2014 GIFT LEADERSHIP RETREAT

LIFE CYCLES OF COMMUNITY FOUNDATIONS

1. Total population served 2. Number of counties covered 3. Urban vs. rural 4. Number of municipalities within

area

MAJOR INFLUENCES IN THE DEVELOPMENT OF COMMUNITY FOUNDATIONS

• Community size & type • Community demographics • Foundation history & governance • Lilly Endowment grants

1. Income diversity of population base 2. History of philanthropy 3. Number of ‘centers of influence’ 4. Existence of strong private foundations in an area 5. Economic growth experience of the community 6. Age of population base

MAJOR INFLUENCES IN THE DEVELOPMENT OF COMMUNITY FOUNDATIONS

1. How quickly staff was hired 2. History of board engagement, particularly

in fundraising 3. Continued influence by long-term or

retired board members or staff 4. Original practices still in place 5. Ingrained values and beliefs 6. Presence or absence of appropriate

leadership at various growth cycles

MAJOR INFLUENCES IN THE DEVELOPMENT OF COMMUNITY FOUNDATIONS

MAJOR INFLUENCES IN THE DEVELOPMENT OF INDIANA GIFT COMMUNITY FOUNDATIONS

Series of 5 phases over first several years • Operating funds, re-granting funds, endowment match funds

• Different components as foundations

Increased capacity to start a community foundation

Increased urgency to establish many funds

Increased urgency to establish community needs

Increased urgency to hire staff and open an office

Phase 1 - Creativity

Phase 2 - Direction

Phase 3 - Delegation

Phase 4 - Coordination

Phase 5 - Collaboration

Phase 6 - Alliances

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

GREINER CURVE

Asset growth: $50,000 to $1 million Finances handled by volunteer treasurer Raising operating funds is essential but difficult Funds: 1 to 25 (many designated/scholarships) Average fund size $10,000 Bank or local broker manages assets Small operational budget

Very little grantmaking Few designated or scholarship grants - $500 to

$2,500 No unrestricted grantmaking

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Marketing through basic collateral material and talking points for board members New fund stories in local media Community needs conversations No community projects Little collaboration

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Community Foundation concept is new Mission is unfocused Incorporation, bylaws, 501(c)(3) status Working Board, little staff support Many meetings Focus on creating basic policies and

procedures Board members responsible for fundraising

and management activities Informal styles of communication used

Scramble for operating support Temptation to ‘try everything’ Volunteer burnout Establishing correct policies Forming the right relationships Building the right board Determining community needs Educating new donors and

community

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Professional leadership is needed One of the founding members may change their style and

takes on this role, but often someone new will be brought in. ED/CEO is only employee.

Skills needed: business management, creative thinking, flexibility, entrepreneurial spirit, ability to multi-task

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Produce first website Annual report Grantmaking stories in local media More defined marketing materials Begin relationships with professional

advisors

Asset growth: $2 - $4 million Funds: 25 to 75 (more diversity, some

unrestricted) Average fund size $25,000 Purchase fund accounting program or

outsource fund accounting Initial RFP for new investment

manager/advisor Relationships with professional advisors

More grants from funds Small unrestricted grantmaking - $1,000 -

$5,000

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

One staff member – ED/CEO is ‘happy juggler’ Shared or individual office location Roles and responsibilities for committees are

defined Policies become better defined Create strategic plan for asset development Board members responsible for fundraising

and fewer management activities

Convince community of permanence Fear of competing with other non-

profits Operating support a major concern Educating board takes time Board more interested in

grantmaking than fundraising ED/CEO burnout Bringing in many small gifts Funds for all donors Determining community needs Educating new donors and

community

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

One person can’t do it all New structures based on delegation among staff and Board

are called for. Skills needed: delegation, employee management,

communication, collaboration

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Asset growth: $5 - $10 million Funds: 75 to 150 Accountant hired to handle fund accounting, staff

or contract basis Review/update of investment/spending policy Increase in administrative fees Inquiries from many investment firms Develop planned giving program Relationships with professional advisors are vey

important

Opportunities to work with DAFs for more impact in grantmaking

Unrestricted grantmaking process more strategic Evaluation process of grantmaking established

Continual updating of website including online giving Audit, finance reports included on

website - more transparency Social media marketing Larger community projects Community foundation is asked to be

at the table for community discussions

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Additional staff added, more specialization Shared or individual office location CEO priorities: staff management,

administration, fundraising CEO education concerning planned giving More committees and inclusion of community

members Less involvement from board in management

activities

Founding board rotating off Sustainability issues Capital purchases Audit policies, establish controls Establish personnel policies Board transitions from management

to governance Stewardship of current fund

founders Educating community

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

More sophistication is required of leadership A much more sophisticated leadership function is required,

and the separate parts of the community foundation need to learn to work together effectively.

Skills needed: organization, business administration, delegation, employee management, communication

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Asset growth: $10 - $25 million Funds: 150 to 300 Average fund size $50,000 Diversity in investments Increase in minimum fund sizes More gifts go to existing funds Stewardship plan established

Proactive grantmaking processes explored Non-profit capacity grants Site visits for volunteers and donors

“Branding” Marketing plan developed Professional advisor network established Grant impact used in marketing Community foundation asked to convene

groups Many grassroots programs look to the

community foundation as an umbrella

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Board looks to the CEO for direction More staff; more emphasis on HR Improved board processes Improved policies for board recruitment

and orientation Larger office secured – own or lease space CEO priorities: staff management,

administration, stewardship

Internal structure becomes more challenging Sustainability issues Transfer relationships from CEO to staff Succession planning Community politics/neutral convener

challenged Stewardship of current fund founders Determining community needs Growth in unrestricted funds Greater emphasis on human resources

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Growth stagnates under increasing amounts of bureaucracy

A new culture and structure must be introduced. Skills needed: exceptional leadership, financial savvy,

organization management, employee management, communication

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Asset growth: $25 - $100 million Funds: 300 to 500 Average fund size $100,000 Donor investment manager advice More than one investment advisor/manager Planned gifts mature – majority of annual

gifts Re-focus on donors as customers

Proactive grant process in place Collaboration with other funders for

additional impact Giving circles allow for smaller grants

Continuing education credit for professional advisors Training for non-profit organization

staff and board Donor stories used for website and

specific marketing Involvement in major initiatives Catalyst, convener, collaborator Policies for moving community

projects out of community foundation

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Change in CEO leadership CEO priorities: staff management,

stewardship, bequests Community foundation involved in major

initiatives Training for non-profit staff and board Board becomes more involved with donor

stewardship Board membership is selective and exclusive

More complex internal structure Sustainability issues Donors find it hard to be heard Community politics Admin vs. entrepreneurial issues Can’t be everything to everyone More strategic in saying ‘no’ Can become too internally focused Maintaining balance between

initiatives and responding to the community

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Growth reaches limits for organization Further growth can only be realized by developing partnerships

with complimentary organizations. Skills needed: exceptional leadership, financial savvy,

communication, collaboration, coordination, compromise

GROWTH CYCLES OF COMMUNITY FOUNDATIONS

Asset growth: $100 million and up Funds: more than 500 funds Average fund size $100,000 plus Sophisticated investment strategies Larger donors, focused on results Planned gifts continue to form majority of

annual gifts Re-focus on donors as charitable partners

Proactive grantmaking is substantial percentage of discretionary grantmaking Collaboration with other funders and

community leaders

Community Foundation is leader, more quietly than in past Conversations about quality of life in

community start with CF Community projects initiated by CF Some organizations may spin off from

CF

Power and Organization – Larry E. Greiner

Exploring the Growth Cycles of Community Foundations – Michael J. Rawl, 2003

Organizational Growth Cycles-http://www.accel-team.com/techniques/orgGrowth.html

Growth Cycles of Community Foundations – Barbara McInnes, PDF located at www.lccf.org

Stages of Development – Building your Community Foundation–Endowment Development Institute, LLC, PDF located at www.globalfundcommunityfoundations.org