Community Foundations Build, Protect Their Communities

This post was originally produced for Forbes.

One of the backbones of American philanthropy is the community foundation, which plays a variety of critical roles in building and protecting a community. These community foundations operate in every state in the nation. Personally, I’ve been receiving an education since I joined the Board of the Community Foundation of Utah as a volunteer.

Community foundations may become significant players in the impact investing space in the coming decade. Many gifts to such foundations are in the form of donor advised funds, commonly abbreviated as DAFs. A donor advised fund operates a bit like a family foundation, allowing the grantor to “advise” the sponsor holding the assets about what to do with the money, all of which must ultimately be donated to charity.

Commonly, when an investor has a taxable windfall, with careful planning from advisors, assets can be donated to a DAF, allowing the investor to take a tax deduction and avoid tax on the gain on sale, while effectively continuing to influence the ultimate grant-making over a span of subsequent years.

Those DAF accounts have traditionally been invested in a variety of financial assets. More and more people in the DAF community are looking at these accounts as a source of impact investment capital to be deployed for social impact as investments while waiting to be donated.

One threat to this trend is a proposal from Michigan Congressman Dave Camp, who has proposed a requirement that DAFs distribute 20 percent of assets each year, effectively imposing a rapid liquidation schedule and preventing any meaningful impact investment. When compared to a foundation’s requirement that 5 percent of assets be distributed each year, the Camp proposal looks rather draconian to some in the community foundation world. DAFs have no distribution requirement today, though the Community Foundation of Utah has reported that about 13 percent of DAF assets are distributed to charities each year, well above the 5 percent level required of foundations.

On September 3, 2014 at 1:00 Eastern, the CEOs of three foundations, including Lorie Slutsky, CEO of the relatively massive New York Community NYCB -0.75% Trust. She will be joined by the CEOs of the Lincoln Community Foundation, Barbara M. Bartle and Fraser Nelson, head of the Community Foundation of Utah. Bartle will by joined by Paula Metcalf, Vice President for Gift Planning and General Counsel.

More about The New York Community Trust:

Since 1924, The New York Community Trust, the City’s community foundation, has helped make donors’ charitable dreams come true by funding the nonprofits that make our city a vital and secure place. We help donors find flexible, efficient, and rewarding ways to accomplish their charitable giving, and we work with lawyers and financial advisors to help their clients incorporate charity into financial and estate plans.

We also work with nonprofits, other funders, and government to craft solutions to problems. We make grants in the five boroughs, to organizations large and small, to those we’ve worked with over the years and those who are new to us. We are committed to sticking with significant issues that don’t lend themselves to quick or easy solutions, and look for projects that take fresh approaches to long-standing issues and that tackle emerging problems and opportunities.

More about the Lincoln Community Foundation:

The mission of the Lincoln Community Foundation is to provide leadership and resources to help build a great city. Community foundations are well positioned to develop local solutions because they can engage the public, private and philanthropic sectors. We serve as faithful stewards for the many types of philanthropic gifts and help donors create a lasting legacy of giving. We serve as community leaders to identify needs and opportunities. We convene diverse voices from government, business, nonprofit organizations and citizens to craft responses and solutions. We encourage and support the many nonprofit organizations in our community that contribute so much to our quality of life.

More out the Community Foundation of Utah:

The Community Foundation of Utah is a catalyst for philanthropy that is innovative, inclusive and sustainable. We gather assets and ideas to serve the people places and causes of Utah for good, and for ever.

Lorie A. Slutsky, The New York Community Trust

Slutsky’s bio:

Lorie has been the president of The Trust since 1990. She began her career at The Trust in 1977 as a grantmaker with responsibility for education, housing, government and urban affairs, and neighborhood revitalization. She was named executive vice president in 1987, when she assumed responsibility for strategic planning, personnel and budget management, and oversight of all departments.

Lorie received her B.A. from Colgate University, where she served for nine years as a trustee and chairman of the budget committee, and her M.A. from The New School, where she also was as a trustee. She sits on the Chief Judge’s Task Force To Expand Access to Civil Legal Services in New York State and chairs its RFP Work Group. She is also on the board of Independent Sector. She also is a director of two for-profit companies: Alliance Bernstein Capital Management and AXA Financial.

Lorie is a former board chairman of the Council on Foundations and BoardSource, and former vice chairman of The Foundation Center.

Bartle’s bio:

Barbara serves as the chief executive officer of the Foundation. She has 40 years of experience in fundraising, program development, public engagement and teaching. Barbara most recently served as the President of the Foundation for Lincoln Public Schools for 18 years. She is a member of the Nebraska Partnership for Philanthropic Planning and served on the board for the Association of Fundraising Professionals. Barbara is past president of Rotary Club 14 and the Nebraska Repertory Theater and has served on numerous nonprofit boards in Lincoln. She is past president of the National School Foundation Association.

Paula Metcalf, Lincoln Community Foundation

Metfalf’s bio:

Paula Metcalf was appointed Vice President for Gift Planning and General Counsel in July 2010. Prior to joining the Lincoln Community Foundation, Paula had a solo law practice in Lincoln focusing on business and estate planning, probate and business transactions. Before her solo practice, she practiced at Knudsen, Berkheimer, Richardson and Endacott in Lincoln for 24 years. Paula is a member of Lincoln Estate Planning Counsel and has served on the Lincoln Bar Association Board of Trustees. She has served as a speaker for multiple continuing legal education seminars. Paula is a 1979 graduate of the University of Nebraska Law College.

Fraser Nelson, Community Foundation of Utah

Nelson’s bio:

Fraser has held positions of leadership in nonprofit organizations large and small across the United States. In Utah, she led the Disability Law Center for 10 years, helping to create ‘And Justice for All” and the Community Legal Center. In 2008, she founded the Community Foundation of Utah, building it from an idea to a $39 million catalyst for the common good. Fraser is a mentor, teacher, trainer, advocate and leader. She has been widely recognized for her contributions, including the Utah State Bar’s Community Member of the Year, one of Utah Business magazine’s ‘30 Women to Watch’, and, closest to her heart, the Pete Suazo Social Justice Award.

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