Northland Foundation Leverages Stimulus Monies

By Erik Torch, Grant Program Manager, Northland Foundation

It’s no secret that things are tough all over. Northeastern Minnesota has experienced massive layoffs in the mining, aviation and construction industries, among others. Businesses are struggling to keep their doors open, and nonprofits are pressed to meet a growing demand for social and human services.

Grants Expand Efforts to Promote Economic Recovery
During the past nine months, the Northland Foundation was awarded nearly $3 million in federal stimulus funding to help address, on multiple fronts, some of our region’s current challenges
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Erik Torch

These federal grants included $2 million from the U.S. Treasury’s Community Development Financial Institution (CDFI) Fund to increase capitalization of our Business Finance Program. Northland has provided business loans for 20 years, helping recipients create or retain more than 6,100 jobs. The $2 million CDFI grant greatly increases our lending capacity and will help us support job creation well into the future.

As part of a continuation grant from the Minnesota Department of Human Services, the Northland Foundation also received $69,750 in federal stimulus dollars to fund ongoing work with the region’s many “informal” child care providers – family members, friends and neighbors who regularly care for young children.

In October 2009, Northland received an $897,903 grant through the U.S. Department of Health and Human Services under a new program, the Strengthening Communities Fund (SCF) Nonprofit Capacity Building Program. With an additional match requirement, we will have a total of $1.1 million to launch an exciting capacity-building initiative aimed at nonprofits engaged in economic recovery efforts.

Keys to Successful Funding Bids
The region’s compelling level of need, Northland’s track record at delivering programs and managing government grants, and advocacy from community leaders and elected officials were the three “legs of the stool” upholding our successful bids for federal funding.

Although we knew Northland would be competing with large cities across the country for federal stimulus money, we didn’t let that stop us. There is no question that northeastern Minnesota is suffering under the current economy. Its small, rural communities are stretched, even in the best of times, to achieve economic and social parity with their urban counterparts.

We believe our experience in managing past state and federal grants weighed in our favor, and after nearly 25 years serving the region, our grant, business loan and operating programs are firmly established.

In addition, we have forged strong relationships at the local, regional and statewide levels. Elected officials, including Sen. Al Franken, Sen. Amy Klobuchar, Rep. Jim Oberstar and Duluth Mayor Don Ness, as well as longtime partners in the nonprofit and economic development communities, lent their support to our funding requests. An extensive range of collaborators and supporters was a key component of our grant applications.

Building Nonprofit Capacity
The Northland Foundation’s Strengthening Communities Initiative: Building Nonprofit Capacity to Advance Economic Recovery is our most recent undertaking utilizing federal stimulus funding. This two-year initiative is designed to enhance the economic and community vitality of communities in our region by increasing the long-term sustainability and effectiveness of nonprofit partners to address broad economic recovery issues.

Northland Foundation is one of a handful of Minnesota foundations to directly receive federal funding for nonprofit capacity building. Initiatives will focus in part on organizations that help low-income people find and keep jobs.

The initiative will target nonprofits that help low-income individuals to secure and retain employment, earn higher wages, get and keep better-quality jobs, and gain greater access to state and federal benefits and tax credits.

Although this grant is not intended to directly create or retain jobs, it will indirectly help low-income people to improve their financial stability by enhancing the capacity of local nonprofits that provide critical employment and social services.

Northland expects to reach up to 70 qualifying nonprofit community and faith-based organizations with training opportunities and/or targeted one-on-one technical assistance in five critical capacity-building areas: 1) organizational development, 2) program development, 3) leadership development, 4) collaboration and community engagement, and 5) evaluation of effectiveness. After receiving training or technical assistance, participants will be eligible to apply for competitive financial awards. Fully 60 percent of the federal funding will be disbursed through competitive financial awards that must be used for capacity-building rather than direct services or operating expenses. In some cases, capacity building may mean collaboration and partnership among nonprofits.

The federal grant provides the lion’s share of funding for this initiative, although Northland is responsible for a significant amount of match. Currently, a portion of the match is slated to come from the Minnesota Community Foundation’s Economic Relief Fund, as well as from Northland’s own resources. We are seeking additional funding to help meet the match requirement and potentially increase the amount available for technical assistance.

Because this grant is a cooperative agreement, it involves finalizing our strategy and evaluation plans by working closely with the Administration for Children and Families’ Office of Community Services, part of the U.S. Department of Health and Human Services. Our goal is to formally launch the initiative in February, following late-January instructional meetings in Washington, D.C.

The recent infusion of stimulus money offers the Northland Foundation an unprecedented opportunity to spur for-profit and nonprofit job creation in our region. It allows us to continue doing – and to do more of – the big picture capacity-building on which Northland has focused for years: assisting grant and loan recipients to improve long-term organizational stability.

The Northland Foundation is one of six Minnesota Initiative  Foundations and serves the seven-county region of Aitkin, Carlton, Cook, Itasca, Koochiching, Lake and St. Louis counties through: a grantmaking program that provides resources to nonprofit organizations in the region; an operating program, KIDS PLUS, that is dedicated to improving the well-being of children and youth; and a business finance program that provides financing to assist small and medium-size businesses. www.northlandfdn.org. GF
 

Values-Based Giving in a Changing Environment

By Kerrie Blevins, Patrick and Aimee Butler Family Foundation and Private Philanthropy Services

When Ben Bernanke declared last October that the recession was over, I did a little happy dance. I have the privilege of working with private foundations to help them actualize their philanthropic visions and goals. The previous 13 months had been heart wrenching. I watched the foundation boards I work with struggle to respond to increasing community needs and double-digit losses in endowment values. Bernanke’s declaration was a sign that we all might be able to return to a more hopeful future.

What we all know, in fact, is that the end of the recession is the beginning of a long and slow recovery. According to the Foundation Center, nationally, $150 billion in philanthropic assets were lost in the downturn. And while we’ve seen the markets rebound since the spring of 2009, we all recognize it will be years before foundations return to the asset value and grantmaking power they had in September 2008.

"For guidance, foundations can turn to other organizations and experts for recommendations about how to respond to the current climate...My experience over the last year, however, suggests that foundations also need to look inward and use their own missions, values and histories to respond." — Kerrie Blevins, Patrick and Aimee Butler Family Foundation and Private Philanthropy Services

Economic Recovery Brings New Challenges
Given the tremendous and rapid changes in resources and community needs, foundations have to re-evaluate their work and respond to this new and complex environment. Foundations of all sizes are grappling with key questions, including:

• Will our foundation change its grantmaking priorities to respond to changing community needs?
• Will our foundation change its financial commitment to the community?
• Will our foundation change its financial and administrative practices to increase impact and efficiency?

There is no one right answer that fits all foundations.

For guidance, foundations can turn to other organizations and experts for recommendations about how to respond to the current climate. Reports such as Grantmakers for Effective Organizations’ Smarter Grantmaking in Challenging Times suggest helpful guideposts. My experience over the last year, however, suggests that foundations also need to look inward and use their own missions, values and histories to respond.

What does it mean for a foundation to use its values to guide its decision-making process in the face of multiple challenges? Here are the stories of how three private foundations I work with are responding.

The Butler Family Foundation: Committed to Long-Term, General Operating Support
The Patrick and Aimee Butler Family Foundation has been committed to general operating support for nonprofit organizations for decades. This is based on the board’s belief that nonprofits know best how to allocate resources in support of their programs, and that a base of core, ongoing support strengthens organizations over time.

Two years ago, the board elected to deepen its support of organizations by making two-year grants to most of its grantee partners. Then, in early 2009, in the face of a volatile market and an uncertain financial future for the foundation, board and staff considered whether it was possible and prudent to continue to make two-year commitments to grantee partners. In keeping with its values, the board decided that in 2009 and 2010 it would continue making two-year grants through its Community Grants program, recognizing that nonprofits need a stable base of support now more than ever.

The Butler Family Foundation’s nonprofit grantees have expressed that, while the financial support is critical, the foundation’s commitment to their long-term partners also is very meaningful.

The James R. Thorpe Foundation: Deepening Relationships with Grantee Partners
The James R. Thorpe Foundation prides itself on being a relationship-based funder. The board is actively engaged with the foundation’s grantmaking, and all board members make several site visits annually. This relationship with nonprofits and the community has been a hallmark of Thorpe’s giving for more than 20 years.

In 2009, the board elected to deepen its relationships by hosting a convening of the foundation’s youth grantee partners, who represent diverse disciplines, including the arts, education and human services. Grantees discussed opportunities and challenges faced by their organizations. This gave the board a deeper understanding of the issues confronting these nonprofits.

Perhaps more importantly, the convening gave grantee partners an opportunity to build relationships with one another. In a follow-up survey with participants, executive directors described how isolating the current environment can be and how much they appreciated meeting and connecting with other nonprofit leaders. Because the participants reflected such diverse disciplines, they noted how much they enjoyed connecting with organization leaders in the arts, education and human services, and learning about how much they have in common.

The Laura Jane Musser Fund: Focusing on Community-Based Environmental and Arts Funding
The Laura Jane Musser Fund’s grantmaking is focused on strategies that enable communities to determine their own needs and design their own programs. For many years, the Musser Fund has supported programs in the arts and the environment in rural communities, where their grants have been critical to the implementation of many innovative programs.

In January 2009, the Musser Fund directors had a long and difficult conversation, examining all of their practices in light of the dramatic changes in their capacity to give, as well as in community needs. Aware that many foundations were moving away from support of environment and the arts in an effort to respond to mounting basic human needs, the board reflected on its giving priorities.

The Musser Fund directors elected to “stay the course” with its focus on environment and the arts, recognizing that their grantmaking is responsive and community-based, and that it supports the sustainability and vitality of rural communities.

Implementing Best Practices
Each of these foundations used a strategy that experts in the field are likely to call a “best practice” in this current environment, including: offering more general operating support and flexible funding; deepening engagement with nonprofits; and staying the course with critical funding areas in which a foundation has expertise.

What made each of these strategies the “right” one for that foundation was each board’s ability to use its own mission, history and values to chart the course in this challenging environment.

In addition to serving as foundation director of the Patrick & Aimee Butler Family Foundation, Kerrie Blevins is vice president of Private Philanthropy Services, where she provides foundation management services to the Beim Foundation, the Laura J. Musser Fund and the James R. Thorpe Foundation. GF