Stanford Swim is an investment manager. He is also a philanthropist. In his mind, those two roles are like two sides of a single coin.
The 34-year-old president of GFC Foundation in Orem, Utah, comes from a long line of investment managers—four generations, actually. His grandfather Dudley was successful during the Great Depression and formed a charitable foundation in 1941, the Arthur L. Swim Foundation (later renamed ALS), named after his father. When Dudley passed away in 1972, his family continued the foundation’s work. Eventually Gaylord and his wife, Laurie, established GFC Foundation in 1994 with further funds from his parents’ estate. (The Swim family folded ALS into GFC in 2006 to minimize overhead costs.) Gaylord passed away in 2005.
“GFC runs on Dudley’s assets and Dad’s ideas,” says Stan Swim, GFC’s president. “Gaylord was a student of American history and institutions and shared his father’s commitment to them. One of Dad’s most basic beliefs was that the nature of government depends on the virtue of the governed. In other words, he considered individual morality and virtue an absolute prerequisite for individual liberty to endure, because without them, the sphere of civil government would have to grow.”
This core belief has shaped the mission of GFC, which is an acronym for God, Family, and Country. Dudley himself never formalized a mission for ALS. “We’ve tried to be very faithful, though, to what his grantmaking history and written work reveal as being his intent,” says Swim. Based in part on that history, Gaylord formulated GFC’s mission statement, with input from his mother (Kay), wife (Laurie), and brother (Roger).
The foundation’s three primary objectives are “to bless the lives of God’s children by fostering faith in God and that faith’s practical application in daily life, to strengthen the natural family as the incubator and fundamental unit of the good society, and to defend and advance the cause of freedom under law as the framework under which the first two objectives can best be realized.”
It follows then that their three major areas of giving cover these objectives. The first—faith and education—includes projects that focus on private education, religious liberty, and “individual-enabling humanitarian projects.” The second area—family—“supports scholarship in natural family studies and promoting reform based on that research.” The third area—freedom—supports “what would generally be categorized as fiscally and socially conservative public policy goals.” In pursuit of these objectives, GFC made over $5.4 million worth of grants in 2007. A significant percentage of the funds were directed to the Church of Jesus Christ of Latter-day Saints, to which the Swim family belongs.
Tied into all these areas of giving is an investment strategy that GFC strives to apply in its giving. “We find that we fail in our grantmaking when we miss—or mistakenly ignore—deficiencies in the leadership or business models of the organizations we support,” says Swim. “We had one grantee that always seemed able to generate good publicity and community involvement, but continued to struggle operationally. We helped buy the grantee a building and have made other general operating gifts over the years, but to no real avail. This was painful to watch, because we love both the people and the material involved, but we finally closed the checkbook.”
Swim has found that strong leadership and an effective business model are the keys to the success of nonprofits. “Grantees may be not-for-profits, but if they define the expected ‘return on investment’ and pursue that ‘profit’ with business-like discipline, they are more likely to succeed. And a good business needs strong leadership. In some cases, we have helped nonprofits figure out what their ideal leader needs to be like, and then have helped them find that leader.”
A prime example is GFC’s experience with the American Heritage School. Founded in 1970 about 30 miles outside of Salt Lake City, the private K-10 (currently expanding to K-12) school aims to provide a strong academic curriculum, enhanced with principles of religion, liberty, morality, and patriotism.
“Some time back, the school was on the verge of bankruptcy,” says Stan Swim. “It took almost 10 years to turn it around, in part because we misjudged what the school needed in its leader. When we began talking to Grant Beckwith, he was a successful attorney on the partner track at Nixon Peabody in Washington, D.C. He had graduated from BYU Law School and held bachelor’s and master’s degrees in accounting and information systems from the Marriott School of Management. He had both a deep skill set and a heart for education, and he took a steep pay cut to be the school’s principal, which he’s been since 2005. This 35-year-old is an amazingly effective leader, and he is truly devoted to his students. He knows the first names and has the respect of each of the more than 500 students at the school.”
Looking at the 2005-06 school year, American Heritage’s eighth grade students had an average standardized test score in the 90th percentile, compared to 63rd percentile for the local public school district. In October 2008, American Heritage’s 10th graders scored higher than the national average in English, mathematics, reading, science, and composite scores. Meanwhile, the cost (tuition plus capital) per pupil at American Heritage was about $1,000 less than at the local public schools. “It was a conscious choice on GFC’s part to fund capital expansion of the school so that more families could attend,” explains Stan Swim. “Tuition does not carry our physical plant. It does fully cover operations.”
Another GFC success story is the Central Valley Medical Center. Gaylord Swim bought the hospital from the county in the 1980s when it was underserving its community and badly losing money. Gaylord identified a young, local businessman who still leads the center, and helped form an effective leadership team around him. “The hospital has grown from just a handful of beds to a couple dozen,” says Swim. “It is providing emergency services to a number of surrounding communities. It has developed particular skills for procedures needed in the community, including, for example, ultrasound. It hasn’t needed ongoing support from us for over a decade, though we occasionally help with capacity building and capital expansion.”
Among the other programs which GFC is particularly proud to support is the Sutherland Institute, founded by Gaylord in the mid-1990s. “Sutherland is a state-based think tank, focused essentially along the same lines as GFC, but operating specifically in the public policy arena,” explains Stan Swim. “It is somewhat unusual in the state think-tank community in its emphasis on social (family, religion) policy, but again, Dad viewed the social and fiscal frameworks as inseparable. Sutherland has matured a lot in the past half-dozen years or so, and is making a solid impact here in Utah. It has been one of GFC’s largest projects, both in terms of dollars and man-hours.”
Another is Enterprise Mentors International (EMI). Founded in 1990 by Menlo Smith, a colleague of Gaylord’s, along with several other businessmen, all of whom have humanitarian and business experience in developing countries, EMI assists families who struggle to attain self-sufficiency through small enterprises by providing microloans, counseling, training, mentoring, and character development. EMI has proven to be very efficient with grantmaker dollars, notes Swim, “putting literally 100 percent of it into their loan programs.”
GFC similarly admires and supports Mount Vernon, not just for its historical importance, but for its well-managed operations, too. “We support Mount Vernon primarily because of Washington’s importance to our country, and because it has chosen to actively teach that importance on the property—and anywhere else, whenever they get the chance,” says Swim. “We think the accurate and substantive teaching of our nation’s history is essential, and they are on the front line in that effort. We have also cultivated a relationship between Mount Vernon and American Heritage School, and the junior high students go there as part of a summer experience in U.S. history.”
In part because of the importance GFC places on family, the Swims have set up the foundation to operate in perpetuity. “It’s really both a statement and a challenge from our point of view,” says Swim. “The statement is that, given human nature, there will always be a need for the vigilant builder to defend our heritage of freedom for the generations that follow. The challenge is integral to the statement. As trustees, my family and I must learn how to be such builders, and we must prepare the next generation to be the same. My grandfather died at 66, never seeing a grandchild. My father died at 56, when his oldest grandchild was three. In spite of, or maybe because of, this thin physical link between paternal generations, our family is committed to the teaching and transmission of faith and values. Sunsetting a foundation dedicated to that transmission would be self-contradictory.”
GFC is truly a family foundation, and a young one at that. Nine of 14 board members are under the age of 35, and everyone brings different assets to the table. While Swim has investment expertise, his mother Laurie, in Swim’s estimation, “sizes up people wisely and has good street smarts.” The family members sometimes disagree, Swim admits, “and our quarterly meetings often feature spirited discussions, as I believe they should. But those discussions are about applications, not fundamentals, and that is why it works.” Laurie says, “As a mother, I am grateful to see not just all of my children, but also all of their spouses working together and so committed to our mission. It truly is a family effort.” Two of the board members are outside directors, with one of these outside directors serving as chairman. Family members receive no compensation other than expense reimbursements, and the two outside directors receive just a modest quarterly fee for their service.
“We are all conscious that we have a serious and special stewardship in operating GFC,” says Swim. “For the most part, we are a very young group, and we have more to learn than we know, especially if we expect to be successful in that stewardship. Participation with The Philanthropy Roundtable brings us into regular discussion with wonderfully committed and serious people who are kind enough to share their experiences with us. Those talks spill over into our conversations with each other as we work on projects and problems throughout the year.”
Swim hopes GFC will continue to grow in its ability to effect positive change through their investments and the people they serve, but, as he repeatedly stresses, “We are still—and we hope we always will be—learning.”
Michael Leaser is an associate editor at the Family Research Council and former managing editor of Philanthropy.