Spring 2007
Giving Stories
Minnesota Foundations and Corporate Giving Programs
Work in Principled Ways
1. Ethics and Law Principle
To sustain public trust by adhering to the highest ethical principles and abiding by all state and federal laws that govern philanthropy.
|
The Burdick-Craddick Foundation, a small family foundation, appreciates having resources regarding legal and ethical principles and practices. "We are guided by the work of the MCF, and it is very helpful to know that there is an organization with knowledge that we can tap and also larger foundations whose best practices can help shape ours," said foundation trustee Lou Burdick. "Having principles and practices for the field doesn't impact whether we would be ethical or not — from the beginning, we have focused on ethical behaviors. But it does help us add to the scope of what we can accomplish and how we do it."
The Burdick-Craddick family works to be transparent in the foundation's operations: they have a CPA firm audit the foundation books; they are very clear about their funding guidelines and make sure organizations that don't fit those guidelines avoid expending time on fruitless grant applications; and they work diligently on avoiding conflicts of interest and self-dealing.
"We are a small family board of seven, and every member signs a conflict of interest statement each year," Burdick added. "Lavish meals and traveling to fancy resorts are not part of our ethos. We have high standards to spend the foundation's funds as intended. For foundations to have credibility in the world today, we all need to be squeaky clean."
Like many corporations, Medtronic devotes considerable time to legal issues. While a corporate attorney is assigned to the company's foundation, the key for the Medtronic Foundation is not just finding the line of what's legal and what's not but in making the distinction between what the law allows and where perception falls short of that.
"We make a great effort to be transparent about our operations and materials both to the IRS and to our communities," said Penny Hunt, Medtronic's vice president of community affairs. "We are extremely conservative in reporting product donations and report less than actual value. Our compensation and benefits for employees of the foundation are conservative in relation to the company overall. We also try to be honest about what we do in all respects and not take credit for things that aren't the result of our work."
International grantmaking brings new legal challenges. "More of our work involves international issues and grantmaking, and we have a number of internal and external attorneys to advise us," said David Etzwiler, foundation senior director. "We want to make sure the IRS can trust that our international grants are going to the right place. Our grants administrator keeps apprised of the latest country data so we remain on the cusp of information related to international grantmaking."
2. Effective Governance Principle
To achieve effective governance by ensuring performance in the areas of stewardship of assets, donor intent, fiduciary responsibility and sound decision-making.
|
In the Lutheran Community Foundation's 12-year history, its governance has evolved with the growth of the organization and reflects its rapidly increasing responsibilities to foundation constituencies.
"This evolution is reflective of three key factors: the foundation's size, the complexity of its operations and its national constituency," says Chris Andersen, foundation president. "When we began, we were in large part a fundraising organization. We evolved into a stewardship organization as we further diversified our investment portfolio and internally managed trusts and gift annuities. In addition, we provided accounting for more than 2,500 donor-advised funds and organizational endowments. We are now moving into our next phase as a major grantmaker."
Throughout its evolution, the foundation has regularly reviewed and adjusted its governance practices. As a startup organization with a small board, the foundation borrowed equally from the talents of board and staff, resulting in a team approach where lines often blurred. In more recent years, roles have been clarified, the Carver Model has been used, and there is distinct separation of staff and board responsibilities.
The Lutheran Community Foundation also uses consultants periodically — at strategic points of change, and as recently as last year, to reassess the foundation's evolution and further clarify policy responsibilities. With assets approaching $200 million and another $400 million in expectancies, the foundation recently retained Cambridge Associates to advise the board on the foundation's investment policy and search for investment managers. "The board takes its fiduciary responsibilities very seriously, and as a faith-based organization, it believes we must adhere to an even higher standard for our donors and the community," says Andersen. "When our donors say that they are putting their faith in us, they mean it literally."
In addition, the foundation seeks input from its donors to guide them — both formally and informally — particularly in the area of grantmaking. "We have conducted formal donor surveys and have also held ongoing informal meetings with our donors," says Andersen. "We've found it is important not just to collect information, but also to provide feedback loops through one-on-one meetings, phone calls, newsletters and our website. Essentially, we're making connections and building relationships. The truth is that all of the good stuff and the meaning of our work is found in these relationships. And in the end, for us, it's where we find the joy."
The Carolyn Foundation works actively to be transparent as part of the foundation's focus on effective governance. With 200 family members spread all over the country, it is no small task to keep everyone apprised of foundation approaches and actions. "To be a family foundation with so many family members who have a great interest in the foundation, it is a challenge to make sure that everyone has an understanding of what we're doing," said Stewart Crosby, foundation board of trustees chair and fourth-generation family member. "This principle backs that up."
The foundation has recently gone through a generational transition. "By adding term limits, we were able to transition from the third to the fourth generation," Crosby said. "I am the second chair of my generation, and we are bringing on more board members of the fourth generation cohort."
The Carolyn board is aware of stewardship and fiduciary responsibilities and is straightforward in decision-making. "We are helped enormously as a board by having an executive director and part-time administrator," Crosby added. "A person and a half contribute to our working efficiently a board. The family sets the direction and approves the grants, but we get great guidance and support from staff."
Carolyn Foundation has a newsletter for family members that provides feedback and also piques interest for more family members to get involved. Friends of the Foundation, who are family members over age 18, can serve on grant review committees. At least one board member serves on each of the committees.
3. Mission and Goals Principle
To be purposeful in our philanthropy by having a clearly stated mission and explicit goals.
|
"We are constantly in dialogue with ourselves about who we are as an institution and the extent to which we are living up to our mission," said Karen Kelley-Ariwoola, vice president, community philanthropy for
The Minneapolis Foundation. "Our board of trustees meets four times a year, and at any meeting we can have new trustees joining the board. From time to time, the board pulls out the mission for review to make sure everyone is on the same page."
In that context, a trustee noted at a meeting in 2004 that the foundation was doing considerable advocacy work, and that it was important to what the foundation stood for, but that the mission statement didn't say that explicitly. "The board recommended that the simple words ‘an advocate' be added to the mission statement. This change has had a big impact on making sure we are congruent in the work of the foundation and our mission," said Kelley-Ariwoola.
The foundation's new mission statement follows:
We believe that the well-being of each citizen is connected to that of every other and that the vitality of any community is determined by the quality of those relationships.
Our purpose is to join with others to strengthen our community, in measurable and sustainable ways, for the benefit of all citizens, especially those who are disadvantaged.
We are committed to be an effective resource developer and a responsible steward of those resources, an active grantmaker and convener addressing crucial community needs, and an advocate and constructive catalyst for changing systems to better serve people.
4. Engaged Learning Principle
To foster continuous learning and reflection by engaging board members, staff, grantees and donors in thoughtful dialogue and education.
|
"We signed on to the principles 10 years ago when we joined the Council and review them regularly with our board," said James Frey, president/CEO and director for the Frey Foundation of Minnesota. "We now have a procedure we employ to make sure we're not closing down certain applications or favoring or disfavoring certain groups that fit our mission because they're outside our regular community of grantees.
"This practice has taken us proactively out to places we would never have gone previously, particularly in our efforts to combat homelessness, where we encourage our trustees to educate themselves in the community," added Frey. "It sometimes is more work for us, but it's helped us immerse ourselves in the community and not prejudge.
"The principles also helped when there was a downturn in the economy in 2002, giving us fewer dollars to distribute. It would have been easy to say, ‘We don't have funds to look at new programs,' but the principles helped us keep on track. The principles and practices helped us galvanize what we wanted to do as a foundation, and they continue to help us shape what we will be doing in the future."
Leadership, learning and impact: these three words encapsulate Bush Foundation's just-completed strategic plan. While these concepts are not new to the foundation's work, a specific focus on "iterative learning" — where learning continuously informs the next part of the foundation's work — was an important focusing concept.
Bush Foundation is making a more focused effort to facilitate iterative learning at all levels and among all constituents. "The idea is that learning shapes specific grantmaking, which in turn shapes the thinking of the broader foundation staff," said Anita Pampusch, foundation president. "As it evolves, the iterative process is mirrored in other grantmaking, in talking to grantees, in reflecting among ourselves, in doing evaluations and in working with the board. It's an infusion process that keeps changing, evolving and looping back on itself."
In the past, the foundation worked with the Center for Effective Philanthropy to survey all grantees as a learning process. "Two things struck us," Pampusch noted. "First, we didn't have a reputation for impacting a specific field; each grantee saw us in an individual way and not doing something beyond them." The solution was to start assessing and evaluating from the outset, not waiting until the end of a project. A pilot project on high school retention, for example, brought in evaluators from beginning to work with the districts, which started a dialogue that brought in other interested people in the field.
"It also was clear from the research that our funding priorities weren't always clear. We were surprised," Pampusch added. "But when we went back to look at them, we saw that our use of words like ‘may,' ‘sometimes' and ‘probably' — ones that we thought were generous — actually came across as obscure, weasel words." Foundation staff went back to the guidelines, examined the language and created a more assertive statement of foundation priorities and restrictions.
5. Respectful Relationships Principle
To build constructive relationships with applicants, grantees and donors by
ensuring mutual respect, candor, confidentiality and understanding.
|
Mutual respect, candor, confidentiality and understanding help reap the benefits of doing philanthropy for everyone involved, according to Mary Pickard of the Travelers Foundation. The foundation tries to make sure its constructive relationships with grantees help the nonprofits and their leaders do the best and be the best they can.
"Actually, constructive relationships are a two-way street," said Pickard, foundation president. "From our side, we can suggest resources, consultants and other nonprofit leaders or other funders depending on their issues; work with the nonprofit to hold an event in our meeting rooms; ask strategic questions like ‘what are you doing with succession planning?'; and help them make connections, find corporate board members and organize company resources and volunteers to help community efforts.
"They give back to us, too. We can't underestimate how much we learn from nonprofits. Through site visits, we learn about best practices and become more informed on important community issues and the creative approaches people are taking to solve problems. That learning shapes our grantmaking and, in turn, enhances our work within the company. Employees learn skills by serving on boards and as volunteers. This civic engagement fosters individual skills that help us as a staff to be more effective and builds the company's reputation in the community over the long term," Pickard concluded.
Since 1983, the Women's Foundation of Minnesota has built constructive relationships, in part by holding dialogues with grantseekers, grantees, donors, community members and other key stakeholders around the state.
"Our commitment to achieving equality for women and girls means building strong partnerships with supporters and volunteers, and that takes us out into Minnesota communities," said Lee Roper-Batker, foundation president and CEO. "We share information about our grantmaking opportunities and our research on the status of women, but the real benefit is in hearing first-hand about the needs and issues that matter most to the women and girls in these communities."
In fact, in 2007, the Women's Foundation will hold community forums in nine outstate cities: Alexandria, Mankato, Moorhead, Rochester, St. Cloud, Marshall, Willmar, Grand Rapids and Crookston. To focus on the needs of Native American and Asian American women, two forums will be held in the Twin Cities to attract participants from these communities.
"By listening to women and girls from diverse backgrounds — including race, age, class, sexual orientation, culture, physical ability and religion — we can invest wisely in community needs," Roper-Batker added. The foundation awards grants and measures progress in five cornerstone areas that it considers essential to advancing social change for women: Economic Justice, Safety & Security, Health & Reproductive Rights, Human Rights and Political Representation.
6. Communications Principle
To achieve transparency in our relationships with the public, applicants, grantees and donors by being clear, consistent and timely in our communications with them.
|
Communication is a continual learning process on both sides of the communication equation, according to Amy Crawford of The Jay and Rose Phillips Family
Foundation.
"The foundation continues to strive for excellence at every point along the grantmaking continuum," said Crawford, foundation executive director. "We try to be responsive when grantseekers and grantees call us, addressing questions and concerns, and as consistent as we can be in communicating how we operate, in giving technical assistance and in meeting them where they are if they decide to apply. At the conclusion of the process, whether they have been granted funds or if a proposal is declined, all those pieces of the puzzle have been attended to."
All applicants appreciate feedback on their proposals, being treated respectfully, and interaction with the foundation staff who are trying to learn more about a particular issue or community. "Asking for feedback is part of our process. How can we get better?" added Crawford. "We also open to discussing with applicants the reasons when they've been declined and what went into the proposal review process. If it makes sense, we tell them what they can do to reapply."
The foundation is looking at the pros and cons of potentially implementing an online grant application option in the future. "Our primary goal here is to see what's best and most responsive for our applicants and grantees that range from small grassroots organizations to sophisticated organizations with development staff skilled in preparing proposals," Crawford concluded.
7. Diversity Principle
To reflect and engage the diversity of the communities we serve in our
varying roles as grantmakers, boards and employers, economic entities and civic participants.
|
Diversity has been a central part of The Saint Paul Foundation's strategic planning for more than nine years relating to everything the foundation does — from grantmaking, to engagement in the community, to how the foundation selects board members, hires staff and operates at all levels.
"Anti-racism is one of our four goals of grantmaking, and we are both responsive, funding grassroots organizations that share that mission, and proactive, providing leadership in singular initiatives like Facing Race," said Carleen Rhodes, foundation president. "The community works with us on how to invest, and we've tried to provide leadership to undertake initiatives in addition to what others are doing. Our goal is to get more people thinking about the richness of diversity in the community and the value of multiple perspectives." The foundation also funds programs like the Management Improvement Fund, which provides technical capacity-building to emerging organizations, many out of the mainstream. These organizations bring ideas, and the foundation offers complementary resources, technical assistance and business planning.
"We've had an anti-racism advisory committee for almost four years to help guide us," Rhodes said. "They've looked at the status of racism and helped develop the Facing Race initiative. Because they are connected to many organizations, issues and strategies that percolate up in the community, the advisors are our sounding board and generator of ideas. A critical funding strategy is that the people affected by our work must be part of designing the solutions we fund."
Rhodes said the foundation staff wants to be able to "walk the talk," especially when they are inviting the community to participate in personal explorations of racism through Facing Race. The foundation provides staff with special training from multiple cultural perspectives. Once a month, the staff hold Festive Friday to celebrate a specific culture through art, discussion of issues and other multi-faceted ways of bringing learning into the organization.
The Saint Paul Foundation has actively sought diverse candidates for both the board and staff. "Our current board and governance committee are quite diverse, and that gives them the perspectives to expand the pool of potential board members," said Rhodes. The foundation has also broadened the process of hiring, reaching more communities and people. "We require diversity in every pool of applicants, and we are now willing to take more time in hiring to allow a pool to build."
In the past year, the foundation added another layer of scrutiny in selecting investment fund managers, and has sought firms owned or managed by persons of color. It required additional steps to look for them but has been successful, according to Rhodes. The foundation is now looking at additional due diligence to seek diversity in the firms from which staff buy services.
8. Self-Assessment Principle
To uphold the highest standards by regularly assessing ourselves against these principles and committing to implement them.
|
"We own the Principles for Grantmakers and have adapted them to suit the context of our work," said Otto Bremer Foundation trustee Charlotte Johnson. The Bremer Foundation has embraced the principles and incorporated them in different language in their guidelines.
The guidelines are published in the foundation annual report and in other materials, and staff and trustees apply them in all foundation operations.
"The Bremer Foundation staff and three trustees review and discuss these principles each year but, more importantly, we incorporate them in every part of how we do business," Johnson noted.
The foundation's evaluation process, as well as the annual review of the principles, brings the opportunity to rethink how the foundation does what it does. "Through our evaluation process, something that is sent to all applicants that qualify for a grant, we assess our accessibility, responsiveness and feedback in the application process.
"Bremer has a loyalty to our history and a commitment to the legacies of the communities we support, yet we use evaluation to uncover how we need to change our behavior and our approach," said Johnson. "We embrace self-assessment; it is essential to our work."
The John Larsen Foundation meets as a board only a few times a year. The four board members review the Principles for Grantmakers yearly and subscribe to them. At the same time, they look at how well they measure up.
"We go through them, one through eight, and discuss where we are in alignment and where we are not in alignment," said John E. Larsen, the son of John A. Larsen, both trustees of the foundation. "All told, the formal work of each board member amounts to about 20 hours per year, not including grant review and community work." Thus, the annual two-hour review in the board meeting is a significant percentage of yearly board time.
"I think we do a good job for a nonstaffed, semi-fly-by-the-seat-of-our-pants organization," Larsen noted. "If there are places that we need to work, we commit to improving them." The foundation created a website not long ago in part because the board wanted to demonstrate transparency to the community.
Because he is involved in MCF as a board member and active participant in
programs and committees, Larsen is aware of the accountability issues. "I'm pretty sure we wouldn't be as aware of the principles if we were not MCF members," Larsen said. "I think many foundations, particularly small family foundations, don't pay
attention because most are very not staffed and not hooked into discussions where the principles are talked about. Being involved in the association helps me and our
foundation."
|
Thank you to the sponsors of this issue of Giving Forum:
|
| $5,000 Sponsor |
 |
| $5,000 Sponsor |
 |
| $1,000 Supporter |
Duluth Superior Area
Community Foundation |
© Copyright 2007 Minnesota Council on Foundations
Reproduction in any form without the written permission of the publisher
is prohibited.
|
|
|
