How to Be a Loyal Local Giver

Advice from American foundations on staying close to home

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  • Philanthropy Magazine

You may not have heard of Moorhead, Minnesota, but its tagline is “Your Hometown.” You can have morning coffee with the mayor, and “take a break from the political elections” to vote for the water tower as “tank of the year.” Home to about 42,000 people, it is the largest city in northwest Minnesota. Its oldest cemetery, started in 1875, is aptly called the “Prairie Home Cemetery.” In 2015 the website NerdWallet named it “#1 Best Small City in America.”

Fargo, North Dakota, its better known neighbor, lies just across the Red River. Not many people live close to the banks on the Moorhead side—the river is known to flood, and it takes the hard labor of sandbagging, and a little bit of luck, to avoid catastrophe. When the city offered voluntary buyouts to neighbors who wanted to move out of the flood plain, all but one citizen took the deal. That one citizen was Lloyd Paulson, 85 at the time, who told CNN “I want to go feet-first out of here.” With the help of his family and friends he assembled 30,000 sandbags one season to protect his home. Dubbed the “last man standing” in his neighborhood, CNN asked him how he felt about the moniker. I “didn’t do this for publicity,” he said. “I just want to enjoy my life, and I can do that here.”

Paulson wasn’t just known for the location of his house. He was a leading philanthropist, who along with his wife Beverly gave millions to churches and nonprofits in Minnesota and the Dakotas. Millions he and Beverly acquired through years of frugality and his employment as an executive at Scheels, a regional sporting goods retailer. In addition to giving money, Paulson volunteered his time and raised money from others—he reached almost 48 years as a member of the Kiwanis Club, and could be found at Moorhead’s Dorothy Day Food Pantry, or in the Lloyd and Beverly Paulson Family Chapel at Lutheran Church of the Good Shepherd. When he passed away in 2018, a memorial service was held in his original hometown of Parkers Prairie, Minnesota, population 1,000, where Paulson had donated money to build a community center and a town pool, and a new kitchen and handicapped entrance for his old church.

While Paulson went above and beyond in savings and generosity, his affinity for local causes is the norm. According to data from Foundation Center and Grantmakers of Western Pennsylvania, about two thirds of private foundation grants in any given locale go toward regional beneficiaries. There’s a marked preference for gifts where a donor can see with his or her own eyes the effects, good and bad.

But local giving comes with its own set of challenges. To get a sense of what it takes to be a loyal, local funder, I spoke with friends and members of The Philanthropy Roundtable, asking for advice. And here’s a taste of what I heard.

Constraints can lead to creativity

The Donnell-Kay Foundation in Denver, Colorado, recently reached $1 million in giving annually, with smaller amounts in years past. But the foundation’s milestones in education reform indicate that its dollars have gone a very long way. Chalkbeat Colorado, an online news site dedicated to covering education reform? Started and spun off by Donnell-Kay. A new office in Denver Public Schools dedicated to school reform and innovation? Based off a report by Donnell-Kay. A website that enables parents to view school performance data from across the state? Supported by Donnell-Kay. Since 2000 the foundation has been involved in public-policy work, facilities solutions, simplifying enrollment mechanisms, teacher housing. The list is extensive. How does this work? Executive director Tony Lewis cites his favorite quote from Matt Candler of 4.0 Schools: “If you don’t have constraints, you don’t think creatively.”

Donnell-Kay was founded in 1965 with a trust from the Kay family. For the next several decades it engaged in quiet, traditional giving. But in 2000, when Lewis came aboard, the decision was made to focus on education reform, with a flurry of ensuing activity. Lewis describes the early days of this new strategy in terms of building an ecosystem—identifying what was missing in the panoply of organizations that lead to improved schools. One of the first ideas was to engage the business community, so the foundation started Colorado Succeeds, a network of local leaders and companies supporting innovation in area schools. Then the idea came for a news outlet covering education reform. That’s Chalkbeat. And the ideas kept flowing. The foundation made a point of regular meetings with other funders and nonprofit leaders to find out what was lacking in the overall picture and how to meet those needs.

One recent initiative identifies social entrepreneurs and gives them a $5,000 or $10,000 grant to develop their ideas. Some of these leaders have gone on to establish larger organizations that solicit much larger grants (from other funders). “Our role as a local funder is to recognize, very early, good entrepreneurs and good ideas, and to take the risk of giving them some working capital to blow their idea out and turn it into something,” says Lewis. He adds that it’s “something national funders can almost never do because they’re not close enough and local enough to know what’s a really good idea for this context.” Some years the foundation finds two or three entrepreneurs to fund. Other years it can be up to 12. In addition to funding individuals, the foundation is involved in Moonshot edVentures, an incubator that bunches these leaders in cohorts for training and development.

While launching these projects and leaders, Donnell-Kay spends half of its budget every year on its ten staff—an overhead ratio typically discouraged in the sector. Lewis explains that in order to propel new ideas and ventures, you need staff focused on finding out-of-the-box solutions, and “you can’t do that by sitting at your desk waiting for proposals to come in.” Having a staff is critical to combing the community for outstanding ideas and people.

Own your voice

Survey the country and you’ll be hard pressed to find more activity and energy in rural education than Boise, Idaho. Last October, the U.S. Department of Education awarded a $17.1 million grant to a Boise-based nonprofit school incubator, Bluum, to increase the number of high-quality school seats in Idaho by 8,200 in the next five years. Meanwhile One Stone, a private, tuition-free high school in Boise, is challenging basic assumptions of school itself—students are steeped in design thinking, develop their own personalized learning plans, and even in governance matters, lead the school.

This flurry of development in Idaho isn’t a coincidence. It’s all part of the energy and mission of the J. A. and Kathryn Albertson Foundation, started in 1966 by Joe and Kathryn Albertson. In 1939, Joe had used $5,000 in savings and a $7,500 loan from a family member to start what is now known as the Albertsons grocery store chain. And now Joe and Kathryn’s great-granddaughter, Jamie Jo Scott, leads the foundation. Scott explains that Joe and Kathryn started this foundation in Boise because that’s where they lived—Joe since he was ten, and Kathryn her whole life. They didn’t specify in the founding documents that the money had to go to Idaho, but the next generation decided to make that commitment. It’s “a smaller bullseye,” says Scott. “It was easy for us because we love where we live.”

When the foundation endowment grew sizably in the 1990s the family doubled down on identifying strong leaders in Idaho and figuring out how to support them. The foundation has also gone to work persuading nonprofit service providers around the country to consider opening an in-state branch. The most striking success is a veterans’ initiative called Mission43 (Idaho is the 43rd state in the Union), where Albertson convinced Team Red, White and Blue, Team Rubicon, Hire Heroes USA, and Guild Education to develop strategic programming in Idaho, for a while sharing an office with the foundation.

The Albertson Foundation, with $670 million in assets, is the state’s largest grantmaker, and with that comes a special voice and responsibility. It has an “ability to take a stance on controversial issues,” says Scott. With a different structure “we would not be able to put out some of the tough messages that we feel are really important.” What are those tough messages in Idaho? For Albertson, it’s sounding the alarm about a leadership void at the state level, and keeping education and economics top of mind in the community. “We have high expectations of Idaho,” says Scott. To focus on its own strategy, it does not take unsolicited grant requests. In 2018 Albertson gave away $33 million.

Partners on the ground

When Julie and Spencer Penrose founded El Pomar Foundation in 1937, its mission was “to enhance, encourage, and promote the current and future well-being of the people of Colorado.” But in 2003, the trustees of the foundation realized something uncomfortable—large parts of the state weren’t receiving many of its grants. Its gifts were clustered in the Front Range, primarily in Denver and in Colorado Springs, where the foundation is located. If the foundation wanted to serve the wider state, it needed a new strategy that reached rural areas.

So the foundation brought on a staff member, Cathy Robbins, to develop a new regional partnerships program. Calling the existing contacts of the foundation, she went on a hunt to identify the local leaders in a region, those with influence in the community. “You call one person and say, ‘Hey, we’re thinking about putting together a group of people to help us understand the region, who do you think we should be talking to?’” After many a phone call, she says, a good thing happens: you get no new names, just ones you have heard before. “When you’re not getting any new names you know you have the people.” It was these people who were recruited to create 11 regional councils of about seven members each.

Once assembled, each council is tasked to explore how it would grant $200,000 annually in its own region, and then makes recommendations to the El Pomar trustees. El Pomar doesn’t come into the neighborhood saying what it will and will not fund. “It’s the local people who know who gets it done,” says Robbins.

Over the years, each region has recommended different areas of focus. The North has focused on behavioral health, funding four full-time mental health clinicians to work across eight schools. The San Luis Valley is supporting six students pursuing nurse practitioner degrees. In the Northwest, the council has focused on four higher-education providers, aiming to improve workforce readiness and increase college access.

One unanticipated benefit of the regional councils is a sounding board for other grant requests that come to El Pomar. Robbins describes the experience of getting new proposals from organizations the foundation didn’t have a prior relationship with. The staff and trustees found that they actually had an army of eyes and ears in rural Colorado who could not only recommend grants, but speak truthfully about other requests coming from their region. 

With heart

Being a loyal local donor takes work. But it also takes heart. When Boston philanthropist Carolyn Lynch passed away in 2015, her longtime friend Jack Connors said that “Carolyn led by example and gave so much of her time, talent, and treasure to create opportunities for the least fortunate among us. It’s hard not to love someone like that, and she was admired for her generosity, her intelligence, and her wonderful heart.” Carolyn’s father was a principal, and she used she and her husband’s family foundation and individual gifts to create Lynch Leadership Academy, a principal training and development program for public, charter, and parochial school leaders. Since its founding in 2011, the academy has trained 171 principal fellows from 113 schools, affecting 56,000 students in the Boston area.

Part of the program’s success stems from the Lynch Foundation’s commitment to education in Boston over a long period of time. It’s incredibly rare to see a principal-training initiative that brings together teachers from public, charter, and Catholic schools. But because the foundation had years of experience and relationships in each education culture, the academy could bloom. (Also unique was the foundation’s decision to house the program inside a business school instead of an education college, emphasizing the practical know-how training provided to principals.)

That’s near the core of what makes a local donor great. Deep knowledge of a community, and deep relationships.