Community foundations have legacy of philanthropy

CEDAR RAPIDS — Every year in Iowa, foundations give hundreds of millions of dollars to non-profit organizations throughout the state. While various foundations operate differently, they all have one thing in common — a desire to better the communities in which they're based.

Cedar Rapids foundations, for example, helped the city rebuild after the Flood of 2008, contributing millions to construction of the new Cedar Rapids Public Library and development downtown such as the revitalization of Greene Square.

One foundation, the Greater Cedar Rapids Community Foundation, was founded in 1949 and has donated $87 million in grants since it became a 501(c)(3) in 1992 and began accepting funds from the public.

Community foundations exist to encourage philanthropy in the community, said Les Garner, president and CEO of the foundation. Its assets have grown from $3 million in 1992 to $142 million at the end of last year, he said.

'We are here to encourage and promote philanthropy and to see that charitable giving can play a constructive role in the life of the community,' Garner said.

Becoming a community foundation means a couple things: it raises funds to give in a way that solves community problems.

Unlike other foundations, community foundations manage hundreds of funds established by donors to provide ongoing support for a specific non-profit or purpose. Other types of foundations, such as independent foundations that typically are established by individual donors or donor families, have one fund and use a board of directors to decide how to award grants.

They also don't accept donations but rely on the wealth established by the family.

Community foundations make up the smallest percentage of these types of charitable organization in the country — there are only 743 throughout the United States, according to the New York City-based Foundation Center. That's one percent of all foundations in the country, giving a total of $4.9 billion.

But these organizations still can make a big impact in their cities. In 2014, the Greater Cedar Rapids Community Foundation awarded $7.3 million in grants to non-profit and public organizations and nearly $100,000 in scholarships. The majority of those grants, 22 percent, have gone to arts, cultural and humanities organizations.

Education came in a close second, receiving 21 percent of grants last year. This makes the Cedar Rapids foundation the second-highest-giving foundation in Iowa, following the Greater Des Moines Community Foundation.

The grants, which are awarded by the organization's board, go toward projects or non-profits in which 'private philanthropy' can make a difference, Garner said.

For example, the foundation awarded a grant to the ARC of East Central Iowa — a non-profit that aims to empower those with intellectual and related disabilities — to help it build an endowment to soften the blow of unexpected changes in funding from other sources.

It's common for community foundations to help non-profit agencies build their endowments so they can serve the community for years to come.

Unlike other types of foundations and some non-profit organizations, community foundations don't participate in fundraising drives. Instead, they rely on gifts from people within the community.

An estate gift, a donation left by someone after their death, can significantly boost a foundation's assets. The donor also can request the gift go toward a specific purpose. Last year, the organization received $7.7 million in total contributions from the community.

'We've seen a steady growth over the last few years,' Garner said. 'I think that reflects a growing interest in and growing commitment to philanthropy. People, I think, are particularly aware of the potential good they can do ...

So, we're glad to help them make that happen.'

While some philanthropists may choose to donate directly to non-profits, there are benefits to going through a foundation, Garner explained. Board members allocate funds to emerging needs.

The Independents

Another huge benefit to donating to a foundation, Garner said, is the state's Endow Iowa Tax Credit Program, which offers 25 percent credits against Iowa income taxes for gifts made to a permanent endowment at community foundations.

Community foundations are one of four main types of foundations in the United States. Independent foundations, generally established by individual donors or donor families, make up 91 percent of foundations in the country. That's 78,582 across the U.S. that gave $35.4 million to non-profits in 2013, according to the Foundation Center.

In Cedar Rapids, one independent foundation (also called a private foundation), Hall-Perrine Foundation, ranks in the top 10 highest-giving in the state, according to the Grantsmanship Center, a training organization for non-profit agencies based in Los Angeles.

The Hall-Perrine Foundation, incorporated in 1953 as the Hall Foundation, contributes about $6 million every year to non-profit capital projects in Cedar Rapids. Its assets have grown to more than $103 million over the years, contributing funds to help build city landmarks such as the new downtown library, the National Czech & Slovak Museum & Library, and the Cedar Rapids Museum of Art.

And the foundation plans to help the community for years to come, said its president, Jack Evans.

' ...

We're going to be here in perpetuity,' Evans said. 'I'll have a successor. That person will have a successor. If we manage our money well, that person will have a successor. Every time I walk into this office, I think of all the good we've been able to do, but if we manage the organization well, that will just continue on.'

The organization was founded by Howard Hall, his wife Margaret Douglas Hall, his sister Irene Hall Perrine and her husband, Beahl Perrine. Upon the deaths of the Halls, they left large portions of their estates to ensure the continuance of the foundation.

While some foundations have more programmatic missions, the Hall-Perrine Foundation contributes to capital projects. It recently pledged $4 million to help Mount Mercy University convert land into athletic fields, a project that cost $14 million total.

Large corporations also can establish foundations, often choosing to make donations in areas related to their business. Corporate foundations make up 3 percent of foundations in the United States, contributing $5.5 billion to non-profits across the country.

The Rockwell Collins Charitable Corporation, for example, has given about $5 million annually over the past five years. Established in 2002, the organization focuses mainly on giving to science, technology, engineering and mathematics programs as well as arts and culture programs.

'Typically, in a lot of corporations, we want to make sure we make our donations in areas that make sense, in areas we cannot only give money but offer up volunteer opportunities for people,' said Jenny Becker, the executive director for the Rockwell Collins foundation.

Unlike community foundations, however, private foundations are tied directly to the company. It doesn't raise money — Rockwell Collins sets aside millions of dollars every year to go toward the foundation. And corporate foundations are also more likely to be negatively affected when the company's fortunes clump. Rockwell Collins's giving, for instance, has remained steady but flat for the past four years, a direct impact of the decline in government spending.

However, one thing that has changed over the years is the sense of social responsibility younger employees have brought to the work force, Becker said.

'They want to work for a company that gives back to the community,' Becker said. 'We have really tried to think of ways ...

to make sure we are not only responding to the needs of the community but also responding to the desires of our employees.'