Overall giving to 96 foundations representing over $414.6 million in annual revenue grew 4.7 percent in the three months ending in June 2015, compared to the same period in 2014, according to a Foundation Index introduced this month by Blackbaud.
Giving to those foundations grew 7.6 percent in the six months ending in June 2015, compared to the same period a year earlier. In comparison, overall charitable giving to 5,170 nonprofits representing over $17 billion in annual giving grew 1.4 percent in the six months ending in June 2015, compared to the same period in 2014.
What is the New Foundation Index?
Chuck Longfield, Blackbaud’s chief scientists and creator of the Index, said the new specialty index will serve as a useful tool for foundations.
“It’s a good benchmark for their own performance,” he said.
The new Foundation Index, which tracks revenue from giving to foundations, brings the number of specialty indices up to 11, including: Arts & Culture, Environment & Animal Welfare, Faith-based, Healthcare, Higher Education, Human Services, International Affairs, K-12 Education, Medical Research, Public & Society Benefit. Blackbaud also publishes a giving index for Canada.
Greater Kansas City Community Foundation: Serving donors
While the financial markets gradually have recovered since they crashed in 2008, a focus on providing good customer services to donors has helped generate annual giving of roughly $300 million a year over the past five years to the Greater Kansas City Community Foundation.
“The market plays a huge role, probably the biggest role,” said Brenda Chumley, senior vice president of foundation relations and operations at the Foundation. But the biggest factors driving annual giving, which grew to $393 million in 2014, are “the services you offer and the flexibility of your foundation,” she said.
A flexible service that donors value is the Foundation’s practice, which it adopted roughly 10 years ago, giving donors the option of using their own investment managers to manage the investment of the charitable funds they create at the Foundation, Chumley said.
Outside managers now manage roughly 70 percent of the $2.5 billion in assets at the Foundation, which was founded in 1978. Investment returns on funds managed by outside managers generally are comparable to those of the Foundation’s pooled funds that are managed by its own investment managers, Chumley said.
Key to the work of the donor relations staff is developing “one-on-one relationships” with donors, Chumley said. Each donor has a “personal contact” at the Foundation, and each donor relations officer meets at least once a year with each donor in her or his portfolio, unless a donor prefers to have no contacts. Whether the meetings are in person, over the phone or not at all, the goal is “being respectful of their needs and making sure we’re fulfilling them,” Chumley said.
Herbalife Family Foundation: Targeted marketing
Working closely with Herbalife, the global nutrition company, the Herbalife Family Foundation raises money from people throughout the world who sell Herbalife, and from Herbalife employees and customers. The foundation uses those funds to support over 130 Casa Herbalife nutrition programs in 50 countries that serve over 100,000 children. Those programs focus on fighting obesity, malnutrition and undernutrition.
With nearly $7.9 million in assets, the Foundation works with people who sell Herbalife , known as “members,” to identify prospective nonprofit partners throughout the world, and then invites those nonprofits to apply for support. It does not accept unsolicited requests for grants.
The Foundation, which raised $4.58 million in 2014 and made grants totaling $2.69 million, generates 80 percent of its funds from events, including five social events that each attracts from a few hundred to 1,200 guests, mainly top-producing Herbalife members, as well as three fitness events that each attracts 3,000 to 4,000 participants.
“Our Foundation markets to a targeted group,” said Robyn Browning, executive director of the Herbalife Family Foundation, which was created in 1994 by the late Mark Hughes, founder of Herbalife.
Key to the Foundation’s fundraising is providing the kind of recognition that is important to its top donors in Herbalife’s motivated corporate culture, Browning said. “Recognition is important. It’s a matter of knowing the audience, and this audience appreciates recognition.”
Council on Foundations: Building community
Public and private foundations increasingly are working to serve as “connecting” institutions for communities defined by geography or a cause, and partnering with donors to identify their communities’ needs, and develop and fund efforts to address them, said Siobhan O’Riordan, senior vice president of engagement at the Council on Foundations.
Community foundations, for example, are “partnering with community leaders to listen, listen hard, identify what those key needs are, and then they’re partnering with their donors to meet the needs,” she said. As a result of partnerships with foundations, donors are diversifying the strategies they use to make gifts, she said.
“Perception is moving away from donor-directed funds,” she said. “Instead of donors using community foundations as a service to allocate their funds, they’re understanding that the community foundation has a vital role in meeting the core needs are, so that donors are starting to give more to ‘funds of interest.'”
Community foundations also are using “impact investing” that aims to address social and environmental problems by making alternative investments such as loans to nonprofits or allocations to socially responsible investments.
Laura Kalwinski, director of national standards and counsel at the Council on Foundations said that because they listen and can articulate community needs, community foundations can connect donors to “what is actually happening” in the community. “Any time they can have a better conversation with that donor, the likelihood of making a connection that leads to trust — and ultimately a gift — is greater.”