Transcript Biotechnology in Our Food: Shaping the Incentives and Choices

Improving Community
Vitality with Foundations
and Hometown Legacies
A Project of the
Community Vitality Center
Mark A. Edelman, Director
Reasons to Have a Foundation:
• Concern about rural population decline & outmigration of young people
• Concern about long term vitality in many nonmetropolitan areas
• CVC believes Community-based Entrepreneurship
and Philanthropy Initiatives represent approaches
that can re-energize Iowa Communities
Who is investing in your
Community to sustain future
economic vitality???
• What do people with wealth do when
there are no mechanisms for giving back to
their Hometown???
• Greater emphasis on having the private
sector do more in the future.
Reasons to Have a Foundation:
1. Annual Transfer of Wealth
(Probated Estates (1998-2002)
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Iowa:
Local County:
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Increasingly heirs live out of area/out-of state
Non metro counties will transfer more quickly
during next 20 years
Lost opportunity for Community Vitality
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$ 4.933 billion
$_____million
What if Audubon County had ?
• 5% of Wealth Transfer annually reinvested
in local Hometown Legacy Projects:
$ ___________
• 10% of Wealth Transfer annually reinvested
in local Hometown Legacy Projects:
$ ____________
Reasons to Have a Foundation:
2. Endow Iowa Incentives
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Tax Credits (HF683)
20% on qualifying donations to permanent
endowments (subject to funding limits)
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Matching Grants (HF692)
$25,000 match for applications of eligible
certified community foundations and affiliates
(subject to funding limits)
http://www.iowasmartidea.com/endowiowa/
Reasons to Have a Foundation:
3. HF 2302 Gambling Bill Distributions
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1/2 of 1% to each county without gaming
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Must be certified community foundation or
affiliate with “county affiliate fund”
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75% allocated to grants to charitable
organizations for education, civic, public,
charitable, patriotic, and religious uses
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25% allocated to permanent endowments
http://www.cvcia.org/communityfoundation/
Reasons to Have a Foundation:
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Examples of the Opportunity:
Joe “San Diego”
Mark Linder
Roberta Ahmanson
Jane “Cherokee”
Sev “Monroe”
What is a Community Foundation?
• CFs are non-profit organizations governed by
a board of directors made up of members of
the local community.
• CFs primarily collect and invest endowment
capital and distribute portions of the
investment earnings as grants to other local,
non-profit organizations--often based on the
advice of donors to the endowment.
• Some earnings are reinvested allowing the
endowments to grow over time.
What do Community Foundations do?
• Nationally, donors directly advise about 80
percent of CF grants.
• CFs allow local non-profits to pool their own
endowments in the CF portfolio often at a higher
return and to receive annual earnings of 5%
• CFs often attract donors who want to leave
lasting legacies in their hometown communities
by contributing to specific interests, while
receiving maximum tax advantages.
Is your Community Organized?
Step 1: Identify all local foundations & Charities
• Begin to communicate, collaborate, fill-in gaps,
and improve philanthropy performance
Step 2: Determine Approach
• Create a Certified Community Foundation
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Affiliate with a Certified Community Foundation
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Develop an Independent Community Foundation
Considerations Regarding
Iowa Philanthropy Incentives
To Be Eligible For
• Endow Iowa Incentives and
• HF2302 Gambling Revenue Distributions
You must have access through
(1) a Certified Community Foundation or
(2) an Affiliate of a Certified Community
Foundation
Other nonprofits can request and indirectly receive
the grants from the local CCF or Affiliate
Why Affiliate?
• Legal, Accounting, & Financial Management
handled by Host Certified CF
• Frees-up local leaders to raise funds and make
local project decisions.
• Provides access to expertise for fund raising,
marketing, and donor communications
Considerations
• Costs associated with Certification
• Perceived ability to professionally manage funds
• Confidence that objectives will be met
• Willingness to give up some control over financial
management of funds.
• Attitude over local deposits and multipliers
Evaluating Certified Community
Foundation Affiliation Opportunities
• Compatibility of Mission, Culture, and Region
• Financial Returns, Reputation & Track Record
• Investment Risks, Fees and Charges
• Review of Affiliation Agreement and Control
Over Local Funds
• Availability of Services and Training
• Access to Expertise for Fund Raising,
Marketing & Management
• Procedures for Portability of Endowments
General Best Practices
• Respected board with broad representation of
diverse community interests in area served
• Identification of Strategic Community Initiatives
with donor appeal that can make a difference
• CVC recommends some focus on Community
Entrepreneurship and Philanthropy Initiatives
to help sustain community vitality long term
A Sample Community Foundation
(Affiliate) Board
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Attorney
Banker
Accountant
Community Economic Development
Extension Council Member
Community “Spark Plugs”
Organizational
Fall Back Position
• In counties where no countywide
Community Foundation Affiliate emerges as
an eligible gambling revenue recipient,
CVC will ask local County Extension to
organize the suggested Affiliate Board and
host a countywide affiliate fund so as to
provide a distribution mechanism for all
local non-profit organizations in the county.
Specific Best Practices
1. Annual Luncheon for attorneys, bankers, financial
planners, & accountants to highlight local successes
& provide resource notebook of all local charities
2. Use board to identify and make donor contacts
3. Provide donors with a choice of projects and
information about easy ways to give
4. Newsletters, brochures, and web sites to attract
potential donors and keep them in touch
5. Regular fund raising events, campaigns,
phonathons, etc.
Words of Wisdom
• Move from “Squabble” to “Collaboration”
• Keep your eye on the prize: Community
Vitality
• Inspire Donors to help make a difference in
their Hometowns
Reasons for Action:
Do you have mechanisms of contact and
attraction for your community’s:
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Joe “San Diego”
Mark Linder
Roberta Ahmanson
Jane “Cherokee”
Sev “Monroe”
Now let’s hear from you.
What are your experiences and what do you
see as next steps?