By Todd Cohen
GREENSBORO, N.C. — A videotaped 1999 talk by the retired CEO of United Guaranty to fellow trustees of the Cemala Foundation in Greensboro set in motion actions with big implications both for the foundation and the city.
Unable to attend a board retreat to assess the foundation’s first five years of operation, Bill Hemphill suggested on videotape that the foundation should move quickly to address Greensboro’s sagging economy.
Tackling big problems has been the focus of the $45 million-asset foundation.
Created by Martha and Ceasar Cone II, the late president and chairman of Cone Mills and the son of its co-founder, Cemala supports collaborative initiatives in Guilford County that take a preventive and comprehensive approach to address the needs at-risk families, assure the well-being of children, strengthen neighborhoods and foster self-sufficiency.
Given those priorities, the foundation moved quickly in responding to Hemphill’s suggestion, opening a community conversation that led to the creation of Action Greensboro one year ago.
The pioneering collaborative initiative – which includes the Bryan and Weaver foundations and other funders and corporations — plans to invest nearly $37 million in the first phase of an effort to create local jobs and strengthen local schools.
“Our mission is naturally linked to what we hope to accomplish through Action Greensboro,” says Priscilla Taylor, the foundation’s executive director.
The foundation has agreed to contribute $7.5 million to the initiative over five years — a big commitment for a foundation that makes annual grants totaling 5 percent of its assets, or nearly $2 million a year.
The foundation probably will contribute the bulk of the funds to Action Greensboro in the first few years, Taylor says, and will continue to make grants at its normal level.
As a result, she said, the foundation will take a harder look at all grant requests.
“We want to make sure that every grant proposal we approve has a good chance to succeed,” she says.
The foundation receives 45 to 50 grant applications in each of its two grant cycles each year, and funds roughly two-thirds of them.
Supporting both Action Greensboro and its normal grantmaking is prompting the foundation to take the unusual step of dipping into its endowment assets.
To preserve and build their endowments, which are invested and earn interest, foundations typically use only investment income to make grants – and to comply with the legal requirement that they make grants each year totaling at least 5 percent of their assets.
In addition to high-impact efforts it supports, the foundation also makes grants that help nonprofits strengthen their internal operations, or “capacity.”
The foundation, for example, invests in helping nonprofits be more effective by supporting strategic planning, retreats and participation in nonprofit management courses.
Cemala also makes some grants to address immediate community needs.
“We need to strike a balance,” Taylor says, “because, especially in this community with the economy as it is, a lot of band aids are needed.”