Family foundations such as 2-year-old Eckerd are no different under the law from any private foundation, but they often behave differently in how they give. Out: Pet causes like the founder's alma mater or good friend Buffy's Charity Ball. In: Venture capital for societal change. Conditioned by financial success, the new foundations expect a whopping social return on their investments. Getting that return usually means tuning out causes that once had a claim on the founder's wallet. Instead, the new foundations focus on being impact players, able to discern which projects and non-profits have the best ideas -- and can deliver performance. "It's about value," says JoAnne Chester Bander, executive director of Miami's Donors Forum Inc., a regional association of foundations and corporate givers.
Among the new crop of foundations, Eckerd stands out for how early it realized the value proposition and for how quickly it plans to address it. Most new foundations stumble along in the same giving pattern until the founder dies. But Jack Eckerd, now 87, didn't want to blow $100 million in drugstore wealth on ineffective do-gooding. Instead, he, his wife, Ruth, and their children settled from the start on giving money only to innovators in helping kids and their families -- with an emphasis on preventing problems.
Given that Eckerd owed much of his wealth to replicating a successful format, the foundation with his family name wants effective programs that can be replicated nationally. "We're talking about systemic change, not necessarily local. That's the real opportunity we have," Clark says, "making some fundamental changes."
An early example: a $100,000 grant to the Tampa Metropolitan Area YMCA to open "Success Centers." The centers fill after-school hours for elementary school children and teens in neighborhoods rife with crime, substance abuse, poverty, poor schools and sexual activity. Housed in churches, the activities include Bible study, tutoring and computer time. "They're all about reaching kids and families in tough neighborhoods and developing long-term nurturing relationships," says Mark Dufva, the YMCA's community outreach director.
Measuring their return
Unlike inexperienced givers, the Eckerd foundation makes applicants for grants spell out how they will measure their own effectiveness. Many can't answer. Eckerd still will fund a good idea, but also helps the non-profit devise measures of accountability -- on the theory that a project that can prove its worth will be able to command funding from other foundations.
The YMCA program, for example, measures effectiveness by academic performance and by the Eckerd foundation hallmark -- prevention, as in kids not committing crimes and not dropping out of school.
Clark, a 52-year-old attorney and Eckerd's son-in-law, says the foundation learned valuable lessons by experimenting with giving during its first two years -- how much, to whom, for what. In November, for example, the foundation's nine-member board, made up of Ruth and Jack Eckerd and the seven children, ditched a too-confining $100,000 limit on individual grants. Clark recalls Eckerd himself stressing that mistakes in grant-making should be inevitable if the foundation pursues its mission as it should. "Because of risks that were taken, we now have the money to do this," Clark says. (Eckerd had a stroke in 1998 that largely impaired his speech.)
The philanthropy industry sees Eckerd as an up-and-comer destined to join Miami's John S. and James L. Knight Foundation, Jacksonville's Jessie Ball duPont Fund and a select few others as endorsers -- foundations with enough prestige that a grant from them signals other donors that a project or nonprofit has something worth funding. "The impact the Eckerd Family Foundation will have will be even more significant than its [$100 million]," says David Odahowski of Orlando's Edyth Bush Charitable Foundation. "People will really watch to see what these folks do."
Charity Trends
Turning to Endowments
Increasingly, non-profits seek endowments to alleviate dependence on annual appeals. An Archdiocese of Miami campaign under way aims to raise a minimum of $75 million, $46 million of which for the first time will go into a trust to support a laundry list of causes: pregnant women, AIDS patients, seminarians and retired priests. Many fall under south Florida's Catholic Charities, which, with a $20-million budget heavily funded by government, is the largest private social service agency in the Southeast U.S., according to the archdiocese. The church makes a historical argument to the parishioners it hits up for funds: Many Catholic church sites in Florida were paid for by the state's relatively small Catholic population in the 1940s and 1950s. "They did for us what we are now trying to do for the church 50 years from now when we're all gone," says Monsignor William J. Hennessey, the Miami archdiocese's vicar general.
Pitching snowbirds
Persuading visitors to do part of their donating in Florida has long been a problem for non-profits here. Some strategies:
- Local fund-raisers now see a website as providing a way to keep in contact when snowbirds flock north. One example: the Community Foundation for Palm Beach and Martin Counties, www.cfpbmc.org.
- Groups also try to convince donors that Northern state taxing authorities will give credence to Florida residency claims if Florida causes receive donations.
- Shannon Sadler, president of the Community Foundation for Palm Beach and Martin counties, organizes "need" tours of western Palm Beach County so that beach-goers and golfers will realize that even a wealthy county has needs. "I want to make sure our residents know what this whole county is like," Sadler says.
Social Entrepreneurship
Non-profits have come a long way from the museum gift shop. The five-county Citrus Council of Girl Scouts projects an eventual $500,000 annual profit from two Mail Boxes Etc. franchises it plans to open this year. The council predicts "financial disaster" by 2005 for non-profits unless they take new approaches. The reason: Many corporate donors stiff organizations that don't offer a "perceived benefit." Plus, growing numbers of non-profits -- 2,000 now in central Florida alone -- chase the donors that are left. Girl Scouts can peddle only so many cookies, says Ruth Patrick, the council's community relations director. The Mail Boxes sites will have their own managers and staff. The council hopes to lighten the financial burden of the 25,000 girls who carry the bulk of it now.
Community Foundations
Community foundations have high hopes for the fledgling, Tallahassee-based Community Foundation of North Florida. Dreamed up by estate attorneys and accountants, the foundation covers nine counties. Other foundations hope it will serve as a showpiece to convince lawmakers and administrators of the importance of tax breaks for foundations and givers. It anticipates having a $5-million endowment by the end of the year. "A pretty remarkable start," says foundation secretary M.W. "Bud" Carlson, a Tallahassee insurance agent. Next up on community foundations' wish-list to blanket the state: a foundation to cover wealthy Indian River and St. Lucie counties.
Legislative Giving
Non-profits are looking to the Legislature for some giving: An exemption from paying sales tax, repeal of the intangibles tax, especially for charitable remainder trusts, and a say in tobacco settlement money are the issues foundations are pushing. The Longwood-based Florida Federation of Community Foundations is new to lobbying, but Executive Director Bill Dodd says the group has "become a champion for the non-profit sector" by pushing for the sales tax exemption.