Community Foundation of Greater Birmingham President Kate Nielsen, here at the site of Railroad Park in downtown Birmingham, says the nonprofit wants to foster projects throughout the community.
A new role for The Community Foundation of Greater Birmingham emerged 21/2 years ago, as Kathy Stiles Freeland faced a roomful of people who fund nonprofit groups.
"Every chair at the table was filled," said Freeland, executive director of Ruffner Mountain Nature Center. "The chairs along the wall were filled. It was -- if you're a fundraiser -- it was like your dream."
Foundation President Kate Nielsen had gathered the group to hear Freeland and others pitch a joint park plan for Ruffner, Railroad Park and Red Mountain Park. The foundation was priming the pump with $1 million and asking others to join in. Ten foundations quickly pledged $6 million for the parks, and funding grew to $15 million within a year.
"Nothing like that had ever been done in Birmingham in all the years I've lived here," Freeland said. "Only Kate could pull it off."
"Rather than each of us doing our little thing," she said, "we created a much bigger picture than any of us."As it meets Monday for its 50th anniversary, the foundation wants to stimulate more big-picture projects such as the three-park model.
"For the parks we said, 'We want you to consider joining us,'" Nielsen explained. "It was very successful. ... Imagine if we were able to do that again and again."
At the same time, the Community Foundation has become a growing source of philanthropic wealth for the metro area, as its endowment increases through investments and donations.
Consider $3 million donated to the Community Foundation in 1972 by the estate of Margaret Cameron Spain. Over the years, that $3 million has grown to a total endowment of $20 million. Yet at the same time, the Spain fund also has paid out $30 million in grants to area nonprofits.
Motivated by passion
The Community Foundation of Greater Birmingham is one of more than 700 U.S. community foundations -- nonprofit public charities that manage a common fund donated by people or corporations.
Birmingham's foundation is one of the largest. It ranked 49th in endowment in 2007, with $164 million, according to the most recent data available from The Columbus Foundation, which surveys community foundations nationwide.
The foundation also ranked 42nd in the amount of grants paid, $13.6 million, including helping Shelby County families attend the Alabama Symphony. It was 35th in the amount of money received from donors during 2007, with $27.9 million.
The recession in 2008 knocked that endowment value down by 21 percent, "which is extremely painful," Nielsen said. But the Community Foundation still was in the top quartile of community foundations for fund performance last year, thanks to defensive moves away from equity investments, Nielsen said.
The drop in endowment does not mean a corresponding drop in grant dollars. Annual grants are pegged at 5 percent of the average fund value over the most recent 12 quarters, a calculation that smooths funding levels.
A large source of donations to community foundations is wealthy people, who often gain some tax advantage from the gift. Still, Alicia Philipp, president of The Community Foundation for Greater Atlanta, said, "The tax advantage does not motivate whether to give."
"It motivates how much to give," she said. "Nobody ever gave money because of tax breaks. They have to first be motivated by passion."
Flexible dollars
The Community Foundation is somewhat complex in structure. Donors have created in excess of 380 grant-making funds within the foundation, which have generated more than $200 million in grants to nonprofits over the years. Use of the money varies:
About 43 percent of grant dollars are "advised funds" that go to recipients selected by the grant donor, the donor's family or a corporation.
About 21 percent of grant assets are designated for particular organizations, such as the symphony or the botanical gardens; or they are endowments belonging to nonprofits such as the YWCA or United Way, which are managed by the foundation.
About 2 percent are scholarship funds, such as the Seeds of Love Scholarship Fund to encourage young African-Americans interested in engineering or medicine.
About 4 percent are "fields of interest" funds, directed at initiatives such as countering domestic violence against women and aiding the environment, children and education.
A vital 30 percent are funds that are flexible -- the Community Foundation can decide what and where the need is. The $1 million for the three parks effort came from such funds. Those funds also helped finish the swimming pool at the Midfield Community Center, and they helped begin the Kid One Transport, the dream of a Hoover fireman, which has provided transportation to more than 16,000 mothers and children in need to health care.
"The donors of flexible funds are so committed to the community," Nielsen said. "They say, 'I want it to be used for opportunities down the road that I can't foresee.'"
One great example of this flexibility is the $3 million donated to the foundation by the Spain family in 1972. When the Spain gift was made, Loveman's still was an active, downtown department store. Twenty-six years later, the Spain fund helped create the McWane Science Center in the vacant Loveman's building.
Grant money changes people's lives, such as the Yes We Can! grassroots effort to discover what Birmingham parents and residents want for city schools and establish a schools foundation. Or the PEER program, which delivers Alabama-grown produce to senior citizens in the East Lake area.
Make change happen
Flexible dollars will be important for the future of the five-county metro area the foundation serves.
"Three years ago, when we planned our 50th anniversary, we asked what the community -- donor and nonprofits -- wanted from this foundation in the next 50 years," Nielsen said. "We got the same answer from everybody: Take on big projects that we need to address."
"We can't fund it all ourselves," said Nielsen, a Birmingham native whose father, Crawford Johnson III, was a longtime civic and business leader. "But we can help make change happen."
As part of the 50th anniversary, the Community Foundation is raising money -- $10.2 million so far -- for its new Community Catalyst Funds. Nielsen tells donors, "Here's an opportunity to be part of a big change."
Besides serving as a catalyst, the foundation also plays the role of convener -- calling people together to examine and tackle emerging challenges.
In October and December, for example, the Community Foundation and several nonprofits working on the front lines met to find out how the souring economy was affecting metro residents.
"It was disturbing and heart-wrenching," Nielsen said. Agencies were seeing what she calls "the newly poor," people who never before had asked for help.
Out of the meetings came a gift to the United Way crisis fund for food, clothing and shelter, and a Community Foundation housing stability fund in February to help nonprofits that provide rental and mortgage assistance. That stability fund already has kept 50 families in their homes, including one widow in Blount County, said Emily Jones Rushing, director of communications for the foundation.
It was one more instance of the foundation finding and meeting needs, much as it did in helping buy school lunches for children four decades ago, or helping set up the United Way food bank 27 years ago.
'I want accountability'
Birmingham is recognized as one of the most-giving communities in the nation, said Neal Berte, president emeritus of Birmingham-Southern College. He thinks the Community Foundation has had "tremendous impact" and helped foster that generous spirit, aided by the accountability the foundation demands from grantees.
He said:
Potential grantees have to have a professional, outside audit before being considered for a grant.
Grant proposals have to clearly state goals and tell how grantees will measure results.
Foundation staffers vet each prospective grantee, to see whether the proposal seems doable and is financially responsible.
Grantees then have to report annual progress to the foundation.
Some multiyear grants have been terminated by the foundation in the second or third year when progress was found to be lacking, said Berte, who recently established the Berte Family Fund.
"As a donor," he said, "I want accountability."