Friction-free foundations

Among Sarasota’s embarrassment of blessings are the two largest community foundations in the state.

The Gulf Coast Community Foundation, based in Venice, and the Sarasota-based Community Foundation of Sarasota County total almost $400 million in combined assets, roughly split evenly.

You see their representatives at nearly every event, socializing, networking, looking for donor opportunities and gifting opportunities. Their paths cross often, and, in a sense, they are competing for many of the same donor dollars. But there is almost no friction between the two giant foundations.

In fact, there is nearly a brotherhood — or sisterhood, in this case.

“We get together once a month just for fun,” Teri Hansen, president and CEO of the Gulf Coast Community Foundation, says of her counterpart at the Community Foundation of Sarasota County, Roxie Jerde. “I enjoy having a colleague here like Roxie.”

Jerde, who is about a year into the job, agrees. “Teri and I have spent time getting to know each other. We’re off to a great start.”

But it was not always so.

Until recently, there was an undercurrent of tension between the two organizations that had its roots in the arrival of Hansen to run GCCF in September 2002.

Stewart Stearns, then president of CFSC, did not get along with Hansen. But the cause of the conflict is muddled between the two.

“I don’t think Stewart Stearns was my biggest fan,” Hansen said. “He told me when I first got here, the day my board hired me was the day they declared war against him.”

Stearns has a different recollection. He said he called Hansen in Cleveland to congratulate her when she was hired and already knew her from the Council of Foundations. They met for breakfast when she arrived, and he offered to take her around to meet people.

“I figured at the time that it was a real coup for me to be working with someone I already knew rather than someone I did not know at all,” he wrote in response to a set of email questions.

Hansen said it was at that very breakfast at First Watch that he made the “declaration of war” statement and the tone was set.

But Stearns says they were merely focused on different goals, that Hansen was more focused on fundraising, and he was more focused on programs. “So, we did not agree on a lot of issues. So … ? There’s no harm or sin in that,” he wrote.

But the clear fact that the two were not getting along was bound to be reflected in how the foundations acted and in how the top players in each got along.

When Stearns retired in May 2010, there was the sense that something needed to change and his departure provided the opportunity. CFSC began a “listening campaign” that summer, gathering input from donors and the community about the foundation, its operations, its value, its future. With some facilitating help from the Patterson Foundation, one thing they listened for was whether the community wanted two foundations.

The answer was yes.

“There’s room for both of us in this community. We both have very different heritages,” Jerde said of the results that were done before her hiring.

But there was more. People in the area were aware of the conflict.

“The community clearly said we’d like to see the two foundations work more closely together,” Jerde said. She began work at CFSC in March 2011, and there were other changes made among top CFSC executives.

That cross-foundation cooperation became part of Jerde’s charge.

New cooperation
A concrete result of that was the Community Foundation Coalition, in which Hansen and Jerde and their respective board chairmen meet regularly to work together where it makes sense, keeping an open line of communication.

The arrangement is close enough now that they will actually refer donors to the other one.

For instance, not long ago Hansen and her team met with a prospective donor.

“Her passion was literacy,” Hansen said. “We said, ‘You need to talk to the Sarasota foundation. They have this literacy initiative that might be something you would be interested in.’”

While both groups have major education initiatives, CFSC has a program focusing specifically on literacy. GCCF is zeroing in on STEM — science, technology, engineering and math.

“If it would have been STEM” the donor was interested in, Hansen said, “we would have told her what we’re doing.”

The two try to complement each other in that way, rather than compete. “If they’re in a space, great,” Hansen said.

Another example is the Giving Partner program, a concept that Jerde brought with her from Kansas City.

This is a free online database that gathers all the necessary information about charitable organizations in Southwest Florida, allowing donors and residents to make more informed decisions. All the organizations are vetted, and the database includes IRS form 990 financial statements, strategies, communications, histories and so on. There are about 100 charitable organizations so far, but they are hoping to get the database to about 450 in three years. The community’s first 36-Hour Giving Partner Challenge took place March 27 and 28 and raised approximately $2.1 million for area nonprofits, doubling its goal of $1 million.
“There is an opportunity for both of us to work successfully in this community,” Jerde said of the tenor of the relationship.

Fundraising history
The two foundations have markedly different histories, which leads to varying strategies for gaining donations.

The Gulf Coast Community Foundation — formerly the Gulf Coast Community Foundation of Venice — was born of the sale of Venice Hospital in 1995 to Bon Secours Health System Inc. That sale netted $85 million and became the center endowment for the foundation. Since then, GCCF has given out more than $131 million in grants in the areas of education, health and human services, the environment and civic and economic development.

But GCCF has also been fundraising through the years — something it must do to retain its IRS standing as a community foundation — and now has assets of about $207 million.

The Community Foundation of Sarasota County had entirely different beginnings.

More than 30 years ago, the Southwest Florida Estate Planning Council created the foundation after realizing that its philanthropic customers had millions of dollars they wanted to donate in their wills but had no good way of handling that. The council was not equipped to run such philanthropy, so it created the foundation as a place to funnel those donations.

It was an all-volunteer organization at first, but its initially modest assets have now grown to $194 million in 850 individual funds. CFSC has 19 full-time and two part-time employees.

But how the two have gone about continuing to get donations remains different.

While GCCF does get some donations through wills, CFSC remains connected to the estate planning council and the Southwest Florida Planned Giving Council and is deeply plugged into the donations from those estates. Because CFSC has so many smaller, individual donors — and the funds are mostly donor-directed — it has those 850 individual funds.

GCCF often gets donations from people who want to be part of specific programs or broad areas the foundation is already funding. The organization has more than 500 donor funds. Plus, GCCF pursues a strategy of leveraging what it has to get far more bang.

For instance, after Denise Amber Lee was kidnapped and murdered in January 2008 in North Port, a serious fault was found in the 911 system. Her widower, Nathan Lee, went to GCCF to set up a foundation in her name. The organization used $45,000 to commission research on the 911 system failures in Florida.

“We were able to give him tools that he could use in his stump speech besides his horrible story,” Hansen said.

GCCF did a flow chart of how 911 works and found that most mistakes happened in the handoff between the person who answers the phone and the person who dispatches the help. Money was used for training phone answerers but not much for dispatchers.

They gave the results to state Sen. Nancy Detert, R-Venice, who got legislation passed in the first attempt in 2009 to change 911 training statewide. Now other states are modeling their systems after Florida’s, all based on a $45,000 study.

That is leveraging.

Losses and gains
Both foundations were hammered during the recession. GCCF lost $87 million in assets between 2007 and 2010. The foundation had negative revenues of $12.8 million in 2008 and $43.9 million in 2009.

CFSC lost $29 million in assets from 2007 to 2009 and had negative revenues of $14.2 million in 2009.
Foundations post negative revenues — not net revenues — when their market investments decline sharply in value at the same time that donations drop off. This is part of the dynamic that afflicted both foundations.

But when that dynamic is flipped, as it is now, the balance sheet flips, and both foundations are now recovering with the strong rebounding financial markets.

GCCF posted $50.2 million in revenues in 2011 while CFSC posted $42 million last year.

But, interestingly, donations continued strong in the recession.

“In the last several years, our donors have skyrocketed,” said Mark Pritchett, senior vice president for Community Investment at GCCF. “Assets went down because of the recessions, but our gifts (grants) continued to go up even more.”

CFSC saw a similar phenomenon. Donations stayed steady through the recession, and 2010 was a huge year, with the help of large bequest of $15 million, according to Mark Rehder, vice president of finance and operations.

Part of GCCF’s success was the aggressive strategy of bringing onboard rainmakers Scott Anderson as senior philanthropic adviser and Veronica Brady as senior vice president for philanthropy.

Because of the size of the foundations, it is clear that investment success plays a huge role in annual revenues. But new donors are the lifeblood for both — including GCCF, which now gives out more in donations from its funds that are not part of the Venice Hospital sale endowment than from that original endowment.

So, as improved as the cross-foundation cooperation is, there remains an undeniable truth: They are competing for some of the same donors. They’re just doing it more cooperatively now.

“Donors have a choice,” Jerde said. “But I hope we always have the attitude that philanthropy is great for this community.”