And the GIFT goes on...

“We believe the best way to assist Indiana communities is to help them generate local solutions to local problems. Our intention is to aid Indiana in developing a perpetual legacy of self-reliance to serve the state’s communities for generations to come.”
-Thomas H. Lake, Chairman, Lilly Endowment Board of Directors, 1990

Before “gift” was a verb, it was a noun – and in Indiana it was GIFT, an all-caps philanthropic initiative of Lilly Endowment Inc. to help Indiana communities build and strengthen a network of community foundations.

Giving Indiana Funds for Tomorrow was announced in 1990 with an initial commitment of $47 million to enable Indiana communities “to generate local solutions to local problems with the intention to aid Indiana in developing a perpetual legacy of self-reliance to serve the state’s communities for generations to come.” In the 24 years since then, GIFT has gone through five phases – and is now entering its sixth.

In 1990, fewer than a dozen community foundations dotted the Indiana landscape with assets of about $100 million, nearly $70 million of which were held by the Indianapolis Foundation. Now there are more than 90 community foundations that have regularly participated in GIFT, and their combined assets are approximately $2 billion. Each of Indiana’s 92 counties has at least one community foundation that serves it.

Nuts and bolts

GIFT phases offered a mix of funds for asset building, technical assistance, operating expenses, and community programs and projects recommended by the community foundations.

In the early years, few executive directors had much experience with community foundations, let alone with their esoteric vocabulary: donor-advised funds, designated funds, field-of-interest funds, permanent endowment funds, appreciated securities, testamentary gifts and component parts. They were quick learners.

“In the beginning, we were trying to explain what community foundations are,” says Rose Meissner, president of the Community Foundation of St. Joseph County in South Bend. “The nonprofit people sat up in their seats, and the business people seemed to be eyeing the exits.” That foundation now boasts assets of $157 million.

Throughout the years, the Endowment turned to the Indiana Philanthropy Alliance (IPA), formerly the Indiana Grantmakers Alliance, for the bulk of the technical assistance. “Community foundations are complicated. There are always new players, and the need for training will never end,” says Rosemary Dorsa, IPA’s vice president. Traditionally, IPA has performed as troubleshooter, trainer and “encourager.”

As the community foundations matured, IPA developed programs to respond to continuing and emerging needs. There were “boot camps” for executive directors and “deep dive days” when staff devoted a whole day to one topic. “The field is full of wonderful, sharp people with excellent capacity to expand leadership,” Dorsa notes.

Funds for projects

Besides providing incentives for endowment building, several GIFT phases offered opportunities to support local charitable projects. The Endowment offered these opportunities because many community foundations found it difficult to raise funds needed for community capital projects while building their endowments. Moreover, the projects were more visible and tangible than endowments and therefore helped raise the community foundations’ profiles.

And they went at it with gusto. Community foundations prioritized and recommended specific projects important to their local communities. The Endowment responded, awarding local grants that helped communities:

• build library additions and purchase new fire trucks
• renovate playgrounds and create school and community computer labs
• construct new town swimming pools and local animal shelters
• improve Little League parks and create workforce development programs

Taking a break

After the first 10 years of phenomenal growth, it was time for a “breather,” time for foundations to pause and reflect on past accomplishments and current challenges. An $11.5 program, “Taking Stock,” was a voluntary self-assessment program announced in 2000. The community foundations engaged in thoughtful, systematic organizational self-assessment to examine their strengths and areas they could improve. They also sought the opinions of organizations in their communities and prepared a report to the Endowment. The responses affirmed one of the basic purposes of the GIFT initiative: to build the capability of local communities to shape their own destinies by having local control over the use of their community foundations’ resources.

Following “Taking Stock,” the Endowment announced GIFT Phase V in 2001. With the theme of “Building Self-Reliance,” it encouraged the state’s community foundations to raise funds for their unrestricted endowments and organize their operations to be more effective and efficient.

To further the self-reliance aims of GIFT, the Endowment launched in 2004 the Sustaining Resource Development (SRD) program for Indiana community foundations. The $14-million program provided matching support to help the community foundations design and execute three-year strategic resource development plans to help them build their fundraising and development capacity. Technical assistance and educational programs were provided by IPA and the Indiana University Center on Philanthropy, now the Lilly Family School of Philanthropy.

The Next Generation

In 2010, the Endowment began a new program to enable Indiana college students to serve in paid internships at community foundations. So far more than 200 interns have served in these positions, which have benefited both the interns and the community foundations. The community foundations report that the interns have been especially helpful in enhancing their communications and IT endeavors.

Beyond dollars and cents and beyond borders

Behind all this activity, of course, the community foundation leaders were building credibility with and support from their fellow citizens. They marshalled diverse groups to serve on their boards and committees and to address local problems. Galvanized by a shared vision, local people helped raise and route local money for a wide variety of purposes. Endowment dollars made it possible for local organizations to attract other investors to the table.

Throughout this process, the Endowment increasingly saw community foundations as reliable partners in other statewide programs. The initial venture was the Lilly Endowment Community Scholarship Program created in 1998. It offers full-tuition, four-year scholarships to Indiana students attending an accredited Indiana college or university. The community foundations took the lead for this program in each county. Under the program, which is administered by Independent Colleges of Indiana (ICI), the foundations are instrumental in developing the scholarship guidelines for their county, and they select the scholarship winners subject to the final approval by ICI. It’s worth noting that, in Ripley County, a former scholarship winner has served on the community foundation board and is headed to be its president next year.

CAPE aims at education

In 1999, the Endowment introduced a new competitive initiative, Community Alliances to Promote Education (CAPE). It called on the community foundations to address what may be Indiana’s most critical issue: the low educational attainment of its citizens. By 2005, the Endowment had invested $240 million in educational programs in 44 counties.

Preparing CAPE proposals required the foundations to convene local citizens, determine their communities’ most compelling educational needs, and describe how they would use the grants strategically to address those needs.

The foundations responded enthusiastically. They placed ads in newspapers soliciting opinions on education. They called together college and university leaders, school superintendents, professors, business people, social service workers and youth workers, teachers, librarians and parents. Responses were as diverse as the communities.

Grants supported a variety of efforts to address critical concerns that included improving the quality of and expanding access to high-quality early childhood education programs, providing job training for displaced workers, offering English as a second language to growing Latino populations, providing professional development for teachers, offering literacy education and training, strengthening parents’ interest in and ability to support education, and expanding the use of distance-learning programs.

Bigger stage

By 2007 the Endowment believed that some community foundations could play on an even bigger stage. With collaboration in mind, the Endowment began asking their leaders whether they were interested in helping envision and lead regional advancement efforts.

During the next two years community foundations played central roles in three regional initiatives. They included:

• Economic Opportunities 2015, a $38-million initiative involving 10 counties in southeastern Indiana. The Heritage Fund of Bartholomew County (the county’s community foundation) and the Columbus Learning Center Management Corp. helped coalesce a broad partnership of educational organizations, businesses and nine other community foundations in the region. The initiative capitalized on the presence of Cummins and Honda Motor Co. to raise educational attainment for future workers and improve job training for existing workers.
   
• Talent Opportunity Success 2015, an initiative designed to build and strengthen the workforce in an 11-county region in northeast Indiana, with a specific focus on the region’s significant defense and aerospace industry cluster. The region had been struggling with the long-term trend of disappearing manufacturers, falling per capita income, and rising unemployment. A $20-million Endowment grant was made to Community Partnerships, an affiliate of the Community Foundation of Greater Fort Wayne, which collaborated with the Northeast Indiana Foundation and leaders in industry, education and government to retrain workers, strengthen advanced manufacturing and engineering educational programs, and improve preparation of K-12 students for a knowledge-based economy.
   
• OrthoWorx Initiative, an effort to marshal the industry, educational and community forces in the area surrounding Warsaw, Ind., to maximize the potential of its orthopedic industry cluster. Known as the “Orthopedics Capital of the World,” Warsaw is home to three of the world’s five leading manufacturers of orthopedics devices. The Endowment awarded a $7-million grant to Kosciusko County Community Foundation (KCCF) to undergird the charitable and educational aspects of the initiative.

Suzanne Light, KCCF’s executive director, says, “The community foundation was uniquely positioned as a neutral catalyst and convener to help launch this initiative. For the first time organizations in Warsaw really began to work together.”

Looking ahead … and back

And now there is the $66 million GIFT Phase VI announced in July 2014 that offers two basic types of grant support each with incentives for community foundations to raise additional matching dollars from donors: 1) funds to build unrestricted endowments and 2) funds to be used for any charitable purpose chosen by the community foundation, such as operating expenses, community programs and capital projects and endowments for such purposes. The matching incentives are designed to encourage board engagement and giving of unrestricted endowment funds.

What challenges lie ahead? Executive directors say they need to address board governance, which can affect the whole culture of a foundation. But they also need to raise unrestricted funds and continue to strengthen credibility in their communities. Yet there is great pride among foundation leaders as they reflect on what their local communities have already achieved.

“This is a generous community,” says Doug Inman, executive director of the Portland Foundation in Jay County. “GIFT has spurred people to give for long-term gains because people understand that it’s for the future of their own community.”

“It’s never just about the money,” says Meissner. “It’s about solutions and convening people around important causes.”

Looking back over the GIFT years, the Endowment notes that the success of Indiana’s community foundations has far exceeded expectations. The aggregate value of the assets of Indiana community foundations that have regularly participated in GIFT has increased from about $30 million in 1990 to nearly $2 billion, and those community foundations have paid grants totaling more than $915 million. The community foundations’ growth in aggregate asset value is the result largely of the generosity of Indiana residents and market appreciation. Since GIFT began, the total amount the Endowment has provided in matching grants for endowment building has been $258 million, which is a fraction of the contributions they have received from other sources.

Commenting on how GIFT helped unleash the philanthropic potential of the people of Indiana, Beth Tevlin, the long-standing executive director of the Wabash Valley Community Foundation, says, “Gift Phase I created the culture. We had to raise $2 million to get $1 million. We figured we would get most all of the funds from four families, but the biggest money came from people we didn’t expect.”

Ace Yakey, the Endowment’s vice president for community development, agrees. “The success of the community foundations would not have been achieved without the imagination, generosity, commitment and leadership of thousands of donors, volunteers and foundation staff members through the state,” says Yakey. “We are amazed at the Hoosier philanthropic spirit, and their success has been a gift to us.”

Gretchen Wolfram was Communications Director for the Lilly Endowment from 1992 to 2012.