Cumberland Community Foundation to build sustainability

From: Philanthropy Journal

Serving a community with serious need but little support from institutional philanthropy, the Cumberland Community Foundation has tasked itself with helping local nonprofits build endowments that can ensure their continued survival.

Over the next eight years, the Fayetteville-based funder will focus on helping about 30 local nonprofits raise money to create or bolster their endowments.

"Until 2020, our primary role is to build sustainable philanthropy," says Mary Holmes, the foundation's executive director. "We are uniquely good at partnering with nonprofits to grow their financial support so they can serve their clients."

For the past 31 years, the funder has fulfilled that role primarily by acting as a conduit between residents of the county and the needs and issues they care about.

And in true local fashion, the vast majority of donations to the foundation over that period have come in the form of small gifts, with more than three-quarters of the 23,780 gifts the foundation has received in its history totaling less than $250 each.

In fact, among that subset of gifts, the average size is $47.52, says Holmes, and last year the smallest gift was for $2.

"We have a really generous community," she says. "We are not a wealthy community. The people in this community earn the money they have; there is not a lot of inherited wealth."

And balancing out last year's $2 donation was a $10.5 million anonymous gift, the largest in the foundation's history.

The donor, who dropped out of high school to support his mother and seven siblings after his father died, "ran a small business and invested wisely," says Holmes.

He always regretted that he wasn't able to go to college, she says, and the gift from his estate now will be used to help high-school graduates from Cumberland County attend college.

The gift was hard-won, involving eight meetings over 15 years that focused in large part on the foundation's processes, investment results and the administration of its scholarship program.

"It's important for community foundations to focus on operational and structural integrity -- the boring stuff," says Holmes.

That's key, she says, because people are donating large sums of money for a community organization to manage when the donor is no longer alive to manage it himself.

"That's important to people who have worked really hard to earn their money," she says.

That historic gift helped boost the foundation to its best year ever, bringing the assets held in its 440 funds to $56 million at the end of 2011, up 33 percent from $42 million in 2010.

Grants last year totaled $2.8 million, up 22 percent from $2.3 million the year before.

About a third of the Cumberland Community Foundation's assets are held in unrestricted endowments, leaving the board with about $500,000 a year in discretionary grantmaking.

Like almost all other funders, the Cumberland Community Foundation felt the impact of the recession, but total grantmaking grew and the organization was able to avoid laying off staff or cutting benefits.

And all community foundations should have learned something from the experience, says Holmes.

"Community foundations are much more self-aware than they were before 2008," she says. "I think we are all more aware that we have to have a funding mechanism for the work we take on."

And while community foundations felt the impact of the recession, it rocked nonprofits, particularly in Cumberland County, a community that has fewer grantmaking foundations and corporations than areas like Winston-Salem, Raleigh and Charlotte, says Holmes.

"We have some incredibly high-functioning nonprofits in our community that have amazing pressure on their operating budgets," she says.

To help address that need, the foundation's board of directors last spring launched an effort to "build general operating support through endowments for local nonprofits."

While the effort will help nonprofits build endowments, "regardless of where they are held," Holmes says, the focus of the new initiative is about 30 nonprofits that have endowments at the foundation, with educational opportunities available to all local groups.

Based on a series of focus groups with local nonprofits, the foundation has assessed readiness for endowment-building and now will begin to design a program to meet the groups' needs, says Holmes.

That could include educating boards and staff on endowments, helping nonprofits approach donors, and providing "more intense assistance" with individual donors for the organizations that have endowments at the community foundation, she says.

"This next goal is about what the community needs from us," she says.

While Holmes calls the endowment effort "the next goal," community impact has been the aim of the funder since its inception, she says.

"We don't care how big we are," she says. "We care if we improve our community. We've stopped talking about how big our community foundation is; we're talking about whether we are granting enough and whether we are able to fund the things we need to fund."