by Mimi Graney in Announcements
Posted on October 2, 2008 at 4:52 pm
loading…
Over the years and from various corners there’s been discussion about the need for a community foundation for Somerville. Some people have gone so far as to do research towards the idea of a foundation but nothing concrete has yet emerged. Since the needs that inspire the idea of Community Foundation continue to emerge a group of people gathered this past summer to articulate those needs and what a Somerville Foundation might be.
First time I heard the idea of a Somerville community foundation floated was back in the mid 90s when the Hyams Foundation withdrew their support from Somerville and cited the Chelsea Human Services Collaborative as the key reason why they continued to fund non-profits in that city but not in Somerville. More recently an education foundation was part of Mark Niedergang’s School Committee campaign. In the wake of the fire at the East Somerville School, I saw the business community come out with significant fundraising and saw that there wasn’t an established mechanicism for meeting this immediate city need. In Boston, there’s a Main Street Foundation that gathers corporate support for neighborhood economic development — Carrie of East Somerville Main Streets and I have fantasized about something similar for Somerville. The past several months folks in the human services area have been talking about establishing an endowment that could provide grants to local groups. There’s also talk among art groups discussing the need for a group to provide non-profit fiscal sponsorship and administrative organization for small community arts initiatives.
The idea is to develop a Somerville community foundation that generates and distributes financial and community resources to support the community programs of Somerville. The intent of the Foundation is to serve a broad spectrum of community needs for current and future generations.
The goal is to build the long-term fundraising capacity of our city’s community and social service organizations. Through our working together we wish to encourage effective local giving, particularly by those new to our city, to access new sources of support such as bequests and planned giving to meet needs city-wide, and to increase the impact of community fundraising through a permanent endowment.
The group developed a document detailing what the Somerville Community Foundation might be and why it is needed. We’re interested in hearing your feedback.
loading…
With all due respect, I continue to believe that Somerville does not need another organization. We need activists to work together to get things done. Somerville Childrens Network is an existing 501c3 created by Laura Song and others, dedicated to the mission that Mimi and Mark are focused. In addition to creating the Somerville-4-Schools YahooGroup and the BBQcoop, SCN has raised funds and created pre-school in door play times and is funding after school programs at the Healey. If people want to raise funds for general or specific targeted purposes, there is no need to waste legal time on creating a new organization.
Fewer meeting. More concrete actions.
loading...
From Joe Beckman:(orig posted to Somerville-4-Schools
I can’t express more strongly my opposition to the kind of community foundation Mimi suggests. A broadbased foundation, with interests in health, education, human services, community improvement, mainstreats, housing and the environment guarantees too little to too many to have any impact whatsoever. Third Sector New England has far more resources and accomplishes a small fraction of the ten goals of Mimi’s outline. The Cambridge Community Foundation has serious endowment money and focuses on less than one third of that spectrum. And the Boston Public Schools foundation has a serious income stream from health insurance reimbursement of special education services to a large number of Boston children and has a much narrower scope for much higher impact, with, again, a far less ambitious goal.
Realism does not mean hiding the goal or ignoring the needs, but, rather, a very careful and very husbanded set of strategic and focused objectives, investing in high yield decisions rather than broad and fuzzy conceptual priorities. I don’t think Somerville is up to that, at least not yet, since we want to do too much with too little for too many, all at once.
Let me give you some examples. There has been, in Boston, substantive discussion about focused Individual Development Accounts (IDA accounts, wherein low and moderate income people can make careful investment decision in postsecondary, housing, or new microbusiness planning and achieve matching funds of three to five to one, using Community Reinvestment from local banks as well as philanthropy). These discussions addressed the feasibility of “college for every high school graduate,” “first time homeownership for every newcomer able to save,” and start up entrepreneurship for anyone capable of saving $5000 and developing a feasible business plan. These schemes have engaged philanthropies as well as individual donors in serious feasibility reviews and, were it not for the last few fiscal bubbles, might have taken off any time in the past few years. The current bubble makes IDA’s and 529 accounts (college saving IDA’s) very difficult, if not impossible in the next six to twelve months, but perhaps feasible once the housing bubble is over, next July or so. For an analysis of the national and tax-based strategies implied in these strategies see the New America Foundation’s analysis, here http://www.newamerica.net/programs/asset_building.
IDA matching offers far more “bang for the buck” than the kinds of small grants implied in Mimi’s plan, as well as many more grantees and much more program multipliers – from housing to college to startups, from townies to immigrants to emerging yuppies. Even that agenda, however, requires some focus on one of those three areas before achieving that kind of multiple. With less focus, grants of less than $1000 would enable dependence rather than empower independence.
For another range of examples, there have been intensive discussions in some circles in Cambridge about real estate investment trusts, in which reverse mortgages guarantee lifetime residence for aging philanthropists while residual trusts – often to or through Harvard or other endowed institutions – can guarantee a permanent endowment to meet a specific philanthropic mission. To make that illustration concrete, somebody like me, with no visible heirs, could take a reverse mortgage and deed the residual value of my house to such a trust. I could then live in the house expense free for the rest of my life, even drawing a modest income from its appreciation value for twenty to thirty years, and there would still be residual value for the community investment to subsidize IDA matches to student 529 savings accounts or to guarantee low income mortgages or to secure small start up loans for new ventures. The tax advantages to me and my estate would assure these subsidies even if the real estate market tanked or declined (which is far less probable in Somerville with new transit and other inflationary pressures). Some aspects of these plans are well represented in the ASPIRE program, also developed by the New America Foundation (http://www.newamerica.net/programs/asset_building/aspire_act_kids_accounts).
Yet these are much, much, much more concrete and targeted than Mimi’s aspirational outline. They could – any of them – be transformative to this – or other – communities, guaranteeing college, housing, or small business innovation forever. And they could build community while ensuring long term future impact many times that of a less focused option. But they – each – take a lot more clarity in purpose and singularity in strategic choices than the more global spectrum of a community foundation.
Finally, these options are only feasible when or if our dominant community neighbor – in this case Tufts, with it’s increase this year alone of $300,000,000 in endowment – were to become a true partner in creating the kind of community we all want to create. Ignoring that Tufts elephant in the room guarantees the futility of any of these schemes, since the rich will remain so distant from the poor that any interim compromise is like a bandaid for an amputated limb. While there are discussions in the legislature and in congress that would require a Tufts community contribution, until they produce some serious voluntary or involuntary commitment to real civic dialog and community philanthropy, the prospect of a bunch of us transforming community interests into collaborative community transformation will always be embarrassingly short of achieving anything like what we want. Do not forget that Tufts now pays our city one percent of what Harvard pays it’s host communities, and Harvard is a remarkably low standard that makes Tufts look much, much less sensitive than US Steel in Gary, Indiana. Senator Grassley, Republican of Iowa, has generated real support for an initiative to tax any university who does not re-invest at least 5% of its assets in mission-related investments every year – who fails to meet the nonprofit standard of general philanthropies, in other words. (Google Grassley, or look at http://chronicle.com/news/article/5104/senator-grassley-wants-new-990-tax-form-tailored-to-colleges for examples.) Tufts is currently at about 3%, and, with this new money, will probably drop to 2% for 2008. We would have to share that surplus with Medford and Boston, but it’s a pretty good chunk of change, given Tufts’ past history at least.
loading...
From Melissa McWhinney:(orig posted to Somerville-4-Schools)
Dear Joe: As much as I love you and admire your brilliance, I think we’re going to continue to disagree on this. I have to run off to an event, but here are a few brief points:
1) There are already school-based foundations, but the proposed Somerville Community Foundation (SCF) would not be limited to funding K-12 educational programs — it could also fund arts, homelessness/housing, community organizing, workforce development, ESL classes, community kitchens; in other words, a broad array of services of various kinds to lots of different kinds of people.
2) Yes, IDAs are great. CAAS has been looking into starting a program. The trouble is that a program needs a match, (aside from federal and/or state matches), and where might one get that match? Perhaps from the Community Foundation, if it exists. (By the way, the Somerville Community Corporation is about to start an IDA program for three people.) The other things about IDAs is that in Massachusetts, the use of the funds is limited to business start-up, higher education, or homeownership. I think in Somerville, homeownership is likely to be out of the question for the population an IDA is intended to serve, which leaves business and college.
3) I don’t know anything about real estate investment trusts, but again, it would be convenient to have a community foundation to hold and manage the trust.
4) Of course Tufts is the elephant in the room. Funny! But you don’t know that Sarah Cleggish (?) from Tufts Community Relations was at the first meeting and expressed interest in continuing the conversation. Wouldn’t it be nice to have a place for a substantial donation, which Tufts isn’t likely to make to any single community organization? Yes, they give $100,000/year to the city. But if they want to give more, there’s no place to put it that would not pit one agency/foundation against another.
5) I don’t do fundraising or development, but my general understanding is that indeed, many donors are far more willing to give to a community foundation that’s already vetted projects or agencies, than to a particular agency. Obviously, if we determine that a community foundation would suck away money that’s already being given to single agencies in Somerville, that would be a serious reason not to go forward. But I think there is a lot of new money floating around Somerville that is going to Boston. If you look at the Globe society pages, Somerville people pop up who we don’t know (and I bet no one in the Somerville non-profit, political or education networks knows,) who have attended some fancy fundraiser on a boat or whatever. I remember one where it was reported that 200 people had attended, and it raised $200,000. Serious money. Going to a Boston charity. I’m sure The Boston Foundation wouldn’t tell us, ! but I ‘d love to find out what kind of donations they get from Somerville residents.
6) The point of the grant that Mimi wrote is not to carve the current iteration in stone. Rather, it’s a planning grant. So whatever has been thrown onto the table after one meeting may very well not be on the table after a planning process.
7) When I mentioned the idea of a community foundation to someone I admire and respect, and who is fighting to keep an agency afloat, the response was “But the need is so great right now.” Yes, it is. Wouldn’t it be grand if someone had started a Somerville Community Foundation 50 or 100 years ago, so we would have more money now to fund what’s important? It’s possible that what we’re talking about now would not be able to give substantial grants for many years. But at some point, the investment of time and dollars would begin to pay off.
I think the idea is worth exploring. Alas, I won’t be at Monday night’s meeting about a community foundation (6:00 pm, 10/6, at CAAS, 66-70 Union Square) because I’m helping the High School with their Early College Access program, also a laudable effort. But I trust the rest of you will carry on.
Melissa McWhinney
loading...
More from Joe Beckman again:
Melissa, Melissa,
First, you’re right about school-based foundations, but they exist
primarily to retain money earned by school systems from third party
insurers for services already funded by special ed – counseling,
diagnosis, treatment, and even prevention, all of which are funded and
many of which are billable to childrens’ public or private insurance
policies. The real cash value of that billing can be considerable, up
to $20mil/year in Boston. And that is why/how, for one example, the
Health Alliance built that clinic at the high school under Dorothy’s
administration – to suck up the money that would otherwise go to the
school foundation or…as it did before…to the city general
treasury.
Second, the purposes you’re talking about are just lovely, but (a) the
cost of deciding who gets what and (b) the then relatively small
amounts available to each of those “what’s”, is really high, both
socially and financially. Many community foundations have operating
costs at the 30% to 50% range, particularly if they consider the
in-kind time of volunteers that might be spent in direct service.
Third, the match of IDA’s is precisely the ONLY way I can see to make
the relatively small funds available to spend from a community
foundation’s fund raising go anywhere. Keep in mind the first priority
of a new foundation is to build capital – which means to NOT spend the
funds it raises and to build some kind of endowment. With that
priority in mind, matching other money is the only way to have any
serious impact – and to attract additional capital. Somerville is an
immigrant city and a child-centered city, which makes entrepreneurship
and college 529 accounts most attractive. Combined with the bankruptcy
of many of the college loan funds, it makes higher ed – like that
meeting you are going to on Monday night – a natural priority.
Ultimately it should attract some of that loose Tufts money,
incidentally, since they could avoid the Grassley tax by contributing
to a tuition matching fund regardless of where the kids who use that
fund decide to go. In any case, a $10,000 annual “event” could lever
$50,000 in tuition if it were matched by other funds and by a family’s
own savings from Earned Income Tax Credits.
Fourth, according to the city Treasurer, Tufts paid $75,000 last year,
precisely one percent of what Harvard paid their hosts. And those
payments were Payments in Lieu of Taxes (PiLoT) payments. I doubt very
much whether the city would count contributions to a college fund or
to a community foundation against that payment since it’s what covers
snow plows and fire calls, cops and streets, which already cost more
than Tufts’ payment.
Fifth, how can we help your college program most directly? Time? Where
and when? my priority is NOT to hustle money but to get those kids
money for their college experience – bigger payback for more people
longer time.
loading...
From Melissa McWhinney again:
I’ll just throw this out there, because it’s pretty much before my time — what do people think about the HomeFirst charitable foundation that was run by Barbara Capuano? I think it’s still in existence, or at least it popped up when I googled it — http://www.charity-charities.org/charityinfo.php?ID=827053&page=6 . HomeFirst ran two events — a June carnival for kids, and the Taste of Somerville at Holiday Inn. I only got to the last Taste of Somerville evening, when it was no longer in full swing, and the money was not going to HomeFirst — actually, I’m not sure where the money ended up from the last event, which was run by the Somerville Chamber of Commerce. And I never got to the June kid’s event on Tufts field because I was always at the Gay Pride parade, which happened the same day. So I don’t know how successful that was eithe! r.&nb sp; I also don’t know how much money it raised or how the money was used.
But that’s a model that seemed to work for a while, on a smaller scale. Does anyone know more about it? Is it worth considering reviving that rather than creating a community foundation?
For those who want to know more generally about community foundations, see http://www.cof.org/Locator/ , the Council on Community Foundations.
Melissa McWhinney
loading...
Not knowing much about the history here, it’s too early for me to weigh in on whether the foundation is a good idea or not, but I do know enough about the community foundation landscape to offer this bit of advice: If the decision is to move forward, PLEASE consider working with a larger, existing community foundation (e.g. The Boston Foundation) to serve as a host. Many community foundations offer this service (I do not know if TBF is one of them, but perhaps they can be convinced?), and they can set it up in such a way that to the general public it appears to be a separate foundation (e.g. checks made payable to Somerville), yet the operating costs are signficantly lower than doing it on your own.
To really make a community foundation work (from a purely financial point of view; the “impact” side requires a totally different conversation), you need a substantial corpus — which is why most new community foundations spend their first several decades — if not years — mostly RAISING money, not giving it out. Starting as part of an existing foundation makes this all much easier.
Interested to see where this all goes…
loading...
JEFF LEVINE adds:
I remember HomeFirst. When I worked for the city everyone would go to the events.
While I am intrigued by the idea of a Somerville Foundation I wonder if there is enough liquid capital in this city to bring one to an adequate size. Brookline’s foundation is large enough, but there is a lot more money there.
Jeff Levine
loading...
And MELISSA replies again:
Jeff: Good question. I really don’t know the answer! I imagine that’s something that the planning grant would help us look at. There is a lot more old money in Brookline, for sure. There’s a lot of new money in Somerville, or at least there was a week ago, although probably all bets are off at this point! Do you know how the planning group would go about figuring out how much money is floating around Somerville?
Thanks,
Melissa
loading...
ALEX PIRIE adds:
Jeff has a good point. Even in the best of times, the money issue looms large. HomeFirst was fun, but a lot of work and I don’t remember it building an endowment – I think pretty much what came in, went out in amounts that were appreciated by the recipients, but these were not substantial sums.
A few years ago we had a meeting at the VNA with a lot of community people (did you organize this, Melissa?) about the prospect of a community foundation and the director for Cambridge’s made a presentation. He led off with the statement that it probably didn’t make sense to get going without a large figure (was it three million?) in the bank. Of course, mouths fell open. However, the reality is that if you have an endowment, somebody has to invest it and manage it and this is not a freebie – banks can serve as trustee, but at a cost; a larger foundation like Boston Foundation is always happy to manage it for you, but again at a cost. Then there is staff. Then space for staff. Etcetera!
Cambridge brought along a copy of their annual report and, as far as I was concerned, the game was up – the first page, the ‘we REALLY thank you’ annual big donors at five thousand and up had enough people to come out at around a million. I used to teach at BB&N and recognized some of the names. These were families that could support two or three kids at BB&N all at the same time! Even in our wildest dreams of gentrification (nightmares to some), we will never get to that place. We have a handful of houses that have changed hands over the last few years in the million dollar range – Cambridge has whole streets that start at 2.5 million.
In fact, if someone had the time to do the research, it might be interesting to compare the domestic real estate base and/or per capita income of some of the nearby cities that have foundations of one sort or another (or not) and the size of their endowment (or if they have one). My guess is that there is probably a pretty simple graph that would show the cross over point at which it became possible to start something.
More recently, the idea has been floated to think about looking for people who might like to bequeath their homes to a foundation and slowly build up an endowment that way. This is possible, but the money still has to be managed and a model of management agreed upon.
Does the Affordable Housing Trust have a management system that might be copied? I think that the board is volunteer and the city staffs it, but I don’t know where the money resides and whether it is invested or not and who is responsible for it. Maybe somebody on this list knows? Given the contentious political history in the city, I don’t think city management would fly with donors in general. Letting the City of Somerville manage the money does not seem like a particularly viable idea – think about the community benefit part of the Community Development Block Grant money, for example. The temptations are great and it wouldn’t be long before some future mayor would be strongly suggesting that he or she have the power to appoint more and more of the board…
Alex Pirie
loading...
From MARK NIEDERGANG:
Linda and Melissa and others –
I am almost certain that Home First does not exist anymore. It certainly has not been operating since before Mike Capuano won his congressional seat.
Home First was really terrific, but it was a LOT of work, it took a lot of volunteer power. The main event was a huge outdoor carnival/fair on the Tufts playing field. Organizations that received proceeds from the carnival had to do a booth and staff it, and proceeds were somewhat proportional to the amount of business the booth did as I recall. The carnival raised a lot of money, but it was split among a lot of organizations, so nobody got a large amount. Barbara Capuano and the army of supporters and friends that Mike has did a lot of the organizing.
My sense was that the Capuanos and other leaders in the effort simply burned out. It was a huge amount of work. It was a wonderful effort and a lot of kids and adults had a lot of fun at the carnivals, but I don’t think it was an efficient way to raise serious money. Home First contributed a lot to the City in terms of this event and starting A Taste of Somerville. The Capuanos deserve a lot of credit for doing it for many years — I don’t know how many, but I would guess 5 or 6 years.
Personally, I believe there is enough money in Somerville now to justify a community foundation (well, there was enough until the stock market crashed!). The challenge is accessing it. A lot of the money in Somerville I believe is new money in the City, wealthy folks who have moved in in the last 5-10 years and may not be very connected to the schools or any organizations in the City. I think they’re out there but we would need to figure out how to identify and reach them.
Mark Niedergang
loading...