Geared to compete – Aggressive strategy

By Todd Cohen

CHARLOTTE, N.C. — Last summer, a donor moved $3.2 million from the Fidelity Charitable Gift Fund to the Foundation For The Carolinas.

For Michael Marsicano, the gift bore the fruit of the aggressive business strategy the $250 million-asset foundation has pursued since he became its president in September 1999.

Under Marsicano, former president and CEO of the Arts & Science Council, the foundation has restructured its donor fees, strengthened its technology and boosted its marketing through alliances with financial-services and law firms.

Now, Marsicano says, the foundation can match the services offered by commercial gift funds such as Fidelity’s – while still enjoying a home-court advantage that helps it connect donors to local charities and causes.

“The value-added that for-profit firms can’t offer is grantmaking and philanthropic counsel,” he says.

The foundation now lets donors choose how it should invest their funds, and charges a fee of 1 percent of fund assets – rather than making its own investment decisions and keeping earnings instead of fees.

The foundation was able to make the change, designed to compete with commercial gift funds, because special donors agreed to cover its $3 million cost over three years.

And last March, the foundation launched AdvisorXpress, a password-protected Web site that tracks donors’ contributions and grantmaking, and lets them make grants online.

The foundation also has formed marketing alliances with 21 law firms, 18 financial-services firms and 13 accounting firms that encourage clients to create charitable funds at the foundation.

The foundation trains the firms’ professional advisers and asks the financial-services firms to manage donors’ funds if requested by the donors and if the firms meet performance standards.

Through Sept. 30, the financial-services alliances alone generated $9 million in gifts — more than a third of all gifts of $25 million.

The foundation, housed in a new uptown headquarters it bought and renovated for $4.3 million, also is shifting the focus of its unrestricted funds, restructuring its board and gearing up to better connect donors with causes.

Based on a consultant’s recommendation, the foundation – which makes $25 million in grants directed by donors — aims to better align with donor interests and community needs another $5 million it awards through competitive applications.

After a six-month moratorium, the foundation in July will focus those competitive funds on the environment, race-relations and out-of-school activities for children.

It also will replace its 21-member board with a 15-member regional policy-making board to better represent the 13 counties it serves outside Mecklenburg County, and will create a new grantmaking advisory board for Mecklenburg similar to those serving the other counties.

And the foundation, which fields a staff of “donor service representatives” akin to personal bankers, will develop a systematic method for identifying donor interests and helping them find causes they care about.

“We’re on the road to becoming a full-service center for philanthropy,” Marsicano says.

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