Mississippians have consistently ranked as some of the most generous in the country when it comes to charitable donations. And while “pass-through” contributions made each year are important, community foundations that manage endowed funds provide a way to build equity to fund non-profit work in perpetuity.
There are an estimated 650 community foundations in the U.S. holding $30 billion in assets, acting as “savings accounts” for the areas they serve.
The Community Foundation of Greater Jackson (CFGJ) manages more than 90 funds consisting of $10 million in endowed assets.
“What we do is create a permanent tool of funds that will be available to make grants to non-profits forever,” said Linda Montgomery, president of the CFGJ. “So, while we are happy to have pass-through funds that help non-profits immediately, our real goal is to build permanent funds. Pass-through funds are gone in a year, while the endowment funds will be here forever. Because we grant out only a portion of the balance each year, rather than all the earnings, the endowment will continue to grow as the years go by.”
The CFGJ distributed $3.6 million in grants last year with cumulative grants of more than $9 million to date.
Non-profits need revenue each year whether the economy is good or bad. In fact, needs may be greater when the economy is going through a downturn.
“That is why foundations don’t grant all their earnings in one year,” Montgomery said. “In the bad years, you wouldn’t have anything to give out. And since non-profits count on gifts from foundations, you need to have a steady source of grant income.”
Mississippi businesses have been very generous donating to the foundation. Montgomery said business leaders have a vested interest in contributing to a good quality of life in their community.
“If we can get people to give back to make it a good community, when businesses go to recruit employees, they will want to live in the community,” Montgomery said.
“I think that businesses support the growth of the community foundation for that reason.
“The main thing we’re doing is getting people to think about giving back to the community. This is where a lot of people grew up, where they have worked their entire lives, and where their children live. They want to give back so our area will continue to be a great place to live.”
In the early 1990s, Jackson was the largest city in the Southeast without a community foundation. A 15-member task force of the Leadership Jackson Alumni Association led the efforts to establish the foundation, which was incorporated in March 1994. The foundation covers the counties of Hinds, Rankin and Madison.
Montgomery said when the foundation is considering what charities to fund, it wants to see a non-profit that is run like a successful business.
“We want to see well-run non-profits,” Montgomery said. “We want nonprofits that do what they say they are going to do. We don’t want them to waste money. They must be accountable for how they spend the money.”
Another foundation in the state is the Gulf Coast Community Foundation (GCCF), which currently manages $17 million in assets.
“When you have $17 million to invest, you get a better return for your money,” said Dickie Roberts, executive director, GCCF. “Managing endowments is all we do. We don’t do programs. We are constantly looking at the returns. When you are running non-profit, you don’t have time to do deal with issues such as running your own endowment program. And it costs you money. If you have an endowment, it has to be managed by somebody and you have to pay for that. Here we have one fee that is cheaper because people are banding together.”
Roberts said businesses have been particularly generous in donating to the foundation. “Businesses like the assurance that their money will be handled properly,” Roberts said. “And they like knowing that if their business gives money, it will be here forever.”
One role foundations play is providing a place where tax deductible contributions can be made for a charity that doesn’t yet have 501(c)(3) tax exempt status from the IRS.
“We lend our 501(c)(3) status to groups that meet our mission,” Roberts said. “We sit down and look at what they want to do. If we feel they are going to benefit the community, they can come in and use us as an umbrella. A good example is the Ocean Springs Education Foundation, which gives grants to teachers. They don’t have 501(c)(3) status, but by working under our umbrella it allows people who want to contribute the ability to get tax deductions.”
Another example is Senior Games, which doesn’t yet have non-profit status. When a bank and casino wanted to provide funding for the program, they were able to get a tax deduction because the organization worked under the GCCF.
Some of the organizations that have endowments through GCCF include the Walter Anderson Museum, YMCA, Gulf Coast Symphony, United Way of South Mississippi, Biloxi First, the Leo Seal Foundation and the Jackson County Civic Action Committee.
When considering whether to allow a new non-profit to come in under the umbrella of the foundation, or receive grants from the foundation, Roberts said they look carefully at the issue of duplication of services.
“Most non-profits start with someone who has a vision, and believes there is a need that is not being addressed in the community,” Roberts said. “One thing they should do before starting a new non-profit is research what is out there. There is a need to avoid duplication of services. Their efforts may be better utilized by helping another organization.”
Another issue is regarding staff. It makes foundation money go farther when small non-profits operate without staff.
“There are some small non-profits here on the Coast that have done very well,” Roberts said. “We fund a lot of organizations like that here with small operating grants. They don’t need a large amount of money because they don’t have staff. When you need staff, it takes a lot more money to operate.”
The foundation can help with more than just giving a grant to a non-profit. For example, Visions of Hope is a Coast organization that helps low-income people get housing. It recently received a grant from the John S. and James L. Knight Foundation, but needed help managing the money. So the grant came through the GCCF, which acts as the fiscal agent for the organization to pay the bills and handle finances.
“We can be the fiscal agent for any 501(c)(3) organization that needs our help,” Roberts said. “We can also help in other ways. Last year we incubated a new organization in town called the Wellness Foundation. They needed help with how to organize their board and that sort of thing. That kind of help is really valuable.”
Roberts is understandably proud of the growth of the GCCF, which began in 1989. Five years ago, GCCF managed $3.8 million in endowments. That figure has now grown to $17 million invested “for good, for ever.” GCCF has given more than $12 million in grants.
“Last year, we gave almost $850,000 in grants,” Roberts said. “This year, we are hoping we can give $1 million in grants. This is a great place to work because the people we deal with who make contributions and set up funds really care and want to do something good for their area. It is almost like Christmas every day. We just started a new fund today, and it was great to sit here and see how enthusiastic they were. They were so happy.”
For more information on the foundations, see the Web sites www.cfgreaterjackson.com and www.gulfcoastfoundation.org.
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.
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