Give using community foundations

Greg Wilkinson’s homecoming to Toronto — after 30 long years in Alberta and the U.S. — ignited a yearning to re-engage with the community he grew up in. So when this principal in the Earnscliffe Strategy Group (a government relations and strategic communications firm) moved back in 2010 with his wife Maggie, they turned to the city’s community foundation for ways to invest in the city’s growth.

A community foundation is an umbrella charity that supports other local charities in a defined area. It helps donors set up endowed funds that can be used for the towns and cities they live in. The foundation researches causes and takes care of the legal and tax paperwork for donors. Giving through the Toronto Community Foundation (TCF) was an obvious choice for the Wilkinsons, who wanted to serve youth, and are passionate about the arts. Maggie’s parents, Bruce and Mary Dunlop, were involved with this philanthropic model for almost 20 years, and her father was one of the founding board members of the Community Foundations of Canada.

Giving without groundwork

Donating to such a foundation allows your client to help a community for the long term. Here’s how it works. Money is invested by experienced and knowledgeable staff in a personal permanent endowment fund to generate income, in perpetuity, for charitable causes. The foundation handles the administrative aspect of directing funds, so your client doesn’t have to worry about investment, due diligence, regulatory compliance or grant administration.

“Part of the benefit is simply the reduction of the hassle factor,” says Wilkinson. “All back-office details are dealt with and the financial stewardship of our fund is managed by professionals.”

It’s best for clients to use professional support, especially when they’re busy. “Community investment is like any other investment,” says Wilkinson. “If you’re OK with a sub-standard outcome, go ahead and do it yourself.”

Donors can redirect donations from other charities they’re supporting to the foundation. They can also stipulate the sort of recognition they’d like — from high profile to anonymous. And there’s no dearth of foundations to choose from — the Canadian Community Foundations website (cfc-fcc.ca) lists 180 across the country.

Payback time

For many donors, supporting their own communities is like paying back a debt of gratitude. Hamilton is where Murray Hogarth’s business got its start. Today, he’s chairman of Pioneer, and president and CEO of Pioneer Energy, Canada’s third largest independent fuel retailer by volume. Hogarth says, “When getting started every business needs a community. But once the business is profitable, it’s time to give back.”

When Hogarth first started donating the process was somewhat disorganized, with multiple requests for funding all year long. The whole process of having to monitor the cheques paid out and the organizations they were paid out to was time-consuming.

But then he heard about the Hamilton Community Foundation (HCF) in the ’90s. He was so impressed with their work, he joined the board of directors and was named chair in 1998. Hogarth also funneled all his family’s major donations through a fund at HCF.

“It was much more efficient that way,” he says. “The foundation would issue one tax receipt and distribute the funds as directed.” Hogarth and his family have supported many causes over the years, with particular focus on the health, welfare and education of children. In particular, they’ve made it a point to support children’s hospitals in all the communities they do business in.

Comprehending communities

When the Wilkinsons returned to Toronto, they researched the needs of the city. “Some of the issues of today were not top-of-mind when we were last here. For example, the profile of the community has fundamentally changed in terms of diversity, and with respect to its infrastructure needs,” says Wilkinson. “We found a perfect partner in the TCF because of its knowledge of the community.”

Since community foundations have a local focus, they have a grassroots understanding of the challenges the area faces. “Before making any investment in the community we first assess its most pressing needs,” says Rahul K. Bhardwaj, president and CEO of TCF. The foundation then conducts research on those assessments and reports findings annually.

Many would-be philanthropists simply don’t have the time to organize and execute that kind of research. That’s another reason why working with community foundations can save time and effort. “Donors can have access to the foundation’s knowledge of the community’s needs and the most effective strategies to address them,” says Sheree Meredith, vice-president of philanthropic services with the Hamilton Community Foundation. A community foundation also has knowledge about other organizations already funding work in certain areas. That awareness ensures efforts aren’t duplicated.

Wilkinson agrees. “An existing program we learned about through TCF’s online tools is called SKETCH Working Arts and designed for street-involved and homeless youth.” The program reaches out to at-risk young people who are homeless or marginalized, and offers a safe space for expression and growth through drawing, sculpting, music or dance.

For instance, one young woman frequented the studio but wouldn’t talk. Program leaders found out she lived in a nearby alleyway and had gone through tough times as a kid. During her visits, she hovered over the craft tables and gradually began participating in some of the activities. Now, two years later, she’s found a place to live and has also taken on a leadership role in her community, winning several awards for her civic engagement.

Pooling resources

Often, major community projects have heftier price tags than any one donor can pay. Community foundations bridge the funding gap by combining donations from a number of sources who have a common goal. “We offer our donors opportunities to leverage their donations by pooling their giving with other like-minded individuals,” says Bhardwaj.

Community foundations also oversee a large pot of money called a community fund, and allocate those considerable resources to bridge funding gaps when necessary. “Collectively, we can leverage our individual resources into something more meaningful and magnify the impact on our communities,” Wilkinson adds.

Once community foundations become involved in a project, it triggers interest and ultimately investment by others. For instance, because the HCF is known for its due diligence, its involvement in a project offers credibility and gives others the confidence to join in.

Recently, the HCF supported a transitional housing project for women and children. It approached one donor with an interest in the issue and the donor agreed to provide partial funding. Thanks to a clearly defined plan, another donor offered a $100,000 investment. This amount was then leveraged to secure a commitment of $50,000 from the City of Hamilton. A consulting partner developed a proposal for federal funding, which resulted in a $1 million grant to the charity, allowing for renovations and major expansion of services.

Changing lives, locally

Many forms of charitable giving are abstract, with net results that are tough to measure. Local success stories such as those at the HCF and the TCF offer donors a chance to see positive change close to home in decidedly tangible ways. And as in business, one success can lead to another.

A few years ago, the TCF identified high youth unemployment as a serious concern. As a solution, they launched the Toronto Sport Leadership Program (TSLP) in partnership with the City of Toronto, YMCA, United Way and two school boards, among others. Donors funded an intensive coach training institute for youth aged 16 and up, who demonstrated leadership potential, proficiency in a selected sport, and could not otherwise afford the training. The program prepares young people to take on positions such as lifeguards and soccer coaches, as well as leadership roles in various sports.

It was a new approach, and it’s been successful — 75% of students completed all certifications in the program and are now nationally certified coaches with secure employment opportunities. About 95% completed at least one certification, which qualifies them for assistant coaching positions. Even though half participated in high-risk or harmful behaviours before starting the program, 80% reported an increased sense of confidence and self-worth after completion. What’s more, 65% secured employment afterwards.

There’s a positive trickle-down effect, as well. “It’s not just the benefits to these youths that are really exciting,” says Oliver Carroll, a teacher with the Toronto District School Board. “It’s the hundreds of other children they will affect as role models.”

For a philanthropist, that’s the best outcome to giving and a compelling reason to keep contributing. “Many of the donors who supported the pilot of TSLP in 2005 continue to give today,” says TCF CEO Bhardwaj.

For Hogarth, one of the projects he was proudest to support had an impact on not just the Hamilton area, but also communities across Canada. Our Millennium Project of 1999 was a massive awareness campaign and funding drive for community foundations across the country. The program invited Canadians to make lasting gifts to their community in support of projects in one of 10 areas: youth and children, arts and culture, environment, heritage, connections, recreation, learning, safety and crime prevention, care and support, and global citizenship.

“When the concept was being developed in early 1999, it stood on shaky ground for lack of funds,” says Hogarth. “Our family saw this as an opportunity to make a significant donation to keep this important project going.”

The Hogarths gave what the foundation calls an “incredibly generous, visionary and timeless gift,” which kept the project from falling off the rails. By the end of the campaign, 4.6 million Canadians had responded, contributing to their local community foundations and helping to kick start 6,500 initiatives. The project was groundbreaking and went on to win accolades for its effectiveness, including the Peter F. Drucker Award of Merit for Canadian Nonprofit Innovation in 2000 for unique mobilization of public engagement.

Melissa Campeau is a Toronto-based financial writer.