Grand Rapids Community Foundation

For good. For ever.

President's Point of View: Ten years ago when community foundations wanted to mirror the financial services industry . . .

September 18, 2008

I’ve been thinking about how to comment on the current financial crisis with the advent of the bailouts of Freddie Mac, Fannie Mae and AIG as well as the Lehman Brothers’ downfall. Every time there is a corporation in crisis or one that implodes like Enron did a few years ago, I have to sit back and think about the times I’ve heard someone say to me “you know nonprofits ought to be more business-like.” And I think to myself OR say out loud “OH REALLY?” Things that make you go hmmmmm!

Then it struck me … I remember the bad old days when community foundations were all in a tizzy over the fact that Fidelity Investments created a charitable gift fund in 1992 with other firms following suit in the ensuing years. As I have said countless times, Fidelity’s actions woke this field up to realize that we needed to stop being the slumbering giants of our communities thinking that good fortune will just end up magically in our endowments because we are so grand. We did need and still need to connect with people, develop relationships and demonstrate our impact in the community - time and time again!

During the time from 1993 to 1999 - the field fought hard and generally with one another. Should we take on the attributes of the giant investment firms that try to accommodate client needs by having their fund statements online 24/7 updated daily to show how their accounts are faring? Should we become more transactional? Ultimately should we focus on high net worth people only who want a charitable financial services arm to help them with their philanthropy? And my question was: How the heck would we differentiate ourselves from Fidelity, Schwab, Vanguard?

Well back 10 years ago I was chairing the Committee on Community Foundations at the Council on Foundations - the forerunner committee to the currently known as “Leadership Team”. Oh the meetings were dynamic and full of debate and dissension. I would then meet with the larger community foundations at their annual meetings in Phoenix and learn from them that they thought that the Council was irrelevant and that we needed to figure out a way to partner or indeed mirror the financial services industry if we wanted to be in the loop as community foundations. (An earlier blog entry from February 2008 noted this also.) And this from people who were just coming to terms that we should be actively fund raising! My response then was and still is today - come on, give it up!

WE are a community leadership organization that provides an array of services to donors in a personal way - a more transformational relationship than a transactional one. WE relate to our communities and their needs in a more transformational way than a transactional one. WE are returning to the very roots of what makes a great community foundation. Given the ups and now the downs of the financial services industry, I’d say sticking to who we are is the way to be and to continue to be strong philanthropic leaders. Glad we didn’t succumb to being merely a reflection of an industry that does not fit who we are and frankly one that is struggling with their own misfortunes.

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Comments

Right on Diana!

Posted by: Pam Siegenthaler | September 25, 2008 10:59 AM

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