Local Philanthropies Seek Greater Community Impacts

phil-ellis-2009-4x5-colorGordon Brown and his wife, Susan, were passionate boaters and active for years with the Inland Seas Education Association in Suttons Bay.

When Brown died in 2012, he left a gift of more than $40,000 to the Grand Traverse Regional Community Foundation to invest with the goal of supporting the association in perpetuity.

The Gordon V. Brown Memorial Endowment provides $1,700 a year to Inland Seas to aid its work promoting stewardship of the Great Lakes through educational programs offered on its schooner and in classrooms.

“It’s a wonderful thing to be able to support people by fulfilling their wishes the best we can,” said Phil Ellis, the foundation’s executive director.

Community foundations not only allow people like Brown to financially support their interests after they pass away. Those who are living and who also share those interests can make donations to endowments managed by the foundation, which oversees more than 300 charitable funds.

“What we look at is the community impact,” Ellis said. “It’s less about what we want to support, but what the donors have directed us to support. That’s what’s really distinct about us.”

The Grand Traverse Regional Community Foundation has about $50 million in endowed assets. It plans to give away $2 million this year, or four percent of its assets as required by law.

The foundation also offers a variety of college scholarships for graduating high school seniors in Antrim, Benzie, Grand Traverse, Kalkaska and Leelanau counties.

Last year, the foundation awarded 200 scholarships, totaling $170,000, from its various endowed funds.
Founded in 1992, the foundation first focused on building endowments. Its major project at the time was raising $2 million locally to match a $2 million grant from the Kellogg Foundation, specifically to engage youth in learning about nonprofit organizations.

The grant money created the local foundation Youth Endowment, in which high school students from across the region learn about philanthropy and recommend grants from the endowment.

In subsequent years, the foundation worked on community “capacity building,” helping nonprofit organizations that benefited the community to grow, and assisting in capital fundraising campaigns for organizations such as the Traverse City Opera House, the Grand Traverse YMCA and Traverse City Community Sailing.

But about five years ago, Ellis said the foundation returned to the core of community foundation work – serving its donors’ wishes and creating more endowments. Many of those endowments provide long-term funds for health care, human services, and youth and senior services.

One of its largest donors was Central Lake native Cleo Purdy, who gave the foundation $15 million following her death in 2013 for programs to benefit children and families in her hometown.

The Cleo M. Purdy Endowment for Education and Families pays for early childhood education, parenting classes and other programs at little or no cost to residents. Purdy was a special education teacher who lived most of her life in California and actively invested in real estate there.

Ellis said donations can fund programs and causes indefinitely if invested properly. He cited as one example a $1 million donation from a couple that has funded grants for 20 years and still has the $1 million principal remaining.

“In all that we do we have a unique focus on permanent endowments for our region,” he said. “This ensures that the community impact that the donors ask of us can be achieved now and forever.”

Rotary Charities, founded in 1976 after oil was struck on property owned by the Traverse City Rotary club, also is undergoing some changes to enhance the community with its giving.

Instead of just giving grants, Rotary Charities is engaging in “impact investing,” in which it provides loans to create a community or social impact and provide a financial gain for Rotary Charities to reinvest in the area.

“This is the next step in our evolution to meet community needs,” said Marsha Smith, Rotary Charities’ executive director.

“Impact investing has been around for a long time, but it’s mostly larger foundations that have been doing it.”

One example of such investing is a $200,000, five percent interest loan Rotary Charities gave to the Great Lakes Children’s Museum in Elmwood Township to refinance two higher-interest-rate loans the museum had taken out. The museum is located in the Great Lakes Discovery Center building, which Rotary owns.

Another Rotary loan to Goodwill Industries of Northern Michigan helped it start a program to package locally-grown food for school cafeterias.

Earlier this year, Rotary Charities’ board approved spending $2 million of its $48 million endowment in impact investing activities. Among them will be a loan program in which the charity will give loans to community organizations of between $100,000 and $300,000.

Rotary Charities’ overall investing will be focused on helping organizations and networks learn and connect to find better solutions to problems. The charity also aims to boost social structures, and increase citizen participation and civil discussion in community decision-making.

The philanthropy will cut back from issuing grants twice a year to a single grant cycle in 2017 and will indefinitely suspend multiyear grants. Rotary Charities has issued more than 1,100 grants totaling more than $52 million since 1977.

“As far as our overall direction goes, it’s going to be a much more systems-based and holistic approach,” Smith said.