By Todd Cohen
GREENSBORO, N.C. — Four years ago, wanting to better respond to increasingly volatile financial markets, the Community Foundation of Greater Greensboro began looking for ways to further diversify its investment strategy.
The foundation, which had been allocating 60 percent of its assets to equities and 40 percent to bonds, now allocates 70 percent to equities, 20 percent to bonds and 10 percent to alternative investments such as hedge funds.
And it has moved from putting all its equity investments in large-cap holdings to a mix of large cap, small cap and international investments.
The strategy has paid off: Last year, the foundation’s return on investment totaled 8.7 percent, compared to 7 percent on average for community foundations throughout the United States, and capped a three-year period in which its annualized return totaled 14.5 percent.
The move to diversify investments, along with efforts to better serve donors, have helped the foundation increase its assets to $95 million, up from $50 million in 1999, says Walker Sanders, president.
Last year, the foundation received gifts totaling over $16.3 million from 1,700 individuals, and made over 2,000 grants and 150 scholarships totaling nearly $13.8 million.
“Our strategy has been the expansion of our existing donor base and bringing in new donors through visibility and strategic initiatives,” he says.
Now, based on a new strategic plan, the foundation aims to strengthen its financial capacity, develop philanthropic leadership in the community, boost collaboration in addressing critical community issues, and increase community understanding of its work and priorities.
To build its financial capacity, the foundation aims to generate more contributions and planned gifts to its operating endowment, which totals nearly $3 million and generates about 15 percent of the organization’s $ 1 million annual operating budget, Sanders says.
The foundation also wants to grow its grantmaking endowment, which totals roughly $15 million and is the source of roughly $700,000 a year in discretionary grants, shy of the $1.4 million to $1.5 million in requests for discretionary grants.
One possible strategy for building that endowment, Sanders says, will be to form relationships with corporations and other foundations that want to support a broad-based community grants program.
The foundation’s board allocates 40 percent of its discretionary grants to strategic partnerships and initiatives, and 60 percent for general purposes such as building “social capital” and nonprofits’ organizational capacity.
To help develop philanthropic leadership, the foundation wants to serve as a “center for philanthropy” that connects and provides services and resources for individual donors, nonprofits, corporations and foundations, including national and regional foundations.
One goal would be to attract more “investment capital” for initiatives in which the foundation is involved, Sanders says.
As part of its effort to boost collaboration, the foundation will focus particular attention on housing, education and community revitalization, Sanders says.
And to raise community awareness about the foundation, has says, its board has created a committee to assess its marketing and communications efforts and recommend improvements.
“We need to do a better job telling our story,” Sanders says. “We want to be that central resource for people to draw upon to address the issues that are important to them in the ways that are most efficient for them to address them.”