Action Team, chaired by Judy Sjostedt. Then the Standards Board, first under the leadership of Hugh Ralston and now Randy Royster, worked tirelessly on this project. Along with the Director of National Standards, Lara Kalwinski, they heard the input of the field and responded with a program that’s easier for you to manage and still maintains a rigorous benchmark of excellence.

In addition to serving as the Director of National Standards, Lara is one of six attorneys working at the Council, all ready and capable to field legal and policy questions from our members. We already field over 100 requests per week from members, so we know how valued these services are. The Council will continue investing in legal resources, I hope you will continue to look to us as a resource for legal and policy expertise.

We can’t forget that Standards were created twenty years ago because of increased scrutiny from policymakers and the public, partially because they didn’t recognize the unique value of community foundations. Simply put, the Standards program helps prove the worthiness and importance of the community foundation model.

Community Philanthropy and Public Trust

Whether you are approaching donors or setting up a community engagement strategy, the success of your work over the next one hundred years ultimately relies on public trust. We see time and again that foundations are often misunderstood or, worse, mistrusted.

I fear that – perhaps more than ever – misunderstanding and mistrust are driving recent proposals in Congress.

Congress has been promising – or threatening – comprehensive tax reform for a couple of years.  There are clear signs that some type of reform will be coming in the next two to three years.  We are seeing incremental but significant signs. And, the council must be at the table now, not at the 11th hour, to realize the best possible outcomes for our field.

One of those signs – a thunderbolt really – that change is on the horizon was the draft tax reform bill that Chairman David Camp introduced earlier this year.  The bill contains more than two dozen provisions that would impact how foundations conduct their work moving forward. Some of these provisions could negatively influence your viability and future.  They address both the individual taxpayers – your donors – and your organizations.

The Chairman’s proposal to severely curb donor advised funds is one of the most outrageous provisions in the draft.  His proposal would require community foundations to completely spend out each contribution to a donor advised fund within five years of receipt, or face a significant excise tax on the remaining balance. 

Rest assured, the Council is aggressively pushing back.

We continue to organize meetings with lawmakers, coalitions of stakeholders in a unified response to this attack.

We have also responded to the urgent need for more information – more data – on donor advised funds because this recent scrutiny is distinct from past critiques. Critics of the past used to focus principally on the aggregate amount that you are distributing to communities. Today’s critics seem more focused on the relationship that community foundations have with their donors and how you manage this relationship and the individual funds.

I can’t over-emphasize how important this shift in thinking is.

To inform our strategy, the Council commissioned a survey on DAF’s from the Urban Institute’s Center on Nonprofits and Philanthropy. The Kellogg Foundation supported this effort, and we also collaborated with the Michigan Council of Foundations.   Hundreds of community foundations participated, and I again want to thank all of you in the room who responded to this survey. 

One of the most significant findings – and one that is resonating on Capitol Hill – is the clear connection between donors and their active engagement in their communities.  You see this every day.  But, having that survey result, coupled with countless anecdotes of how donors are civically engaged, provides us truth against the perception that donors dump their money into DAFs for the tax write off, then allow that money to languish for years – untouched. We now have clear data to show that donors are closely engaging with the communities they support.

The Council policy team has turned this analysis into action. We have new materials we’re previewing at this conference that illustrate how we’ve translated some of the findings into information for policymakers.

Yesterday, almost 70 CEO’s attended our preconference meeting that dove into our strategy to push back on this proposal, including how we’ll assemble our forces and how we’ll message our targeted strategy.  

The efforts to address this DAF provision will take a show of force by philanthropy. We all need to be very clear – putting the future of community foundations at risk puts the future of communities at risk. 

To secure the next century of achievement, we must have a unified voice, a drum beat that our policymakers hear over and over and over.  Your individual voice matters to this effort, but we must all paint the same picture about the risks – or rewards – of legislative initiatives. 

Unfortunately, the DAF proposal is emblematic of a much larger, very troubling mindset.  There are clear signs that many policymakers are questioning the value of “endowed philanthropy.”  I’m using that as a general term.  What I mean by this is – they are questioning the value to society of having funds – resources – that are built over time to serve as keystones for a community’s future.  Just this week, I had a letter to the editor published in the New York Times speaking to the importance of endowed philanthropy. That’s the kind of advocacy we are doing for you.

If this short-sighted view gains momentum, it will ultimately dismantle our strong and invaluable philanthropic infrastructure that has played a critical role in building, supporting, and preserving communities here and globally.  We must turn back this notion before it takes hold.

I want to raise one more tax policy issue – the America Gives More Act.  This bill passed the House of Representatives with bipartisan support, something that is almost unimaginable these days. It includes a provision that the Council has been championing for about a decade. It would make the IRA charitable rollover permanent. This would be a tremendous accomplishment. 

If we could get the provision made permanent, that will pave the way for other priorities – like expanding the rollover to apply to DAFs.

So, please keep up the push on Congressional leadership.  We need to get the measures in this bill passed before the end of the year. Sure, politics will come into play.  But, the America Gives More Act is the farthest the provision to make the rollover permanent has ever gone.  It’s our collective responsibility to speak out.  I want to thank those of you who have already heeded the call from the Council and regional associations. We need to show our lawmakers that we are a force to be reckoned with – that we will rally communities when the issues they care about are on the table. 

The Power to Create Lasting Impact, Together

By its very nature the Council on Foundations embraces a wide angle view of our sector. As a guardian of the public trust in philanthropy, we are made up of foundations with diverse missions, strategies, sizes, and locations. Too often our field divides arbitrarily because of tax code distinctions, and we cannot enter the next century of community philanthropy with this mindset.

The Council is positioning itself to promote collective action more effectively among our membership, yet we still recognize the unique needs of our members.  This vision for a broad philanthropic community and partnership among foundation types is at the heart of why we are hosting one, holistic conference in April in San Francisco next year. That said, we will continue to have distinct programming for community foundations, developed with community foundation professionals, and we hope to see you there.

If we are going to build a remarkable future for community philanthropy, we must facilitate strategic collaboration with a variety of foundation types.

A number of leaders continue to see the value in this strategy – to great effect.

Alberto Ibarguen of the Knight Foundation will be talking with you shortly, and he knows first-hand how how a national foundation can work effectively with local communities. Under his leadership, the Knight Foundation has made real and meaningful partnership with community foundations a cornerstone of the foundation’s place-oriented strategy.

Likewise, the Charles Stewart Mott Foundation has sponsored a great deal of the work around the Centennial commemoration. Their high-impact partnerships are seeding a future filled with new and stronger community foundations both in the U.S. and globally.

Community foundations are stronger when connected with the entire philanthropic community. We must work together to share knowledge and marshal resources because the challenges we face demand our best and collective efforts.

Our successes give us hope, and what failures we encounter give us instruction. This Centennial year – in keeping with 99 proud years before it – has led to the creation of new tools, new ideas, and new relationships, and it has also endowed our field with new energy for the tasks ahead. 

Power of Place - The Story of Ord

I want to conclude with a story that exemplifies the true power of place. One of the best examples of achievement I’ve seen recently comes from the Midwest. Nestled in the Nebraska Sandhills fifty miles from the nearest interstate is a town of 2,000 called Ord. Since the Great Depression in the 1930’s, the town had shrunk steadily.

Some leaders in Ord turned to the Nebraska Community Foundation for help in 2002.

What happened next was incredible and became a national model for community development.

Fueled by philanthropic investment, the Nebraska Community Foundation and its partners, the Center for Rural Entrepreneurship and the Heartland Center for Leadership Development, helped the community develop volunteer task forces focused on building local leadership.

A million dollar estate gift was endowed to support community development through an economic development board and business coaches. Local banks provided scholarships for business boot camps and leadership programs.

People started using the phrase, “come back and give back.” And that’s what happened.

After just five years, they revitalized or created 104 businesses, added 332 new full time jobs, and attracted $89 million in local investment. The town experienced growth for the first time since 1930.

The example of Ord speaks to me about how all of you must assess your own unique strengths and opportunities. Because the people who live and work in communities have a unique ability and a wisdom to change their hometowns.

That is why community foundations play such a vital role in building better communities and transforming individual lives. You hold the power of place.

Conclusion

The Centennial has helped all of us think about how to make our endeavors more successful, and we know for certain that we can’t do this on our own.

There’s such a fine degree of subtlety to the work of philanthropy and the work you are doing. Too often people think of a foundation as an ATM for the community to visit, but philanthropy is so much more. It is a partner that helps deploy resources but also develops strategies for lasting impact.

In the same way, the Council is more than a repository of information or a place to find products.  

We are your partner in helping you constantly improve and innovate – with legal and policy assistance, with a topnotch standards program, with a community of professionals, and with the right knowledge and learning opportunities.

We are your voice in Washington, and we will continue to fight for you.

We exist to help you with the serious challenges you face every day.

Ultimately, the power to shape the future of community philanthropy for the next century is with all of you.

Thank you for your time. Thank you for your commitment to community philanthropy, and thank you for your support of the Council.