CFO Update 1,360 funds $140 million in total assets $49.9 million in grants and distributions since 1973 $10 million in grants this fiscal year 40 affiliate community foundations 510 affiliate funds $50 million total affiliate and regional assets

Growing Smarter Achieving Sustainability in Emerging Community Foundations

GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations OBJECTIVE Draw attention to the unique opportunities and challenges faced by emerging community foundations Share practical approaches to achieving sustainable growth

GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations CASES The paper highlights experiences from nine small California community foundations engaged in The James Irvine Foundation’s Community Foundations Initiative II. INTERVIEWS The paper captures insights from fast-growing community foundations in the next stage of development, with assets of $10 million to $200 million. Arkansas Community Foundation Community Foundation of the Great River Bend The Community Foundation of Harrisonburg and Rockingham County The Community Foundation of Lorain County Community Foundation of New Jersey Community Foundation of the Ozarks The Community Foundation Serving Boulder County The Erie Community Foundation Greater Green Bay Community Foundation Greater Houston Community Foundation The Harrison County Community Foundation Henry County Community Foundation, Inc. Northern Virginia Community Foundation The Omaha Community Foundation Triangle Community Foundation

emerging community foundations GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations FOCUS emerging community foundations Emerging refers to young community foundations that are experiencing — or are poised to experience — a high rate of growth. Emerging community foundations make up a high percentage of the community foundation field. Lessons presented can be valuable for community foundations of virtually any size that are undergoing a significant increase in scale of assets, operations or operating costs.

emerging community foundations GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations CONTEXT emerging community foundations Field-wide analysis shows: More than 50 percent of community foundations are less than 10 years old Of these, two-thirds have < $25M in assets

emerging community foundations face unique challenges GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations SITUATION emerging community foundations face unique challenges Ambitious community expectations Limited resources Difficult struggle toward financial sustainability

have unique opportunities GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations EMERGING COMMUNITY FOUNDATIONS have unique opportunities Greater freedom to explore innovative operating models and experiment with new ideas Ability to adapt more quickly Choices made in the present have the potential to dramatically change how the foundation works in the future

sus•tain•a•bil•i•ty DEFINITION GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations DEFINITION sus•tain•a•bil•i•ty Having the resources that enable a community foundation to advance its mission today, while also enhancing its ability to do so in the future.

Deficits will disappear as asset size grows. GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations THE GROWTH PARADOX CONVENTIONAL WISDOM: Deficits will disappear as asset size grows. REALITY: Deficits may actually worsen as assets grow.

all assets are not equal when it comes to sustainability GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations FACT all assets are not equal when it comes to sustainability The path to sustainability does not depend on growth alone Answering the right questions in the right order increases the likelihood of success Choosing the best approach to growth aligns organizational resources and expectations

MOVING FROM “HOW FAST CAN WE GROW?” TO: GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations MOVING FROM “HOW FAST CAN WE GROW?” TO: “What are our goals for growth?” “What are the ways in which we can grow?” “How can we grow in a sustainable way that serves our mission?”

define success beyond asset size GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations GOALS FOR GROWTH define success beyond asset size Growing community awareness and involvement Encouraging local philanthropy Increasing the reach of grantmaking Improving the proportion of costs supported by fees

Controlled Engaged Leveraged THREE APPROACHES TO GROWTH GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations THREE APPROACHES TO GROWTH Controlled “We don’t spend money we don’t have.” Engaged “Let’s get everyone involved.” Leveraged “We need to expand our reach.”

“We don’t spend money we don’t have.” GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations CONTROLLED APPROACH TO GROWTH “We don’t spend money we don’t have.” Emphasizes the need for organizational stability and independence Utilizes funds with favorable economics, closely managing expansion and costs Requires saying “no” more often and potentially accepting slower growth

“Let’s get everyone involved.” GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations ENGAGED APPROACH TO GROWTH “Let’s get everyone involved.” Emphasizes the importance of building relationships Utilizes initiatives to engage the local community in philanthropy Requires skill in building relationships and proficiency in managing complex initiatives and community expectations

“We need to expand our reach.” GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations LEVERAGED APPROACH TO GROWTH “We need to expand our reach.” Emphasizes broadening the community foundation’s reach through partnerships Utilizes geographic affiliates and matching funds Requires significant investment and fiscal discipline

the affiliate board role GROWING SMARTER: Achieving Sustainability in Emerging Community Foundations INCREASING SUSTAINABILITY AND IMPACT the affiliate board role What implications should your board be considering at the local level regarding the three growth strategies? Controlled Engaged Leveraged