Newsletters

Community Philanthropy Update—May 2019

Friday, May 17, 2019 - 12:50 pm

Brad Ward

This time of year, I receive numerous inquiries about administrative fees. Perhaps it is first quarter investment return reviews or something in the spring air—but my response to the question about ‘lowering fees’ is fairly consistent—why would we encourage the lowering of fees?

To begin, I have three questions—

To what end are you considering lowering fees—to be competitive (against whom)? Does workload suggest you don’t need that much revenue to complete the work (hardly the case)? What other reasons are driving this conversation?
Who benefits and why is it necessary —does the reduction go back into the fund for donor satisfaction? Or, if driven by strong revenue surplus from admin fees, could this amount be allocated to the growth of your unrestricted/discretionary fund(s) pool?
What pressure will it place on your capacity – how can you better operate and/or expand to deliver superior service to donors, innovate and drive community leadership, or advance the impact of your grants within your community?

Typically, the lowering of fees is driven by what I see as banking mentality. But community foundations should not be merely transactional—they are designed to be transformative in the philanthropic and non-profit space in our communities. Our administrative fees fuel our capacity to do good beyond just “administrating” funds. If getting dollars out the door was our sole purpose, Frederick Goff would have left that check-writing work to the banks 100 years ago, given their efficiency in moving money around.

Community foundations are afforded the opportunity and responsibility to engage and inspire philanthropy and improve opportunities for everyone in our communities. As Council board member, Tony Mestres, CEO of Seattle Foundation recently said in an email to peer CEOs:

“Our shared challenges and widening gaps, from climate change to economic disparity, seem to be growing faster than our current capacity to address them. Given this moment, our mission as local civic leaders, philanthropic catalyzers, and grantmakers, is imperative.”

I hope you will consider the 98 percent | 2 percent rule. That is, 98 percent of the resources we receive from donors are directed at whatever matters most to the donor. The remaining 2 percent (as represented by the common cap of fees assessed on endowed funds) is for the common good, and therefore can power your ability to act on complex challenges facing our communities.

Yes, I’m purposefully ignoring market pressures of national DAFs for this conversation. My colleague once suggested community foundations are the high-quality, organic, local farmer’s market when it comes to community philanthropy. We do not seek to compete as a national, lower price-mass volume discount provider of services. Let’s build on this endeavor to strengthen our narrative to produce quality, local community philanthropy—and really stretch ourselves to go beyond the transactional and into the transformative. If not us, who will?

As always, I welcome your thoughts and reflections in the spirit of our shared fate.

My Regards,

Brad Ward
Director, Community Philanthropy
Phone: 202-991-7612
Brad.Ward@cof.org

In Person Events

Leading Together Conference Highlights

Over 200 community foundation executives joined the Leading Together Conference in Miami and were spotlighted across activities from CFE Fundamentals, the Community Foundation Executive Roundtable, pre-conferences, fireside chats, sessions and leadership in action events.

Check out the collection of highlight videos to spot your peers and hear comments from leaders, including:

Barbara Bartle, Lincoln Community Foundation
Mary Ann Gabino, Puerto Rico Community Foundation
Simeon Banister, Rochester Area Community Foundation
Judy Sjostedt, Parkersburg Area Community Foundation
Jonse Young, Grand Rapids Community Foundation

Don’t miss the powerful opening remarks by our new CEO, Kathleen Enright, captured in this Chronicle on Philanthropy article and in this conference highlight video, pushing the Council and our sector into a new era of transformation and pledging greater accountability.

EXECUTIVE ROUNDTABLES

Deborah Elwood, CEO of CFLeads joined us in Miami at the Executive Roundtable and her graceful presence reminded me that her January memo to the field remains my favorite piece thus far in 2019.

It remains relevant for the continued thread we are weaving throughout each of our Community Foundation Executive Roundtables, where we are exploring potential answers to big audacious questions for the field. Deborah’s memo is a valued tool for generative discussion among your staff and governing boards.

Our next executive roundtable is in June in Seattle. This fall, we will issue an executive summary of what we heard in meetings with more than 120 community foundation CEOs over the last four months. Thanks to all who have participated in these conversations in Washington DC, Tucson, Miami, and Seattle.