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A Portfolio for Meeting Basic Needs
  • Choosing Recipients
  • Allocating Limited Capital

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    A newsletter of the Napa Valley Community Foundation
    April 2010

    How do we decide which projects to support? And at what dollar level?

    These are two questions we routinely ask ourselves at the Community Foundation.

    Very often, the same questions come up for the donors with whom we work--whether they are giving through a fund at the Community Foundation or making distributions independently from their checkbooks or family foundations.

    Since December of 2008, we have distributed nearly $800,000 to a core group of local charities that meet the basic needs of Napa County's struggling families. The goal: to rapidly bolster the social safety net at a time of unprecedented need.

    In this edition of Community Link, we'll look under the hood of our Safety Net Grants program, to understand:

    • how we chose our grant recipients; and
    • how we allocated limited dollars to each.
    In putting together our Safety Net Grants portfolio, we tried to think critically about how the component pieces--various nonprofit programs--relate to one another. Readers who are familiar with the vernacular of the investment world may hear familiar echoes in this approach.

    I hope you enjoy reading more below, and look forward to answering any questions you may have.

    If you'd like to read past issues of the newsletter, go to http://www.napavalleycf.org/index.php? page_id=169.

    Terence Mulligan
    President



    safetynetsectorpie Choosing Recipients
    Start with a clear goal and a limited scope

    When the economy fell into a deep recession two years ago, we wanted to do something to help. In growing numbers, local families needed assistance with food, shelter and emergency support. At the same time, nonprofits serving these families were struggling financially.

    What constructive role could the Community Foundation play?

    To answer this question, we tried to be clear, from the start, about what we wanted to accomplish. For example, did we want to focus only on food? This would have been one way to reach a lot of people with fairly limited dollars, since feeding programs are generally less expensive to operate than other social service programs.

    For instance, the cost of an hour of mental health therapy ranges from $60 to $100 in Napa County, even in a nonprofit setting where the end-user may not actually be presented with an invoice. This is enough to purchase and deliver up to 20 hot meals through the Senior Meals on Wheels program. Other feeding programs, such as The Table, rely on donated product and volunteer labor, and can therefore stretch $100 to assist even more people.

    We decided to expand the scope of our efforts beyond food for two reasons. First, from surveying nonprofits that work closely with vulnerable families, we knew that other important services were in very high demand. Second, with the grant dollars we had available, we could have filled known budget gaps in the food sector, and covered the cost of increased demand for at least three years, with money left over, standing idle.

    While our grant budget was too large to work only on food, we didn't have sufficient resources to fund all the nonprofit agencies we would've liked to at a meaningful level. For this reason, we developed a fairly narrow definition of the social safety net for Napa County. Our intention was to provide timely and significant grant support in the critical areas identified by our nonprofit partners: food, shelter and emergency support to families.

    We also wanted to be prevention-focused where possible, and to concentrate our dollars on programs serving beleaguered heads-of-household, in hopes that by offering aid to them, whole families might do better. Here are the things we chose to include in our Safety Net Grants portfolio:

    • Food programs, a core area of need where relatively small dollars can go a long way.
    • Family Resource Centers (FRCs), which work with more than 2,500 vulnerable families throughout the county, and serve as a gateway to services, public aid and emergency assistance. FRCs often help families on the brink of crises, and pull them back towards stability. This important function fit squarely with our desire to focus on prevention.
    • Housing programs that help individuals and families remain in their current living situation, such as foreclosure education and prevention programs for homeowners and legal services for renters.
    • Mental health services for adults. This may seem like an outlier, but the safety net organizations we spoke to helped us understand that mounting pressure on households (from lost income, lost jobs, troubled mortgages) translated into more depression, marital conflict and family violence.
    The pie chart above provides an illustration of our Safety Net Grants portfolio, by sector. Please note: percentage amounts are for the first three rounds of discretionary grant distributions made by the Community Foundation, totaling $559,250 through March 31, 2010. Additional grants have been made to safety net recipients from donor advised funds that we administer. Together, our discretionary grants and donor advised fund grants to safety net nonprofits exceed $800,000.


    nonprofitpie Allocating Limited Capital
    Look closely at budgets and clients served

    It is often easier to pick a number than to pick a strategy.

    Once we determined which sectors of the safety net we were going to work on, it wasn't difficult for us to identify key players in each sector, and settle on dollar amounts for recipient organizations.

    In a world of unlimited resources, you might look at the gap between the demand for services and the supply of dollars for each agency, and endeavor to fill it up.

    In the real world, we looked at the budget of each organization and the number of people they serve, and chose grant amounts accordingly. Our goal was to place more dollars with agencies that were helping more people. A guiding principal was to offer support to each organization that was meaningful, but also proportional. In most cases, our partners have received grants from us, in the last fifteen months, equivalent to 5 percent to 10 percent of their annual operating budgets.

    The pie chart above provides an illustration of our Safety Net Grants portfolio, by recipient organization. Once again, percentage amounts are for the first three rounds of discretionary grant distributions made by the Community Foundation, totaling $559,250 through March 31, 2010.

    If you were going to build an index fund for meeting basic human needs at a critical moment for our community, given the limitations noted above, we think you'd wind up with a portfolio that looks a lot like this one. Given the still-tenuous nature of the overall economy, and the blistering fiscal misery of the state of California, we suspect there might be a need for future investments to strengthen the safety net in Napa County, and would welcome your support in that regard.

    Contact the Community Foundation