forgood: louisville’s philanthropy magazine. issue 1/2015

STEPHENREILYSEEDCAPITALWESTLOUISVILLEFOODPORT

Microlending

Donor Tradeoffs

Who Inspires Us

ISSUE 1 / 2015 LOUISVILLE’S PHILANTHROPY MAGAZINE

TM

PersPectives:Susan’s Musings

Welcome to our first issue of ForGood, Louisville’s philanthropy magazine. I love this inaugural issue of our new magazine from cover to cover, not just because we did it, but because of the people and spirit we showcase. And I love this concept of “for good.” Not all good happens in a minute, a day, a week or a month. Or even a lifetime. We believe that. That’s why we are here — to provide a sense of permanence in an ever-changing world. We are here to stay. But we are flexible enough to know where and when to make the greatest impact. Join us. Recently, as we approached my seventh year at the Foundation, someone asked me what I’d like the Community Foundation to be known for. I love the question, and it really did not take me too long to resolve an answer. A snippet of that answer, I will share with you here. I want the Community Foundation of Louisville to be known for:

Investment in community. Whether it is a small grant to help a nonprofit purchase the software that makes everything they do better, to helping finance a small loan program for start-ups, to year-over-year funding of collective impact initiatives like 55,000 Degrees and the Greater Louisville Project. Connecting people with causes that matter. Did you know that the Community Foundation has distributed nearly $700 million since we were founded in 1984? Many of our donors have been our most generous partners in this endeavor. Whether you already know your favorite charity or would like to brainstorm ideas about the greatest need or single smallest opportunity, we are here to help. A meeting place for philanthropy and community. And I’m not suggesting bricks and mortar, but a space where conversation happens. What if we became the public “meetup” for good in our community? Kudos to the change agents and provocateurs we profile in this issue. We hope you love reading about them as much as we were inspired by their talent, tenacity and gumption. That’s what I am talking about. Community philanthropy. ForGood.Won’t you join us?

EDITOR Cara Baribeau

CONTRIBUTING WRITERS Kristie Hicks

Jerry Greenwell

Ashlie Stevens

Courtney Woeste

CONTRIBUTING PHOTOGRAPHERSWilliam DeShazer

Don Vish

COPY EDITORAmy Higgs

DESIGNJoe Weber, Bisig Impact Group

PUBLISHERCommunity Foundation of Louisville

ForGood is a publication of the Community

Foundation of Louisville. At the Community

Foundation, we are committed to promoting

the understanding and participation in

philanthropy in all of its different shapes and

forms. This publication is an expression

of that commitment that we hope helps to

inform, inspire and create a community of

thoughtful citizens dedicated to improving

the world around them.

Visit cflouisville.org to learn more.

SUSAN A. BARRY

JD President & CEO

contents /TM

contents / ISSUE 1 / 2015

feature

WEST LOUISVILLEFOODPORT

P. 12

ON tHe COVerStephen Reily

PHOTOGRAPHY William DeShazer

P. 4 MICROLENDING: DOES IT REALLY WORK?Small loans making a big difference in the lives local entrepreneurs.

P. 14 DONOR TRADEOFFSWhy does it have to be so hard to do good? Ten struggles donors face that make philanthropy tough but rewarding.

P. 10 WHO INSPIRES USMaking sure important stories are told is part of Shelly Zegart’s DNA.

12

Nonprofits WORTH KNOWING

ACCORDING TO THE HUNGER IN KENTUCKY

2014 report, 85 percent of Kentuckians experience food insecurity. Think about the significant portion of our population making difficult choices, like whether to buy food or seek medical care, have transportation or pay their utilities. Many of these people live in areas of town that are food deserts, devoid of easy access to fresh produce and unprocessed food options.

Thankfully, there are a number of nonprofits doing important work to address food insecurity and improve access to healthy food in our community.

• Blessings in a Backpack – Provides elementary school children on the federal Free and Reduced Price Meal Program with a backpack of food for 38 weekends during the school year.

• Dare to Care – Partners with over

300 local, social service agencies to distribute over 15 million meals in our community each year.

• Food Literacy Project –

Experiential education and entrepreneurial youth development program that brings the field-to-fork experience to life for local youth.

• New Roots – Through its Fresh Stop Project, families can use their SNAP benefits to purchase fresh produce from local farmers on a sliding scale.

SOMETIMES PEOPLE think that if they don’t have a lot

to give, it’s not worth giving. Not true! It’s the accumulation of small grants that can be so vital to an organization. Small, flexible, unrestricted funding helps nonprofits fulfil their mission in community. Take, for example, the Food Literacy Project at Oxmoor Farm. As the only farm-based education program in the Louisville area, this nonprofit organization inspires a new generation of people to build relationships with healthy food, farming and the land. Through its Field-to-Fork education program, it works to increase access to fresh foods, combat rising obesity rates and connect community members through farm-based education. Grants of all sizes help the Food Literacy Project do its work.

Look at the ways a small grant can make a significant impact: • $100buysseedsandplantsforTruck

Farm, a traveling, edible learning garden for schools and communities planted in the back of a pickup truck.

• $200providesproducesamplesfor

families participating in the Field-to-Fork after-school program to practice cooking healthy recipes at home.

• $300givesupto10low-income

youth a positive experience with growing, harvesting and cooking with vegetables at Oxmoor Farm’s outdoor classroom.

Learn more at foodliteracyproject.org.

2 fOrGOOd / Issue 1 / 2 0 1 5

CAN A

WHAT GOOD

SMall GranT do

IF A

SMALL GRANT

GoodCOULD DO

?

This I Believe

our small front garden. Although my charitable giving is modest, I faithfully and regularly donate to causes to fight AIDS; to stop genocide, hunger, and homelessness; to support public broadcasting, the arts, and public education; and to heal families. And I volunteer my time to empower little girls and fix our badly broken public schools. I do these things because I believe I’ve been given much, so much is required of me. The me who trudged along with my mother on a seeming fool’s errand knows that the why of it took shape long before I could explain my motivations. I never asked my mother why she collected those donations, and, ironically, the lung cancer that killed her twenty-one years ago prevents me from asking now.

But had I asked, my mother’s response would’ve been simple: “because I can.” That’s what she would’ve said. But from that look in her eyes and her daily efforts to make life a bit brighter, I know she also acted on hope—hope that tomorrow would be better, hope that her actions somehow would make a difference, and hope that the peace she felt giving herself over to these possibilities would sustain and carry her forward to see the sunshine of another day.

/ BY TRACI HIGGINS

W

BECAUSE I CAN

2 0 1 5 / Issue 1 / fOrGOOd 3

hen I was seven, I used to go door-to -door with my mother in the

housing project where I grew up. She knocked on doors and asked the residents for donations to the American Lung Association. Some would give a few coins; others, on rare occasions, a whole dollar; but most would silently shake their heads “No.” No matter the amount, my mother thanked the giver; wrote his or her name, address, and offerings on her large, white-lined envelope; and placed the money inside. After what seemed an eternity, though actually just a few hours, we returned to our apartment, and my mother counted the money. The yield didn’t match the effort: I don’t think she collected more than $10. Still, she sent the skimpy collection to the organization whose logo was on the front. I remember thinking it looked like a red telephone pole. Even as a child, I knew my mother’s actions were extraordinary. Asking poor people to give to an organization whose mission held no perceptible connection to their daily struggles to put food on the table, clothes on their children, and a roof over their head wasn’t what you did. Other charities gave to these folks; you didn’t ask them to give. To them, her efforts likely seemed foolish. Fortunately for me, my mother followed her own beat. She’d regularly sweep up trash on the sidewalk, shovel the common walkway after a snow, and plant flowers year after year—marigolds and petunias—to complement the gloriously perennial purple irises that ringed

A former Peace Corps volunteer, Traci Higgins has served as legal counsel to the 1999 FIFA Women’s World Cup and PBS, and has advanced education reform for the District of Columbia Public Schools. A proud alumna of Georgetown, Princeton, and the University of Virginia School of Law, Ms. Higgins lives in DC, where she writes short stories and serves as the Director of Human Resources for Legal Services Corporation.

THE ETERNAL SUNSHINE

“The Eternal Sunshine,” Copyright © 2013 by Traci Higgins. From the Essay Collection at thisilbelieve.org, Copyright ©2005-2015 by This I Believe, Inc. Reprinted with permission.

This I Believe is a Louisville-based non-profit organization engaging people in writing, sharing, and discussing the core values that guide our daily lives.


MICROLENDING:

DOES IT REALLY WORK?BY ASHLIE STEVENS PHOTOGRAPHY WILLIAM DESHAZER


THE COMMUNITY FOUNDATION OF LOUISVILLE made its first Impact Investment to Jewish Family & Career Services’ Navigate Enterprise Center for $200,000 in December 2013. In turn, Navigate is identifying microloan candidates and providing them with technical assistance and training to help their ventures be successful. A microloan is a very small, short-term loan with a low interest rate, usually extended to a start-up company or self- employed person. Microloans started as a solution for impoverished borrowers in underdeveloped countries. They now have been transferred stateside for underprivileged entrepreneurs who typically lack collateral, steady employment or a verifiable credit history. While it may not seem like such a small amount of money could have a lasting impact, according to Jarett Duker, the director of Navigate, it has changed the trajectory of many of the recipient’s lives.

“The recipients can make $20,000 to $30,000 a year, which means they are no longer on welfare,” he says. The impact reaches beyond increased income. From the 27 loans that have been given, around 39 new jobs have been created with a 92 percent repayment rate. Nationally, according to the California-based Opportunity Fund, “Microloans help low-income entrepreneurs help themselves, create jobs and strengthen our economy.” Forty-seven percent of microloans go to women-owned businesses and 87 percent to minority-owned businesses. Recipients’ average household income is $22,000. The business survival rate, however, is 95 percent, with three jobs created or retained per loan, resulting in an economic impact of $2 for every $1 loaned. Locally, many residents’ lives have been significantly altered because of microloans. These success stories are the beginning of reshaping the Louisville community for good.

Is $3,500 really enough money to take a traditionally unbankable individual and turn him or her into the

owner of a small, yet sustainable, business? If he or she has drive, passion and the appropriate training, the answer appears to be yes.

ALSO OF NOTE / KIVA ZIPDid you know Louisville is a Kiva Zip city? Kiva Zip is a microlending site dedicated to microloans in Louisville for small business based on strength of character over credit history. Browse borrowers, make a loan, get repaid and repeat! Check it out kiva.org\louisville


GARRY WHITE

PROFILE /

After serving six years in prison following

a marijuana trafficking conviction,

Gary White struggled to find opportunity

for employment.

According to a 2008 study by the

Urban Institute Justice Policy Center,

most individuals released from prison

held some type of job prior to incarceration

and want legal, stable employment upon

release. Some criminal justice research

suggests that finding and maintaining a

legitimate job can reduce former

prisoners’ chances of reoffending,

and the higher the wage, the less likely it

is that individuals will return to crime.

However, only 45 percent of former

prisoners were able to find jobs within

eight months of their release, due in large

part to communitywide stigma.

White was referred to business training

classes at Navigate, and subsequently

developed and launched his own small

business, G. White Homes, which buys

low-cost properties in economically

challenged neighborhoods such as

Portland, then repairs and maintains

them as Section 8 rental housing.

“I know how it feels having to move the

next day,” White says of why he decided

to invest in such properties. “I know the

feeling of having no place to stay.”

While at Navigate, he applied for a

$6,500 microloan, which he put toward

buying equipment and supplies for

completing a single-family rental property in

Portland. He combined it with a $2,500

microloan from Beargrass Christian Church,

and he now owns a total of three properties.

During the 1990s, White served as a

cook in the U.S. Army. Ultimately, he hopes

his business will do well enough to finance

his goal of building housing for homeless

veterans. For now, with the three rental

properties he owns, White is not only

earning a small wage for himself, he is also

making a difference in those neighborhoods

by cleaning up and beautifying once forlorn

properties and providing affordable housing

to his renters.


After dropping out of high school,

James Hooten had little direction until he

was referred by a counselor to YouthBuild.

At YouthBuild programs in the United

States and across the globe, low-income

young people learn construction skills to

help build affordable housing and other

community assets such as community

centers and schools.

There, Hooten received the help he

needed to complete his GED and train in

construction management and skilled

construction. More than that, YouthBuild

empowered Hooten to set goals for

his future.

After being sent off with YouthBuild’s

“Outstanding Graduate Award,” he worked

for Messer Construction but always had the

goal of opening his own remodeling and

restoration business. His dream came to

fruition when he opened Hooten Home

Services in May 2010.

This amazing transformation from

high-school dropout to small-business

owner was made possible, in part, through

a $4,000 microloan extended through the

Navigate Enterprise Center at Jewish

Family & Career Services. Navigate offers

courses such as “Small Biz 101, 102” and

“Your Own Business,” as well as services

that include business consulting.

In order to obtain a loan from Navigate,

recipients must be a member of the

organization and meet several require-

ments. Loans may be used for business

development or expansion; to purchase

inventory, materials, supplies, equipment,

tools, furniture and/or fixtures remodeling

expenses; or for specifically identified

working capital, including rent,

utility deposits, advertising, insurance,

licensing, bonding, legal and accounting

fees. Loan proceeds may not be used to

refinance existing debt or to pay personal

or business taxes.

Hooten approached Navigate for

assistance with creating bids and contracts

and with developing a marketing strategy

that would help him reach more customers,

and in turn, it has changed his life.

“In my current position at Hooten Home

Services, I am the owner, account manager

and also sub-contractor and, depending on

the job, also a general contractor,” he says.

JAMES HOOTEN

PROFILE /


JERMAINE MOORE

PROFILE /

Jermaine Moore struggled with dyslexia

as a child. Though he had trouble with

academics, he always found that he had

a knack for more mechanically minded

ventures. As a small boy, Moore would often

help his grandfather work on the family car

whenever his family could not afford to have

it professionally serviced.

However, as an adult without interest

in traditional, academics-backed positions,

Moore felt “lost in life,” until one afternoon

he came across some previously owned

lawn care equipment for sale. Moore was

able to work out a payment plan to acquire

the equipment. However, some of it was not

in working order. Moore was able to draw

on his experience from working

with his grandfather to fix the equipment.

From there, he started his own lawn

care business.

“More and More Lawn Care is a

company that will thoroughly finish any of

your outdoor projects so that you can have

beautiful scenery for your home or building,”

Moore says.

The business flourished. However, the

work was seasonal, and his income stream

dried up in the wintertime. Moore soon

realized that he would need additional

equipment to provide some form of stability,

and to grow his business, during the

unpredictable Louisville winters.

According to Bloomberg Business,

eight out of 10 entrepreneurs who start

businesses fail within the first 18 months —

meaning that a whopping 80 percent crash

and burn. The No. 1 cited reason is they

simply run out of cash.

Microloans — along with business

training — are an ingenious way to help

small-business owners plan for the future.

Moore approached Navigate for

assistance, and upon completing its

small-business training, he was approved

for a $4,000 microloan, made possible

through the Community Foundation of

Louisville’s Impact Investment initiative.

“I was able to use it to buy a salt truck

and some other winter equipment,” Moore

says, an investment that will ensure his small

business is sustainable throughout the

entire year.


SHAMEKA O’NEIL

PROFILE /

One year ago, 33-year-old Shameka O’Neil

was living with her parents, unsure of what

career direction she truly wanted to take.

However, O’Neil’s story isn’t the cliched

“return to the nest.” She had already

graduated from the University of Kentucky

with her bachelor’s degree in political

science, and then gone on to law school

at Northern Kentucky University. O’Neil had

worked for Williams & Associates in Louisville,

as well as for a Jefferson County prosecutor.

“I wasn’t sure where I ultimately would

end up, but I just knew that I wanted to be

a light in the community, whatever I did,”

she says.

However, O’Neil saw a glimmer of

hope when she passed the legal bar exam.

After that, she went to Navigate Enterprise

Center for assistance in learning how to

open a home-based law practice, but she

was soon inspired to open her very own

law office.

“The program there helped me develop

a practice plan,” O’Neil says. After completing

the program, she was awarded a $5,000

microloan to open S. Lynn O’Neil Attorney at

Law LLC. It’s a process she describes as a

true community effort.

“The marketing has been handled by a

group of students at the University of

Louisville business school, Dr. Kemelgor’s

students,” O’Neil says. “But really, it’s been

a word-of-mouth thing.”

She received support from Neighborhood

House, a community center serving Portland,

one of Louisville’s oldest and most diverse —

but also most impoverished — communities.

“Since receiving my loan from Navigate

Enterprise Center, my business has just

really grown. It has been really rewarding,”

O’Neil says. “Having the help to make it

work — both monetarily and the support

they have offered — that was a really big

thing. That inspires me to do big things for

my future and the community.”


SHELLY ZEGART answers the door with a generous smile and a twinkle in her eyes. She is gracious, fast-talking, and moves fluidly through her home. She loves people, she loves Kentucky, and if she has her way, the rest of the world will, too. The author, consultant, curator and philanthropist took a casual conversation with her daughter and turned it into a spark of creativity with the Bluegrass State as its beneficiary. While her daughter was speaking at The Pacific Council on Foreign Relations, a man raised his hand during the Q&A portion and said, “Amy Zegart, I grew up one block from your grandfather’s drugstore at Seventh and Oak.” “That was my ‘ah-ha’ moment!” she exclaims. “That man took it

from that high-level group, filled with Nobel Prize winners and the like, right home to Kentucky.” “Kentucky is a lot more important than we realize,” she continues, “I know these really cool people doing amazing things — they all claim strong Kentucky connections.” As a self-proclaimed “connector,” Zegart picked up the mantle and charged on. The vision took shape in the form of Kentucky to the World in 2012, and the 501(c)(3) was born in the fall of 2014. It’s a showcase for engaging stories of Kentuckians who make significant contributions that might otherwise go untold. “These are the stories that we need for corporate recruitment, economic development and the retention of young people,” she declares.

“Did you know there is a Nobel Prize winner from Falmouth, Ky.?” I didn’t. But I do now. This is not Zegart’s first foray into making sure important stories are told. She was the co-founder and the driving force behind The Kentucky Quilt Project Inc. and the executive producer and host of “Why Quilts Matter: History, Art & Politics” a nine-part documentary featured on more than 200 PBS stations. When it comes to shining a light on treasures that surround us, Shelly Zegart is just the person to get the conversation started.

For more information, please visit kentuckytotheworld.org and whyquiltsmatter.org.

Who Inspires Us SHELLY ZEGART

BY KRISTIE HICKS PHOTOGRAPHY DON VISH

Give Local Louisville is part of the Community Foundation of Louisville’s celebration of connecting people who care with causes that matter to them. Nonprofit registration will be open May 6 – July 31.

Returns October 1, 2015

THE BIGGEST DAY OF

GIVING

www.givelocallouisville.org

Special thanks to an anonymous foundation and our other match and prize pool sponsors:


GIVE LOCAL LOUISVILLE

INFO FOR DONORS, SPONSORS, NON-PROFITS

Nonprofits:Don’t miss out on this great opportunity to raise money and earn proportionate match and prize dollars! Register now at givelocallouisville.org.

Donors:Online credit card giving will take place from midnight to midnight on October 1, 2015 at givelocallouisville.org. Foundation donors will be able to use their funds at the Foundation to participate, but restrictions apply. Visit cflouisville.org for more information.

Sponsor Information: Generous sponsor support is crucial to the success of Give Local Louisville. Contact the Foundation to learn how you can be a part of this exciting initiative and help hundreds of nonprofits in our community!

Proportionate Match Pool Sponsors:

Media Sponsors:

STEPHENREILY

COVER STORY /

BY COURTNEY KINNEY WOESTE PHOTOGRAPHY WILLIAM DESHAZER


SEED CAPITAL WEST LOUISVILLE FOODPORT

STEPHEN REILY didn’t set out to revitalize a

neighborhood. Or to become a real estate developer at the helm of one of the most ambitious agriculture projects in the country. He simply saw a local food economy that wasn’t working as well as it could and, being an entrepreneur and philanthropist, thought he could help. “I’ve started a couple companies because I thought: someone needs to do this, there’s this white space, there’s something not happening, there are these unconnecting dots,” says Reily, 51, co-founder and chairman of the board of the non-profit Seed Capital Kentucky, chairman of the Greater Louisville Project and longtime Community Foundation of Louisville donor. But he didn’t realize just how many dots there were. It wasn’t just a local food economy ripe for growth, it was also a mayor committed to the cause and a neighborhood hungry for change. Drawn together by government, non-profit and for-profit efforts, the picture that has emerged from those dots is the West Louisville FoodPort, a $50 million development Reily and Seed Capital are leading that will ease the flow of local and regional foods from farmers to consumers and bring not only access to fresh food, but also an estimated 200 permanent jobs to the most economically depressed area of Louisville. FoodPort is a mixed-use development where farmers can bring their entire crop to be processed, sold, marketed and distributed. The 24-acre campus, funded by public, private and philanthropic dollars, is set to break ground this summer and be completed in 2016. It includes a biofuel facility that can convert farm waste to clean, organic methane and compost, retail space for a juicery and other stores, office space and a demonstration farm for the Jefferson County Extension Agency, and marketplace and playground open to the street. All of this will sit on a currently vacant expanse of land at the convergence of the impoverished

Shawnee, Russell and Portland neighborhoods in West Louisville. It all started with Reily’s appreciation for the Louisville food scene. He was energized by the enthusiasm for locally grown food but also troubled by what he calls the “bottleneck” between the farmers who produce the food and the people, chefs, schools and other businesses that want to buy it. Grasshopper Distribution, a local distributor of farm-fresh foods, was filling that need to a degree, but it was having trouble staying afloat. Even with a local food distributor, farmers still had to work too hard to get their product into the marketplace and consumers had to work too hard – or pay too much – to get it onto their tables. Reily and colleague Caroline Heine, already working together in his for-profit businesses, co-founded Seed Capital Kentucky in 2011 to help ease that bottleneck. They started funding technical assistance grants directly to farmers to help them build business plans. They created awards programs to express appreciation for farmers. Perhaps most importantly, Seed Capital Kentucky funded a 2012 study to quantify local demand for food in Jefferson County, not just with individual consumers but with hospitals, restaurants and the public school system. The results? Not only did it show that 72 percent of people already buy local food, but the demand was two to three times greater than the supply. And the desire for local food was consistent across all neighborhoods and socioeconomic levels. “If we can meet that demand among the commercial buyers alone, we’d have an $800 million impact on our region every year,” Reily says.

They also started looking at the idea of a food hub, a one-stop shop for farmers that manages the storage, distribution and marketing of locally

grown farm products. That’s what Grasshopper had been, but the model didn’t work. What was missing, Reily says, was infrastructure. Also observing the importance of Louisville’s food economy was Mayor Greg Fischer, who took office in 2010 and made the local food economy part of his economic development platform. “The political piece was important,” Reily says. Fischer’s platform “meant two things for me: one, we were going to have real civic leadership in this, and the other was the use of the phrase ‘local food economy.’ He wasn’t picking a piece of it. He was talking about the industry, and I said, ‘that’s the industry I want to figure out how to help.’”

o, when they started talking about building a food hub and needing infrastructure, Seed Capital Kentucky

went to the city. Together, they started looking for parcels that would fit the needs of their vision: big enough to house the kind of operation they were planning, in a neighborhood to allow interaction with people and consumers, but also close to the interstate and with wide enough roads to allow trucks to drive in and out. They quickly homed in on the former site of the National Tobacco Co., a $1.4 million blighted expanse of land owned by the city and bordered by 30th Street, Muhammed Ali Boulevard and Market Street. West Louisville, once a thriving center of commerce, is now one of the most economically depressed areas in Jefferson County. Unemployment is 33 percent, compared with 6.6 percent across the rest of the city. As chairman of the Greater Louisville Project, Reily was familiar with the problems facing West Louisville and knew that real change would have to involve more than just donating money to a program or social service. It needed the kind of public and private investment that would bring jobs

THAT’S THE INDUSTRY I WANT

TO FIGURE OUT


S

continue on p. 17


10TRADE-OFFS

dONOrs faCe tHat Make PHIlaNtHrOPy

tOuGH but rewardING:

tOP

PHILANTHROPISTS OFTEN SAY that giving away money is tougher than any other job they have had. What makes philanthropy particularly demanding are the tensions and trade-offs donors constantly struggle with to achieve thoughtful, effective giving. As F. Scott Fitzgerald aptly said, “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see things as hopeless and yet be determined to make them otherwise.” After advising wealthy donors for more than a decade, my colleagues and I at Rockefeller Philanthropy Advisors have identified 10 tensions with which every strategic donor wrestles. The dichotomy should make clear that there is no right or wrong, but that each of these ideas factors into the giving equation, resulting in philanthropy that is both inspiring and challenging. Efficiency vs. effectiveness. Every donor wants to know that the nonprofit he or she donates to is a good, efficient steward of resources. Yet efficiency is not sufficient: A nonprofit must also be effective in its work to prove worthy of donations. So don’t look just at measures of activity (like how many youths at risk are in a given program) but also at indicators of outcomes (how many kids stayed in school as a result of that program vs. the norm for that group). Focus vs. flexibility. Donors can make a great impact

Giving money away should be easy, right? Challenges, trade-offs and tensions are part of the territory when it comes to thoughtful, effective giving.

BY MELISSA A . BERMAN


by focusing on a select few causes rather than spreading their funds thinly among several. That said, adhering too closely to a set of rigid strictures dictating what you can support may result in missed opportunities and take the fun out of philanthropy. By focusing more on the outcomes you care about and less on strict activities to support, you can have a greater impact and contribute to causes that engage you. There is no need to ignore the dangerous spread of Ebola or not participate in the “ice-bucket challenge” because they do not match your giving rules. Capacity vs. capability. An eternal question all donors struggle with is whether it is better to affect the largest number of people or to do the best possible job for a smaller, targeted group. A great program may help 150 low-income students succeed in college, but it may not have the capacity to expand its efforts to 150,000. The best solution is for a donor to find an organization with great capabilities and give it the capacity to achieve at a larger scale. Alas, that solution isn’t always feasible, so you may have to choose between a small, highly effective program and one that works at scale. Speed vs. thoroughness. Disasters, like the earthquake in Haiti in 2010, often inspire a swift and large influx of donations. They can also reveal issues that require more long-term, strategic help, like shortcomings in Haiti’s infrastructure and health-care system. Give away some money immediately after a disaster strikes to first responders, then pause—ideally for several months—to identify and support long-term solutions that can have a large impact in the area.

Solutions vs. systems. People often come up with nifty solutions to immediate problems, like bringing solar power to a small village in Afghanistan. However, the lack of infrastructure or accountability can limit the effects of the solution and keep it from being sustainable, self-sufficient, and therefore a true solution. Who’s going to fix that solar-power system when something goes awry? By ensuring that systems are in place to support proposed solutions, you can avoid continually resolving the same problem. Unique vs. standard. Since donors want to put their money into something that feels exciting and new,

nonprofits often compete for money by stressing what makes them unique. Still, sometimes the biggest impact can come from simply improving a system that works and helping it expand, instead of reinventing the wheel. Independent vs. collaborative. Donors with big ideas sometimes find they can be more successful following the Steve Jobs model than by collaborating with other organizations. Like Mr. Jobs, they have found that working independently allows them to test their ideas and bring them to market more quickly than waiting for a consensus. Nevertheless, collaboration is critical for solving large-scale endemic problems. Even a mammoth organization like the Bill & Melinda Gates Foundation doesn’t have enough resources by itself to create a viable health system for West Africa. Think through how and when you’d like to collaborate with other donors. Experiment vs. investment. Many donors see their gifts as an investment with a social return, deeming philanthropy a form of “risk capital.” But it’s perhaps more helpful to think of philanthropy as an experiment, with a thesis, methodology, protocol, and results to assess. Like scientists, we can accept and learn from failure if the experiment is well run. Leader vs. organization. Donors are drawn to passionate, charismatic leaders. But not all charismatic leaders are good managers. In addition to looking for strong leaders, you should examine the organization’s strength—whether it’s full of talented people and run well—when considering whether to donate or work with it. Ethical altruism vs. donor-driven priorities. The U.S. has a long tradition of supporting a broad range of charitable purposes, and our tax code reflects that diversity. We also rely more on private philanthropy to support arts, education, and health care than other countries do. And while some believe that certain forms of giving are better than others, most of us believe that philanthropy is a voluntary and personal decision. There’s no hierarchy of goodness. Each of these tensions makes strategic philanthropy both difficult and rewarding. To help navigate these tensions, donors should evaluate which ones are most important to them and how they see themselves in philanthropy. Then and only then can donors determine which trade-offs they are willing to accept. It’s not a perfect world—that’s why we need philanthropy.

Melissa A. Berman is chief executive of Rockefeller Philanthropy Advisors.

TENSIONS MAKE STRATEGIC PHILANTHROPY BOTH

DIFFICULT AND REWARDING

income tax. Consider naming charitable beneficiaries in your retirement account instead of naming them as direct beneficiaries under your Will.

Naming a charity as beneficiary of a life insurance policy is also a simple, effective way to satisfy charitable objectives. You may even consider transferring ownership of a life insurance policy to a charity. The owner will receive a charitable deduction for the value of the policy as well as the amount of any premium payments given to the charity to keep the policy.

These are a few of the estate planning opportunities you should consider. Doing so will allow you to see and enjoy the benefits received by the charities you support during your lifetime and rest assured that they will continue to benefit from your generosity once you are gone.


Estate planning is the orderly process of acquiring, managing and disposing of your assets. It is not just preparing and signing a Will. Purchasing a house, making gifts to children and grandchildren, and making gifts to charities are all part of estate planning. It is an ongoing process during a person’s lifetime and culminates when your signed Last Will and Testament is filed to be probated.

For more than a decade, changes to the federal estate and gift tax laws have made it easier to transfer assets during your lifetime and at death without paying taxes. The current law allows individuals to gift assets valued at $5,430,000 during their lifetimes or at death without gift or estate taxes. As the tax exemptions increase, concerns have been expressed that charitable giving will slow significantly. This is not the case. In fact, lifetime giving by individuals has increased in recent years and at a higher rate than gifting at death. Gifts made during their lifetimes continue to allow individuals to receive income tax deductions. However, you may not get an estate tax deduction for gifts made to charities at death.

Depending on the size of an individual’s estate or income level, tax-savings opportunities are available for making gifts to charity. Remember, however, that while tax savings may be a prime motivator for some to make gifts to charity, it is not the sole motivator. A desire to benefit those in need, your alma mater, church or other favorite cause continue to be the most significant factor for many individuals.

Lifetime charitable giving can be as

simple as writing a check to your favorite charity. Many people also take advantage of gifting appreciated stock, real estate and other property to obtain a full deduction for the value of the gifted property without incurring capital gains if the property was otherwise sold.

An additional planning opportunity involves naming charitable beneficiaries of qualified retirement accounts. Retirement accounts are fully includable in an estate for determining federal estate taxes. When a non-charitable beneficiary receives payments from such an account, the amount received

is reportable for income tax purposes by the non-charitable beneficiary. Naming a charity as beneficiary allows the amount distributed to pass to the charity free from federal estate tax and

CHANGES TO THE FEDERAL ESTATE

AND GIFT TAX LAWS HAVE MADE

IT EASIER TO TRANSFER ASSETS

Advisors CORNeR

BY JERRY GREENWELL

INCLUDING CHARITABLE GIVING IN YOUR ESTATE PLAN

Jerry Greenwell is a member of Frost Brown Todd LLC and is the former Chair of the firm’s personal planning and family business department. He concentrates his practice in the areas of estate planning, trust and estate administration, and charitable planning. He also represents individual and corporate executors and trustees as well as beneficiaries of estates and trusts. He represents clients with a broad range of personal and family needs, business planning and succession, all of which often involve sophisticated estate and gift tax issues. Jerry is a former Chairman and Board Member of the Community Foundation of Louisville.

and people into the area. The FoodPort is expected to do just that. The impact of jobs that will be created or relocated there are twofold: one, the organizers and employers are committed to hiring people from West Louisville, thereby making a dent in the unemployment rate. And two, bringing in employees with disposable income means more dollars spent in the neighborhood and the potential for residents to start their own businesses. “We understand the benefits that come with people with good salaries being there every day — and needing to buy lunch and needing to buy food on their way home — and the kind of impact that will have,” Reily says. “The ability to build the neighborhood as a marketplace is something that we’ve all started to appreciate.” “What the neighbors have appreciated,” says longtime community organizer Jennie Jean Davidson, “is Seed Capital’s transparent and open approach to the project. Questions and input are encouraged and incorporated into the plans.” A Community Benefits Agreement, a covenant between the developers and the community council, is being drafted to ensure the needs of the community are

being met. “Seed Capital’s efforts have gone a long way to building the community capital required to pull off such a big project,” Davidson says. “They aren’t offering up a plan and saying, ‘this is what it is,’’ she adds. “They’re saying ‘here’s what it looks like – now what? How do we open this up more? How do we bring community more into this?’ which, I think, is very exciting.” Indeed, the community-building aspect of the FoodPort project is what Reily says is most exciting for him. “It’s really rewarding trying to get this right,” he says. “Being a non-profit developer has allowed this to be both an economic development project and a community development project. We’re able to take time and invest in getting that right.” onnecting the dots that

led to FoodPort wouldn’t have been possible without the collaboration of the

public, private and philanthropic sectors. The biodigester – a for-profit enterprise – accounts for more than half of the investment, and organizers estimate they’ll need to raise about $20 million in federal grants, tax credits and philanthropic gifts. Additionally, support from a number of funders, including a


continued from p. 13

C

grant from the Community Foundation of Louisville, allowed Seed Capital to develop a master plan to present to key stakeholders and help launch the capital campaign. Reily says Seed Capital raised about $2.6 million in individual and foundation grants between January and April, including contributions from the James Graham Brown Foundation and Reily and his wife’s fund, the Stephen Reily and Emily Bingham Fund. “When you have a complicated goal that involves the marketplace and policy for business and public good, it really takes all the tools we have from for-profit enterprise, to government for policy and investment, and the non-profit sector,” Reily says. It also wouldn’t have been possible without people like Reily, a successful entrepreneur willing to apply the skills he’s learned in business to a project that nets him no personal profits. “It’s really rewarding when you’re really loving the philanthropy you’re doing, whether it’s where you’re giving money or working,” he says. “For me, the energy I’ve put into it as philanthropy is actually a lot more like what I’ve done in the rest of my life.”

Did you know Kentucky offers a tax credit to incentivize philanthropy throughout the Commonwealth? Donors can make a long-term investment in their communities or favorite nonprofits by contributing to a permanently endowed fund at a community foundation and receive a tax credit in the process.

STATE TAX CREDITS ARE AVAILABLE ON A FIRST-COME, FIRST-SERVED BASIS BEGINNING JULY 1.

Contact Caroline Meena, JD, Gift Planning Advisor 502.855.6957 or [email protected].

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Connect with the work of the Community Foundation of Louisville by visiting the new website: cflouisville.org

MICRO- LENDING:DOES IT REALLY WORK?

forgood: louisville’s philanthropy magazine. issue 1/2015

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