Capacity, Culture, Commitment and Comfort: Finding Public Policy Strategies That Fit Your Foundation

July 20, 2010

How much change can a foundation catalyze by simply – albeit generously – writing checks? Not as much as it could if it also engaged in public policy activities. In fact, public policy work should be viewed as an essential part of a foundation’s efforts, say several members of the Minnesota Council on Foundations.

In our Summer issue of Giving Forum, “Public Policy and Philanthropy: Many Roads Lead to the Same Destination – Change,” John Larsen, trustee and administrator of the John Larsen Foundation, says, “Ultimately, the work of our foundation is about creating real, systemic change, and that can only happen when we start talking to government. Whether you’re a small family foundation like us, or a very large foundation, we all need shifts in public policy in order to achieve really significant lasting social change.”

The challenge is that working to achieve shifts in public policy is often equated with lobbying. And the thought of walking up the steps of the Capitol or testifying before a legislative committee is more than many funders can fathom.

Lobbying, however, is not the sole avenue to influencing public decision making and advocating for causes. Although it is the most recognized public policy engagement tactic, it is only one of 18 distinct policy strategies that Julia Coffman outlines in “A User’s Guide to Advocacy Evaluation Planning,” published by the Harvard Family Research Project.

A “Framework of Public Policy Activities,” which we include in Giving Forum, also includes using electronic outreach and social media, coalition and network building, grassroots organizing, briefings and presentations, polling, pilot projects, research investigating issues and identifying solutions and policymaker education, among others – all of which can impact public decision making, which ultimately shapes policy development, approval and implementation.

A foundation can engage anywhere along the continuum, pursuing those activities that fit its capacity, culture, commitment and comfort levels. A public policy activity that feels right for one foundation may not fit another.

Many foundations choose a combination of strategies, leveraging their resources to: raise awareness of where the public stands on particular issues; bring together divergent points of view to first converse then collaborate; empower community members to advocate on their own behalf by providing technical assistance; increase the capacity of nonprofits to mobilize others; identify messages that resonate with policymakers and the public; determine what would happen if the status quo was allowed to prevail; aggregate what is known already about an issue and put that to work to further discussion; or identify possible solutions and best practices.

These MCF members have each chosen distinct strategies to impact public decision making that fit their capacity, culture, commitment and comfort level. Read more about their work in our just-published Giving Forum:

Lead article:

Southern Minnesota Initiative Foundation: An outgrowth of its grantmaking and programmatic activities, community dialogues and business loan work, SMIF’s public policy activities, including building coalition and networks and partnering with the media to draw attention to the issues and how public policy could impact the success the foundation seeks.

The Minneapolis Foundation: As part of the School Readiness Funders Coalition, a group of funders with diverse strengths and abilities in advocacy work, The Minneapolis Foundation brings to the group its ability to lobby and testify at legislative hearings to advocate for the coalitions “Agenda to Achieve Learning Readiness by 2020.”

John Larsen Foundation: When awarding grants supporting work toward LGBT equality, the foundation  considers if educating policymakers is an end goal of the nonprofit’s work and if the organization has a research plan and a track record of communicating those findings to policymakers.

Indian Land Tenure Foundation: Striving to ensure that lands within the original boundaries of reservations is acquired, owned and managed by Indians, the foundation views education about land issues a priority, as well as identification then pursuit of strategies for achieving legal reform.

Women’s Foundation of Minnesota: The explosion of social media has created a new landscape for the foundation to leverage its expertise to educate, engage and broaden its reach to shift attitudes, behaviors and institutions that limit equality for women and girls.

Voices of Philanthropy articles:

Bill and Melinda Gates Foundation: Identifying partners best qualified to successfully implement strategies and measuring what’s important to guide future initiatives drive the foundation’s advocacy work.

Initiative Foundation: Based on the belief that local people are the key to strengthening communities, the foundation increases civic engagement by providing training, technical assistance, resource referral and grants to help citizen-based teams develop and carry out strategic plans.

While these efforts are diverse, the common thread amongst them is the recognition by these foundations that strategically developing goals to influence public decision making and intentionally engaging in public policy activities and advocacy work can move systems change forward.

- Chris Murakami Noonan, MCF communications associate


Small Foundations Pay Out Big, Study Finds

July 6, 2010

As Foundation Source processed grants last year and analyzed data collected from Form 990PF filings of nearly 500 of its small and mid-size private foundation clients, it tracked the pay outs and compiled what it found. Its just-released study concludes that, in 2009, 83 percent of these small to mid-sized foundations paid out more than they were required to by the IRS. (The IRS requires that private foundations distribute at least 5 percent of average investment assets annually for charitable purposes.)

In fact, the study says that 58 percent exceeded the minimum distribution requirement by at least 5 percent of their average investment assets.

The larger payouts are continuing into 2010, the Foundation Source also notes, reporting in May that it was seeing a 15 percent increase in grantmaking among its clients.

“Ninety-nine percent of all family foundations are under $100 million,” says Foundation Source President Andrew Bangser. “These generous foundations represent more than half of all foundation giving in the US, nearly $16 billion in 2007. … The data shows that most family foundations have not limited their giving to the minimum amount required by the IRS. And small and midsize family foundations stepped up dramatically in this tough economy to assist a wide variety of people, organizations and causes.”

Foundation Source provides support services for more than 900 private foundations across the U.S. representing $4 billion in foundation assets.

To learn more about the study, view it online on the Foundation Source’s website, or read about it in the Chronicle of Philanthropy.

-Chris Murakami Noonan, MCF communications associate


Energizing the 95 Percent of Foundation Assets That Aren’t in the Spotlight

May 3, 2010

It’s hard to imagine that something that’s been around for 40-plus years is actually energizing philanthropy. But, that’s exactly what program-related investments (PRIs) are doing.

“While foundations traditionally have given great attention to the 5 percent of their assets they typically pay out each year, PRIs provide us with an opportunity to think about what we do with the other 95 percent and what our role could be in working with our community partners,” suggests Kathleen Fluegel, executive director of HRK Foundation, a member of the Minnesota Council on Foundations (MCF).

The Spring 2010 issue of MCF’s Giving Forum focuses on how Minnesota grantmakers are magnifying impact and creating change through innovative philanthropic initiatives. PRIs – loans, loan guarantees, lines of credit and equity investments that earn a foundation a return on its investment of 1 to 2 percent in most cases – are playing a prevalent role in energizing the field.

Fluegel recalls that when the younger generation of HRK trustees introduced PRIs to the board as a new foundation tool, the idea was “embraced by the older generation, and it energized all of us because of new, creative possibilities,” she says.

For example, HRK offered a PRI to one of its long-time nonprofit partners who was having difficulty timing cash flow to acquire pieces for its museum. “We realized that a line of credit could give the organization more flexibility,” Fluegel explains. “Raising money for the acquisitions wasn’t an issue; it was quick turn-around that presented challenges.” With the line of credit, the museum could purchase an object and then take the time needed to raise the money and repay the loan.

In this issue of Giving Forum, we also spotlight PRI maker Sunrise Community Banks.

With its community development mission, Sunrise provides financing that other institutions might view as risky. “We’re willing to take the extra steps to make some of these projects work, because we know they will positively impact the community,” acknowledges Nikki Foster, Sunrise Community Banks’ vice president of community development.

Through its Sunrise Homeownership Alliance, an innovative, nationally recognized initiative, Sunrise Banks secured deposits from organizations such as The Minneapolis Foundation and the John Larsen Foundation. These deposits fuel lending through the Greater Metropolitan Housing Corporation and Dayton’s Bluff Neighborhood Housing Services. These nonprofits provide financing to individuals to buy homes  on a three-year contract for deed, during which time the individuals participate in credit counseling to learn how to repair their credit and set aside savings, so they’re able to refinance into a conventional mortgage. Also part of the financing mix are federal dollars from the Family Housing Fund.

In this issue’s “Giving Trends” article, MCF research manager Juliana Tillema outlines how PRIs got their start, some recent trends and the opportunities and benefits that PRIs can present for both foundations and nonprofits. She notes that, because PRIs require funders to integrate deep program knowledge with financial and legal expertise, PRIs are most often made to organizations with which a grantmaker has a well-established relationship, when a strategic investing opportunity arises with those partners, and when capital is needed to realize a shared goal.

Who are Minnesota’s PRI Makers? Tillema cites MCF research that lists 11 MCF members, about half of whom made their first PRI recently – in either 2008 or 2009. The list includes: Blandin Foundation, Duluth Superior Area Community Foundation, HRK Foundation, John Larsen Foundation, Lutheran Community Foundation, The McKnight Foundation, The Minneapolis Foundation, Otto Bremer Foundation, Carl and Eloise Pohlad Family Foundation, Thrivent Financial for Lutherans Foundation, and the West Central Initiative.

- Chris Murakami Noonan, MCF communications associate




Economic Crisis Yields Challenges and Opportunities for Grantmakers

January 26, 2010

A year ago, as the economic turmoil was unfurling, looming questions of “How bad?” and “How long?” were top of mind. As we enter a new economic reality, grantmakers acknowledge that we won’t be returning to business as usual; we have to do our work differently.

How each grantmaker chooses to work “differently” is as varied as the number of foundations and corporate giving programs. Peter C. Hutchinson, Bush Foundation president, recently wrote about the challenges facing his organization: “Like others, we are pulled in competing directions. We want to do the right thing, but there are many right things we could do…The question is: Which right things are right for us?”

In our winter issue of Giving Forum, we highlight several foundations and how they’ve chosen to address the challenge of finding and then focusing on what’s the “right thing” for them to do during these tough times:

The Bush Foundation is keeping its sights on longstanding aspirations and its Goals for a Decade. Explains C. Scott Cooper, director of engagement and communication: “We have decided that the role we need to be playing in this economy is not to react to new problems, but to stay focused on the issues that we think are important – which are the same issues that were important to us before the recession – and to be held accountable for outcomes.”

The W.K. Kellogg Foundation, in the midst of developing a strategic framework when the recession hit, stepped back to look for new answers. “Our big ‘a-ha’ came when we decided that – as we sat here in Battle Creek, Mich., where the bottom has repeatedly fallen out of the job market – we needed new answers to grow the economy and to bring into our workforce development perspective entrepreneurship skills and the mindset and tenacity that go with them,” recalls Anne Mosle, vice president for programs.

The Minneapolis Foundation partnered with its donors to establish a Crisis Assistance Fund to assist individuals and families with food, heat and housing, and it matched additional funding from donor-advised funds to support workforce development, education, housing and other human and social service agencies.

The McKnight Foundation is maintaining its long-term focus to fight catastrophic climate change, among other priorities. “There is often a tension between responding to changing times and remaining focused on long-term goals, addressing the most critical issues with appropriate resources, urgency and creativity,” acknowledges President Kate Wolford. Over the course of 2009, Wolford reports that the McKnight board “sharpened our strategic focus in several priority areas, including accelerating the shift to a low-carbon economy, improving third grade literacy in the metro area, and implementing place-based strategies to increase opportunities for low-income residents.”

Land O’Lakes Foundation, in the enviable position of experiencing added funding due to the company’s record growth, launched its Feeding Our Communities initiative. “We looked at who owns us – we’re a cooperative owned by farmers,” explains Lydia Botham, executive director. “And, we looked at rising needs: people who never had to go to a food shelf before who now just can’t make ends meet. We felt that more needed to be done to address hunger, especially in rural areas, where it is somewhat hidden, but just as great as it is in urban communities. Feeding Our Communities is taking our ongoing support of hunger issues to a much higher level, using our expertise and resources locally, nationally and globally.”

Foundations’ responses to the hardships created by the economic downturn are not limited to decisions on funding priorities and strategic plans. Like the nonprofits they support, many also face tough administrative and operational choices. The wellbeing of nonprofits is always top of mind, though. For example, at the McKnight Foundation, “When looking at administrative reductions, a key goal was to minimize any negative impact on grantees,” Wolford says.

Articles in Giving Forum also address funders’ perspectives on the state budget plight, the advent of federal stimulus dollars and where they believe all this turmoil is leading.

- Chris Murakami Noonan, MCF communications associate


MCF Elects New Board Members & Officers

December 14, 2009

At its 40th anniversary annual meeting of members Dec. 8, MCF elected officers and new members of its board of directors.

2009 and 2010 MCF Board Members

2009 and 2010 MCF Board Members

New directors elected to three-year terms ending in 2012 are: Julie Hara, executive director, Marbrook Foundation; Steve Joul, president, Central Minnesota Community Foundation; LaVon Lee, program officer, Grotto Foundation; Tim Ober, president, Mardag Foundation.

Directors elected to second three-year terms ending in 2012 are: Bill Linder-Scholer, executive director, ADC Foundation; Karen Rauenhorst, vice president, Mark and Karen Rauenhorst Family Foundation; Kris Taylor, vice president of community relations, Ecolab Foundation.

Officers were elected for 2010: Karen Kelley-Ariwoola, vice president, Community Philanthropy, The Minneapolis Foundation, was elected chair; Kate Wolford, president, The McKnight Foundation, was elected vice chair; George Thompson, trustee, Minnesota Community Foundation and The Saint Paul Foundation, was elected secretary; Nancy Nelson, vice president and chief actuary, Blue Cross and Blue Shield of Minnesota Foundation, was elected treasurer.

MCF expresses its gratitude and thanks to these retiring board members: Ellis Bullock, executive director, Grotto Foundation; James R. Frey, president/CEO, Frey Foundation; Holly C. Sampson, president, Duluth Superior Area Community Foundation; Jo-Anne Stately, director of grantmaking and special projects, The Minneapolis Foundation.

– Chris Murakami Noonan, MCF communications associate


Helping Individuals and Families Navigate Crisis: Interim Report on the Bremer Emergency Fund

December 8, 2009

Not unlike many other foundations, the Otto Bremer Foundation responded quickly last winter when the economy started its free fall with no end in sight.

The Bremer Emergency Fund (BEF) was a joint response – with foundation grant dollars supplemented by donations from the Bremer banks. In January, the fund gave 81 grants totaling $4.2 million to community organizations in Minnesota, North Dakota and Wisconsin to provide emergency financial assistance to families and individuals struggling to provide basics such as food, warm and stable housing, health care and reliable transportation.

“We recognize that timely financial assistance can sometimes make the difference between instability and security, enabling families and individuals to meet emergency needs and retain housing or jobs,” William Lipschultz, foundation trustee, said last January. “Once people are able to meet their basic needs and avert a crisis situation, they are in a better position to access community programs that can help them achieve long-term economic stability.”

Halfway through the one-year grant period, the foundation surveyed its grantees. The results of their responses were released today in an interim report.

“The Resources Available Have Not Kept Pace With the Need”

According to the report summary: “Three-quarters of BEF grantees are seeing more unmet needs than they expected, and many are expending funds much more quickly than they anticipated. Applicants for assistance are in deeper crisis than expected, with broader needs. More people are affected by job loss, and job searches are taking longer than in the past. Homeowners as well as renters are in need of support. Areas with high poverty rates have been especially hard hit.”

Measuring Impact

Grantees are measuring the impact of the BEF grants in a variety of ways, including:

  • Increase in number of requests for emergency assistance to which the agency can now respond.
  • Increase in amount of assistance the agency can provide to each individual/family.
  • Percent of clients’ needs agency could meet.
  • Ability to keep clients in their homes, with heating and lighting, and prevent homelessness.
  • Ability to provide access to food, assistance for transportation emergencies, help with medical expenses such as purchase of prescription drugs, shelter for homeless clients, assistance in budgeting.
  • Ability to help clients retain or find new employment.
  • Ability to help clients who have been turned away from all other forms of assistance.
  • Ability to help clients meet their goals, resolve the current crisis, prevent future emergency needs, improve family stability, and/or connect to long-term solutions.
  • Indirect impacts, which include preventing child abuse/neglect and domestic violence and ensuring school continuation for children.

Sharing What’s Been Learned

Grantees overwhelmingly expressed an interest in learning from each other and sharing resources. Foundation staff are planning to follow up by:

  • Facilitating learning among BEF grantees by helping them share information, tools and questions.
  • Conducting a final grantee survey in early 2010, the end of the funding period, to explore outcomes, impact and lessons of the grant-supported initiatives and the program as a whole.
  • Developing a final learning report on the BEF, including information about the creation, operation, impact and lessons of the program.

- Chris Murakami Noonan, MCF communications associate