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Cumberland funder focuses on investing

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By Todd Cohen

FAYETTEVILLE, N.C. — In October 2005, the board of the Cumberland Community Foundation set a goal of raising $6 million in unrestricted gifts over the next five years.

Since then, the board has raised $3.5 million in unrestricted funds through gifts and pledges.

Based on an increase in its investment income resulting from the growth of its endowment, the foundation this fall expects to award $425,000 in grants, up from $350,000 last year.

And to strengthen its appeal to prospective donors, the foundation plans to develop metrics to measure the impact of its grants, and shift its perspective from that of funder to community investor.

“As we grow our grantmaking budget, we want to make sure we are getting the highest return on the investment in the community,” says Mary Holmes, executive director.

Launched in 1980, the foundation has a total of $35.1 million in assets, with roughly $21 million of that in donor-advised funds and other endowments whose use has been restricted by donors.

In 2006 alone, the foundation received nearly $4.4 million in total gifts, including $2 million in unrestricted gifts, with 77 percent of all gifts totaling $250 or less.

In December alone, the foundation received 216 gifts totaling $1.9 million.

“Our board wants to make sure we are encouraging philanthropy at every level,” says Holmes. “Our goal is to be the community’s foundation.”

Whether they were large or small, she says, a higher percentage of gifts to the foundation last year were unrestricted because the foundation solicited them.

“If you want to raise unrestricted money, you have to ask for it,” she says.

Unrestricted gifts the foundation received in 2006 increased its unrestricted endowment by one-third, to nearly $8 million.

The foundation last year also saw an increase to $1.2 million from $870,000 in its endowment that supports administrative expenses, and saw an increase to $4.6 million from $4.2 million in funds set up by eight donors that are designated for either administrative support or community grantmaking.

Last February and March, the foundation revamped its grant guidelines, for the first time setting four priority areas in which it would make grants.

In order of priority, the foundation now makes grants in the areas of economic development and community advancement; arts and culture; education; and the environment.

Based on two-page letters of intent that nonprofits seeking support must submit by Aug. 1, the foundation invites selected nonprofits to submit a longer application.

Last year, the second year it used it letter-of-intent process, the foundation received 42 letters requesting a total of $1.6 million, and awarded a total of $350,000 to all nine organizations it had invited to
submit full applications.

This year, the foundation’s top organizational goal is “to operate a sound, accountable, open community foundation,” Holmes says. “Operational integrity translates into development success.”

In 2006, for example, the foundation was the second in the state to receive a notice from the Council on Foundations in Washington, D.C., that it was in compliance with national standards for community foundations throughout the U.S.

The foundation this year also will continue to work to engage its board and the community in raising unrestricted funds.

And the board will be meeting for one day each in March and May with consultant Hal Williams of the Rensselaerville Institute in Rensselaerville, N.Y., to develop its new outcome-based approach to community investment.

“The greater the impact in the community,” says Holmes, “the easier it is to tell the story of why creating a community fund is an important thing for a donor, why giving unrestricted money is a safe and good thing to do.”

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