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TOOLS
FOR AFFILIATED FUNDS
Best
Practices of Local Community Foundations
DEVELOPMENT / EDUCATION / OUTREACH
Those funds having the most success in growing the assets of their local
foundation have board and committee members who understand the importance
of developing a relationship with donors. Several methods are used.
- Emphasis on Issue-Orientated
Funds
- Emphasize Unrestricted
Endowments
- Understanding the Difference
between Income and Assets
-
Membership
Dues
- Strategic Grant Making
- Emphasis on Donor Advised Funds
- Professional Advisor Contacts
- Media Contacts
-
Alumni
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Emphasis on Issue-Orientated Funds |
Rural communities are faced with critical issues
today: quality of life issues
to retain and recruit young families; health care issues to allow senior
citizens to age in place; educational issues of teaching local students of
all ages to succeed in an ever-changing world.
Many successful community foundation funds have
gotten their start by raising money for specific projects to deal with
those kinds of issues in their hometown. There are many examples of
Nebraskans who give very generously to such projects if they feel they can
help solve a need or problem for their fellow residents.
Burwell started by raising money to make improvements
to their City Park. Then they addressed Health Care issues by bringing a
local doctor back to town. To solve the problem of accessibility into the
old Library, the community foundation helped raise the money to move into
a new building. Since 1996, the Burwell Fund has helped with 19 different
community projects. Over $205,000 has been raised and reinvested for those
projects.
Page Community Fund is concentrating on housing
issues. Callaway gathered local donations to build a much needed community
center
The David City Area Foundation has successfully
funded several different project fund accounts that address issues with
youth, education, and recreation.
We have noted that communities that are members of
NCIP (Nebraska Community Improvement Program) and/or the Nebraska Lied
Main Street program are typically more focused and get projects
accomplished.
The Nebraska Community Foundation can provide
training to assist communities as they raise money for Capital Campaigns.
We can give examples of how events build awareness, but not much money. We
can show the importance of annual gifts; we can show the importance of
getting large donations first; and why it is better to announce success
rather than intentions.
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Emphasize Unrestricted Endowments
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The ultimate goal
of the most successful community foundations is to build a reserve of
unrestricted endowed funds. The principal of the gifts is never spent,
only the earnings. Permanent endowments are the key to the success and
perpetuity of a community foundation.
Endowment
earnings can help offset the operating costs of public facilities like
swimming pools, community centers and libraries.
Most endowments
are funded with large gifts given from assets from estates. Memorial
gifts are also a excellent way to fund endowments. Two businesses in
O’Neill contribute to local community endowments with memorials sent
with sympathy cards.
Only a few
communities have had the vision to start their foundation by asking
donors to build an Unrestricted Endowment by asking donors to fund it
with cash from their current income.
McCook
(population 8,112) has succeeded in selling that vision in their local
community. It started a
Founders Club. Donors were challenged to pay or pledge $1,000 to become
a founder. After one year, $40,000 was raised.
Red Cloud
(population 1,204) established their endowment by meeting a Legacy
Challenge. A benefactor challenged the community to match a $100,000
donation, which they did. Now the community has a $200,000 endowment.
Shickley
(population 368) also found a donor willing to make the same leveraged
challenge if the money was raised within 3 years. After 18 months,
Shickley is right on schedule, having met more than 2/3 of their goal of
raising their permanent endowment.
Keith County
exceeded the amount required in a 2 to 1 challenge grant.
Raising the money
is the first step. The second step is to strategically reinvest the
earnings to help the community (see item 11 below.)
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Understanding the Difference between Income and Assets
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Our generation of
Americans often expects instant solutions to our problems. But it often
takes years to solve the big community issues. Ensuring the future of a
community can take generations of time.
Successful
community foundations understand the difference between asking donors to
give from their income (checkbooks) for specific projects/issues, which
are short-range goals, and asking donors to give from their assets
(planned giving through their wills from their estates) toward
endowments to fund long-range goals.
The Nebraska City
Foundation compares it to the difference between the leaves and the
roots of a tree. The green leaves appear each spring and thrive for the
summer, but by fall they dry up and blow away…they must be regrown
each year. The roots, on the other hand, although being hidden deep in
the soil, are the permanent source of stability and the life source of
the tree.
Gifts of income
can lead to planned gifts. Examples can be found in Diller and Spencer.
The successful
communities understand the importance of the role of their local
financial planners to maximize the gifts of assets through planned
giving. (See item 13 below.)
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LIST
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Membership
Dues
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Encouraging local
citizens to become dues paying members in the local community foundation
is a proven method of building a wide base of awareness, involvement,
and support.
Affordable annual
dues allow local people of all income categories to get involved. The
membership list creates a mailing list so the members can be sent
newsletters, updates and marketing information.
Paying annual
dues gets citizens into the “habit of giving” which can lead to
large planned gifts from estates.
Burwell uses
membership dues to cover their operating costs, so that all dollars
donated to a specific project are paid to that project without any fees
being deducted.
Another community
uses excess membership dues to fund scholarships and a portion goes to
an annual contribution to their unrestricted endowment fund.
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Strategic Grant Making
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Successful community foundations
have formulated policies for granting money that will have the best
impact for the future of the community.
They use grants as a catalyst for
change and a means of creating new wealth. An example would be scholarships for non-traditional students.
Nebraska City granted a scholarship to a local nurse who was employed,
married with children, but wanted to go back to school to further her
career. Her advanced education will allow her to earn more money from
her current employer, and thereby contribute more money into the local
economy.
A family
foundation in Bruning makes grants to their Fire Department and Rescue
Squad volunteers to help subsidize their costs and time for all the
training that is required each year, thereby retaining and recruiting
these important volunteers.
Stuart has
concentrated on rehabbing existing houses and building new homes to
retain and attract young families to their community. They are planning
to convert a vacant building into a technology learning center for
youth.
Grants made by
the Valley County Fund are also excellent examples.
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Emphasis on Donor Advised Funds
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Most donors want
to know how their money will be spent. They are accustomed to being in
control of their funds. Many get satisfaction in seeing the results of
their charity.
A Donor Advised
Fund allows the donor to be actively involved in the decision making
process. They are able to pass on their advice and wishes to the local
board/committee.
Nationally, we
are learning that Donor Advised Funds are becoming a very popular means
of charitable giving.
Examples can be
found in Talmage, Maywood, Valentine, Norfolk, and Erickson.
Donors like to
strategically reinvest, but often need some ideas from the local
leaders. It is important to keep them informed with personal contacts.
This is an opportunity to tell them thank you and reconnect with their
areas of interest.
Nebraska
Community Foundation can provide locally customized brochures that
describe this DAF product. We can also provide specific scenarios for
conducting confidential meetings with potential donors.
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Professional Advisor Contacts
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Experience has
shown that the largest gifts to community foundations are the result of
the trusted personal relationships between the donor and professional
advisors such as Attorneys, Bankers, Financial Brokers, and Life
Insurance Agents.
Successful local
committees contact their professional advisors personally to make them
aware of the local community foundation.
Many Fund
Advisory Committees have Financial Planners serving on their Boards.
These
professionals need to be made aware and reminded often of the needs and
opportunities within the community. They should given annual updates and
brochures for their client waiting areas.
These
professionals also need to understand that the Nebraska Community
Foundation encourages local control, so the local services of the
individual professionals continue to be utilized, and monies in amounts
of $100,000 or more are invested as the donor directs, which often is in
local banks or with local brokers that they know and trust.
The Nebraska
Community Foundation maintains a list of some 1,300 Financial Planners
and e-mails them a monthly newsletter.
The Nebraska
Community Foundation provides a series of training seminars for local
professional advisors.
Examples:
Wymore, Bassett, O’Neill and McCook.
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Media Contacts
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Surprisingly,
even the most successful community foundation funds experience a lack of
public recognition of what they are and what they do.
Local Newspapers and Radio stations
can be good advocates, if their reporters and owners are kept informed
on a regular basis.
Successful Fund Advisory Committees
make one-on-one contacts with media personnel to build a trusting
relationship. They make sure the local media gets their stories first. A
representative of the community fund personally takes press releases
from their local foundation to update the general public on their
efforts.
Some board members offer to be
interviewed on local radio morning talk shows. They prepare a script of
topics in advance with questions and answers. They concentrate on one
topic per interview.
The Nebraska Community Foundation
has a lot of ready-made news articles available on our web site.
Copies of the Legacy Column articles
can be found on the NCF web site. Take them to your local media and ask
them to publish the articles as “fillers”.
There are many examples
of FACs with good
media relationships such as Atkinson, Ogallala, Creighton, Hyannis.
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Alumni
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Former residents are often an
overlooked resource for donations and planned gifts. Red Cloud and
Shickley found former residents willing to make a Legacy Challenge.
Many people who grew up in the
community have done quite well, financially, and they often have fond
memories of their hometown. Tilden’s $3 million library is a perfect
example.
Successful communities have found
that the alumni will give back if they are made aware of the needs and
opportunities. Stratton has a good example.
High School
Alumni Reunions are a great place and time to make contact with people
who care about their old hometown. The Imperial Community Foundation
gives bus tours annually to their High School Alumni to show them the
current community projects and projects.
McCook’s Founders Club will
encourage honored classes to pool their money to be recognized on their
$1,000 founder plaque.
Consider sending letters and
brochures to alumni and former residents, informing them of the
opportunities to give back to their hometown through your community
foundation.
Develop your website to appeal to
the alumni.
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