Foundation announces plan for huge donation

The Elkhart County Community Foundation's annual luncheon meeting at noon Wednesday, Oct. 9, features the description of how the foundation plans to invest millions of dollars each year in the communities of Elkhart County.

Posted on Oct. 9, 2013 at 1:00 a.m. | Updated on Oct. 9, 2013 at 5:51 p.m.

ELKHART — Residents of Elkhart County want to spend millions of dollars each year on children and making this a better place to live, while still supporting the work done by nonprofit agencies.

That’s the essence of the framework the Elkhart County Community Foundation’s board and staff unveiled Wednesday afternoon, Oct. 9, in addressing how they plan to use the proceeds from Guy David Gundlach’s unprecedented, unrestricted gift of $150 million to the foundation.

It was part of the foundation’s annual report to the community, where they described the growth from a $45 million foundation giving out $500,000 a year a couple of years ago to a $200 million foundation giving out more than $8 million annually in a couple of years.

The board and staff created a plan to let the staff handle the smaller requests and to let a larger group of community members make decisions on the larger requests. For instance, in the next fiscal year they could give out $2 million in gifts larger than $250,000, part of $4.5 million in total grants. The numbers will grow in time.


They asked roughly 1,000 members of the community four things:

Ÿ What things would you be thinking about in terms of funding priorities?

Ÿ What criteria will you use to make the decisions?

Ÿ What role should the foundation play, leading priorities or supporting established ones?

Ÿ What harm could be done and what are the risks?

Brian Smith, chairman of the foundation’s board, said, “This year-long conversation across our county has truly guided our decisions.”

In an interview with The Elkhart Truth, Pete McCown, president of the foundation, said, “Whether or not we were visiting with Amish bishops, residents of Faith Mission, senior citizens, new immigrant families, multi-generational captains of industry, everyone was unanimous in the idea that the foundation should focus a lot of its energy on the next generation of people.”

He told a story of a father at Faith Mission with his wife and two children. “He and his wife suffered substance abuse addictions. Their 4- or 5-year-old daughter was sitting in their lap while we conducted this focus group, she was coloring, and he said effectively, ‘I’ve made a mess of my life and I’m trying to get things back in good order, and Faith Mission is giving me that avenue. Please don’t let this happen to my kids. If there’s anything you do with this money, give my kids a chance to make a better life for themselves than I’ve made the mess of mine.’”

Amish who were interviewed said similar things. “They’re saying, ‘You know what? We need our kids to be ready to do the Amish community but within the modern environment. We need help. We’ve got disabled kids, we’ve got kids with learning disabilities, we could use your help in this area. We’ll take responsibility for our own community and our own lives, but help our kids. There are some things you can really make a difference in our kids’ lives,’” McCown said.

“And senior citizens are saying, ‘I’ve lived my life and there are days I’m lonely, but you know what? Kids deserve a bright future in our community.’ It was fascinating. That was so crystal clear,” McCown said.


After the listening tour, the foundation’s board members created a framework so staff members can handle smaller grants and new community committees can decide on bigger ones, with the biggest requests coming to the foundation’s board.

Because of that, the board put more strict rules on board members and staff members, with conduct standards and term limits for board members.

Dzung Nguyen, a member of the foundation’s board, said there’s a big difference between where the foundation was and where it is now.

The foundation gives out five percent of its holdings each year, based on an average of the last few years’ value in the holdings. That means that in a few years, the foundation will be giving out from $8 to $10 million per year. That means individual gifts can balloon in size.

“When you go from a $50,000 gift to maybe a million or more type of gift (at one time), obviously you’ve got to be nervous about it. Nervous doesn’t mean it’s bad, nervous in the sense of we want to be responsive, we want to be sure it’s put to good use to help the community.”

At the luncheon, Smith pointed out that going from the neighborhood of $500,000 in total grants a year to $8 million in just a few years is huge. “That’s a lot of coin, and it’s going to help our community, for sure.”

The last year has been an intense one for the foundation. Smith said, “It wasn’t an easy task when you’re used to analyzing a grant of $10,000, and you need to talk about it for 45 minutes or an hour to figure out if it’s something worthy, and now you have to create a model that says we’re going to maybe just, if those come in maybe they just go in a pile and we start writing checks for those. We’ve got to start looking at the big ones. It’s a whole different mind set.”

McCown said they learned from other foundations, “the decisions you make can be divisive within a community if you’re not thoughtful about it.”

Ultimately, they want to focus on making a better community and inspiring generosity, but they don’t want to drive the community’s efforts. “We want to lead from behind,” McCown said.


Applications will come from non-profit or government agencies to the staff, who will guide them through the process.

From there, requests larger than $10,000 will go to one of three committees (“youth development,” “quality of place” and “responsive”) made up of seven to 10 members.

If a request is for more than $250,000, then it will go to a joint committee, the members of which will make the decision on anything between $250,000 and $1 million.

Anything larger goes to the foundation board for a final decision, McCown said.

When the staff, committees and board consider grant applications, McCown said they plan to look for:

Ÿ Transformative projects. “We want to see transformative work. We want to invest in transformative work.”

Ÿ Sustainable ideas, so “if we step away after a period of years, it doesn’t collapse.”

Ÿ Stakeholder support. “If a not-for-profit comes to us with an idea, we want to see their own constituents, their own stakeholders, their own community to have voted with their generosity that this is a priority, as opposed to us just paying for something.”

Ÿ Outcomes. “The strongest proposals we will consider in the future are those that we will actually be able to make an assessment of the impact, or return on that investment.” That doesn’t mean they won’t support new ideas, but they will look for ways to measure the impact.

“Grant proposals that are innovative, all other things being equal, will find greater favor than those that aren’t. We also said collaboration,” McCown said, so groups working together will be more likely to find support.


“Our goal is to actually change and transform this community as much as we can. Ten million isn’t going to make Elkhart County the land of milk and honey” each year, McCown said, but the foundation’s staff and board hope to have fewer lonely senior citizens and fewer kids dropping out of school in the long run.

One of the ways to do that is to help attract new industry in this area. McCown said, “We feel like our role is to create the ecosystem to make this a more attractive place to help attract those companies to relocate or to germinate,” and the more they focus on crisis intervention to the expense of other priorities, the more that helps sustain only a cheap labor pool in the area.

“We need to have some focus areas and priorities, however, we want to still be able to anticipate that there may be an idea out there that we haven’t yet identified that is worthy of consideration,” McCown said.

The model the board laid out is not set in stone, but it “is our best thinking at this point,” though they’ll look at it as they go along, McCown said. “This is generation one. This is our beta test of this and we’re going to learn something as we go.”

McCown said he wants to develop a method to track how the community is doing and how the foundation is impacting the community, and that it will be a broad community effort. “I feel that now that we’re in this broadened role, we should hold ourselves accountable,” McCown said.

Ultimately, the foundation board and staff members want to make “investments that we hope will change the landscape of Elkhart County in remarkably positive ways,” McCown said.


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