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How Foundations can Support Generating New Ideas & Engaging New Voices in Community Development

Posted by on May 29, 2019 in Articles, Blog

My experience working on community and economic development issues in mid-sized metropolitan areas around the country has taught me a couple of key lessons. It’s difficult to get traditional players to truly think outside of the proverbial box. Some places are insular and hesitant to look externally for ideas and learning. Local folks with new ideas and energy are turned off by the same-old, same-old or just aren’t welcomed into the conversation.Here’s a great story about how one community transcends these dynamics. I talked with Brady Groves, President, Richland County Foundation, on how philanthropy took a leadership role in shaping a new approach, generating new ideas and bringing new voices into the work. Q: The Foundation was looking for new ideas to stimulate economic and community development in Mansfield, Ohio. How did you end up supporting a group of local folks to travel to SXSW in Austin?A: We had seen a variety of architectural proposals from groups seeking funding for development of our downtown. While all the plans were impressive, they lacked that emotional connection we were seeking. During this time, we were approached by our Chamber of Commerce and local on-line news source to provide a grant that would send a couple of community members to the South by Southwest conference as a way to invigorate creative thinking in our business sector. It was at this point, the community foundation decided, why not send a group to the conference with the express purpose of bringing back ideas to create an investment strategy for downtown Mansfield. In order to create the emotional connection we were seeking, we selected 15 individuals that skewed very diverse and young, but all had a personal connection to the central business district. Q: Sometimes communities are inward-focused and are reluctant to look outside their borders. How did you bring people along with this thought of learning from the outside?A: As a visual representation, we collected all the community development reports for Mansfield that have been produced in the last 30 years. They were stacked from the floor beyond the table; truly an indication to try something different. Part of the requirement of being selected to attend SXSW was the responsibility of providing daily blogs which were published by the local on-line news source. The blogs allowed the community to get a glimpse of the things the group was seeing and hearing during the conference. The views and time spent on those pages were enormous – over 18,000 people read the blogs and the #SXSW419 had an additional one million views. We quickly realized people were interested in what was going on. Q: What have been some of the most important moments for you in this venture?A: Watching non-traditional leaders, with little “street-cred” in the power circles of Mansfield, present ideas to 28 mentor leaders, with an established history of community leadership, in creating an 86- page investment strategy which highlighted 39 different projects. This community collaboration turned the trip from just sending a bunch of previously unconnected people to a music/geek-fest conference, to a community experience that everyone could share and become involved. Q: What advice would you share with other foundations involved in similar community building endeavors?A: Look at our plan. The first 18 pages of the Mansfield Rising plan talk about how this started and how people were chosen to participate. The goal was to be transparent and intentional in our communication to the public. Investing in local leaders was the first key to our success and attending SXSW was second. Without these two factors, we would not have gained the wide community interest nor allowed to think broader than our own...

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Why it’s Important for Foundations to Align Their Investments with Their Values

Posted by on May 7, 2019 in Articles, Blog

When working with foundations in strategic planning or evaluation efforts, I always advise that we start with the organization’s values. What are the fundamental drivers of the foundation’s work, what it wants to achieve and how it will be successful in those efforts. In a recent conversation with Brad Norton, Director of Endowment Solutions, for Winfield Associates, we looked at another important area for foundations to consider – aligning their investments with those core values. Q: First off, why do you advise your foundation clients to prioritize aligning their investment criteria with their core values? A: We advise all our foundation clients, regardless of size, to create an Investment Policy Statement (IPS) that articulates the investment return objectives, asset allocation ranges, and responsibilities of Trustees and third-party advisors/managers. Incorporating trustees’ values into the investment strategy is a process. This requires trustees to reflect on the foundation’s mission statement and consider selecting investments that have value alignment in their business practices. These practices could range from workforce diversity to reducing environmental waste to shareholder-friendly policies. Q: I’d imagine that sometimes achieving that alignment is easier said than done. What sort of guidance do you provide foundations in exploring what alignment can look like for them? A: Every foundation has its own culture and value system. The first question to ask is “Do we want our portfolio to seek maximum returns, regardless of investment type, to provide the highest level of funding to communities?” or “Do we want to align our values with investments that will seek competitive returns but may constrain our opportunity to earn the highest returns?” If values alignment is the primary objective, then a foundation must determine whether to: exclude certain types of investments such as tobacco, alcohol, and weapon manufacturers pursue an inclusive strategy of owning investments that support positive societal values such as diversity and clean environment, or a combination of exclusions and inclusions. Identifying corporate citizens making positive contributions to society should be a goal. A caveat is the more restrictive the values screening, the ability to generate higher returns may be constrained. Q: Do you have a couple of examples of how different foundations have used their core values to clarify or strengthen their investment policies? A: Yes, we have seen foundations clearly set expectations with their investment advisors in terms of acceptable types of investments. As the IPS is an internal document, the foundation can rely on the advisor to select appropriate investments as well as communicate to the underlying investment manager what are acceptable attributes. Investing in companies pursuing sustainability practices is an area of focus for many foundations. Trustees can confidently “advocate” their foundation’s values through the investment process. Q: What advice might you have for a foundation that is thinking about how best to follow its core values into an investment strategy? A: There are numerous approaches a foundation can consider. Incorporating core values into an investment strategy does not have to be an all-or-nothing proposition. Spend meaningful time discussing trustees’ values and how to incorporate these values during your next IPS review. An IPS is a “living” document that should be reviewed every few years. Similar to corporations that may seek to reduce fossil fuel consumption every year, a foundation could set a goal to increase its value aligned investments allocation annually to avoid a one-time portfolio realignment which could potentially harm investment...

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Supporting Innovation to Tackle Poverty

Posted by on Apr 16, 2019 in Articles, Blog

What was it that wise person once said about expecting different results from doing the same thing over and over again? Well, what would happen by coming at a particularly challenging issue like poverty from another angle? What would happen if you took a page from the handbook on entrepreneurship, injected the spirit of innovation and mixed it up with funding and coaching support for smart folks who bring new ideas? The Sisters of Charity Foundation of Cleveland did just that with the launch of the Innovation Mission: Fighting Poverty with Big Ideas. Foundation President Susanna Krey talked with me about what they, the social entrepreneurs and the community are learning. Q: The Foundation made a crucial strategic decision with its Innovation Mission. How did you land on this approach? A: We have spent the last two decades deeply immersed in seeking ways to break the cycle of poverty here in Cleveland. We’ve seen some really incredible results, like a forecasted end to chronic homelessness by 2020, but when all is said and done, a full one-third of Clevelanders still live in poverty. A fellowship was merely the vehicle we used to develop more impactful ideas that could address the issue of poverty in Cleveland. We believed that innovation can be learned and wanted to begin to develop this capacity in our partners. We know that innovative approaches can provide depth in understanding the problem. We hope these individuals will help their organizations incorporate these ideas into everyday practice. Q: What have been some of the most significant moments in the process you launched? A: We kicked off The Innovation Mission in December 2017 with an opening reception. It was such a memorable evening, and we were inspired by the fellows’ presentations and passion for the issues they chose to address. It felt like a very exciting moment, for all of the stakeholders who had been involved in the fellowship’s development to see the program come to fruition with such energy. The beginning of the design process was also a milestone. During the beginning months of the fellowship, the fellows faced various challenges and obstacles that seemed insurmountable at different times. Some of these required the fellows to pivot or refocus their projects. But, at 10-12 months into the fellowship, all of the fellows seemed to hit their stride; they had adjusted their projects and were moving confidently in a direction that held opportunity for success. And our first big result from one of the fellowship projects came from the work of Hazel Remesch, a supervising attorney for the Legal Aid Society of Cleveland. Hazel’s work led directly to a new rule in the Cleveland Housing Court that will make it easier for residents to seal their eviction records, eliminating a major barrier to safe and stable housing. Q: What would you say have been the key learnings thus far from the people which the Innovation Mission is supporting? A: Each of the fellows has made significant progress on their initiatives through research and partnerships, and all have credited The Innovation Mission with helping them think differently about their approach to work in their professional careers. The fellows have learned that true innovation is not just a bright idea; it involves constant iteration, some failure and plenty of learning. When they began the fellowship, the fellows thought they were going to spend 18 months designing a solution, and many were surprised to find that the key to their success was spending most of their time focused on the problem they were trying to solve. By studying the issues, fellows were better able to identify gaps where they could step in to help, and they found it easier to establish partnerships with people and organizations already focused on the same issues. Q: What advice would you share with other foundations based on your experience with this strategy? A: Don’t let the perfect be the enemy of the good. If you want to make a big change, be as thoughtful as you can – make plans, anticipate questions, identify and plan for barriers to...

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Compensation Approaches When Long-Serving Chief Executives Transition Out

Posted by on Apr 2, 2019 in Articles, Blog

Compensation Approaches When Long-Serving Chief Executives Transition Out

I recently assisted a small-staffed, private foundation in a planned leadership transition of their chief executive who had a tenure of 20-plus years. To get a sense of how other foundations approached creative retirement/transition packages for long-serving foundation chief executives, I posted a list-serv inquiry with Exponent Philanthropy, 21/64 and Philanthropy Ohio. With the permission of the foundation, I’m sharing some of what we learned. I have edited the comments to ensure the privacy of the respondents and organizations. We have a local private foundation work with us as a community foundation to establish a named endowed fund in honor of their former staff and board alumni to benefit the organizations or initiatives that the person identified as the most meaningful to them. Everyone has really appreciated this dedication to honor their community impact legacy and the private foundation enjoys supporting the local community foundation. Director of Donor Services, Community Foundation I was involved with a private foundation whose executive director left after many years. While he requested compensation upon his exit, their attorneys cautioned the board on giving too significant an amount of compensation after the executive had left the organization, because it might appear to be “excessive compensation” for a nonprofit. Instead, they made a grant to a nonprofit where the outgoing executive director became a fellow, and worked part-time for a couple of years. Executive Director, Philanthropic Support Organization I’ve heard of a grantor family that donated to a Charitable Remainder Unitrust with the income payments to the retired Director for life; with remainder to qualified public charity(ies). Vice President, Financial Services Corporation I’m happy to be able to weigh in on this one. When our (previous) Executive Director retired, the Board elected to honor his 25 years of service in the following ways: We retained him as a salaried employee with the title of Executive Consultant for six months. During this period, we paid him the same salary, but without any fringe benefits. Our board also established a grant award fund in his name. The award of $50,000 will be given to one organization annually that best exemplifies excellence in our strategic focus area. Executive Director, Private Foundation I took over as the CEO of a small foundation back in mid-2017 and I assumed the role because the exiting CEO of 20 years was retiring. There was a one-month overlap between us; his institutional knowledge being passed to me over 30 days allowed for him to be needed a bit less after his exit. My board also supported on-going support from the prior executive as needed for up to one year (that was in my court). We contracted with him for two additional items afterwards. There were a series of client/donor/investor meetings that he flew to so warm introductions could be made and so he also could serve as my guide (we cover a large geography with different groups of influence). We paid all of his expenses and a consulting fee based on his hours of work. In total it probably worked out to be about $1,000/day + expenses. He also completed a report for our constituents that was an annual report that he worked with me on but largely did the work for. That was all we needed in our space but I still keep in touch with the prior CEO and we share exchanges almost monthly just touching base informally. He was very humble in the transition and wants to see me be successful. President, Foundation A foundation that was in the process of sunsetting provided its executive director a major annual investment in the ED’s retirement fund, covered the cost of the ED’s and spouse’s COBRA extension, and created a Donor-Advised Fund at the ED’s local community foundation which allocated 60% pay for a year with limited duties. Former Foundation Executive...

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Learning Organizations

Posted by on Feb 28, 2019 in Articles, Blog

I’m always interested in finding out how different organizations pursue a learning agenda. I talked with Connie Hawk, Director of the Licking County Foundation in Newark, Ohio, who oversees a staff of six. Here’s how Connie inculcated a learning culture inside this community foundation.   Q: I understand the Licking County Foundation (LCF) has a team approach for staff professional development. How did this approach develop – intentionally or organically over time? A: It was a bit of both! There’s a culture of learning, sharing, curiosity, and openness to trying new things at LCF. Our team approach helps a small staff take advantage of the many and varied professional development opportunities available to our field. These opportunities are shared by everyone at weekly staff meetings to gauge interest. Sometimes, we’ll decide to participate together—like watching a webinar (always better with pizza). Sometimes, we’ll divide and conquer—attending individually and then sharing insights with the team. Sometimes, we’ll invite others in our community—board and committee members, donors, nonprofit partners, and other funders—to join us as we learn.   Q: How do you identify priority issues for staff learning? A: Key factors are: LCF’s strategic and succession/leadership development plans, Licking County’s community blueprint, opportunities/challenges/initiatives which bubble up and we’re asked to get involved, trends, new things we’d like to try—and, importantly, individual staff interests/growth.   Q: What have been some of the outcomes of this kind of professional development approach? A: There’s been a rippling effect. This team approach extends to sharing best practices or new ideas with our community. LCF has a robust series of workshops which are offered to area stakeholders. For example, last year, teams of nonprofit board and staff members attended a series of six workshops to strengthen their organizations and our community through endowment building. We also partnered with an area university to host a workshop on civil discourse skill-building at the public library. This year, we’ll focus on succession planning and board development. One of our staff members has taken the lead in organizing a successful women’s leadership conference. Another staff member leads a youth philanthropy program. LCF has become a go-to for best practices and new ideas.   Q: What advice would you share with other foundations based on this team effort in professional development? A: Be open to and encourage all kinds of learning—you never know where ah-ha moments of inspiration will come from. Make professional development a priority for not only your own organization, but for sharing it with your community. Include it as an operational budget line item with each staff member having an equal share of this learning pool. Allocate strategic grant funds annually which are restricted to offering capacity-building opportunities for the community. Professional development creates...

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