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					CATALYSTS: A weekly series on what's driving growth in difficult times: COMMUNITY BUILDING

From the foundation up
All across Canada, groups work behind the scenes to help create jobs, finance social
programs and improve local economies


November 28, 2008

Ronald Vanden Pol always has a warm smile for the retired farmer who comes to visit the Ellis Bird
Farm near Red Deer, Alta., every summer.

The 23-year-old is working on a teaching degree at King's University College in Edmonton and for the
past two summers has worked at the non-profit bird sanctuary and working farm, guiding school groups
and earning badly needed cash for his education. Part of his salary comes from a $95,000 fund that the
elderly man, who asked to remain anonymous, created within the Red Deer & District Community
Foundation about four years ago.

"I always give him a personal tour every time he comes by the Bird Farm," Mr. Vanden Pol says, adding:
"This is so much more than a summer job for me. I could make much more somewhere else, but the
experience I get from the kids while working there is so important to me."

His summer job is one of more than 17,000 programs funded every year by Canada's 165 community
foundations. Last year these groups handed out $176-million in grants, funding everything from women's
shelters and educational programs to bus passes for new immigrants in Vancouver, picnic tables in Deer
Island Point Park in New Brunswick, and supplies for a bagpipe band in Saskatoon.

Community foundations are among the largest charitable organizations in Canada, holding nearly $3-
billion in total assets, but they don't get the same kind of attention as other big charities such as the
United Way or the Heart and Stroke Foundation.

"We aren't as well-known," says Faye Wightman, president and chief executive officer of the Vancouver
Foundation, the largest community foundation in Canada with $620-million in assets. "I think part of that
is because we actually support the charities that are out there doing the work," she says. "We're not in the
business of doing the work itself."

While other charities support specific causes, such as social services or cures for diseases, community
foundations take a wider view, and play a wider economic role, by backing a variety of organizations
with grants ranging from as little as $200 to more than $3-million.

"Community foundations have never said, 'We are only funding human services, or we're only funding
the arts or we're only concerned about the environment,' " says Monica Patton, CEO of Community
Foundations of Canada, an umbrella organization. "They had the vision to say, 'If we really are talking
about community and trying to figure out how to benefit community, then we need to pay attention to all
of these things.' "

The vision dates back nearly 100 years to when a Cleveland banker named Frederick Goff realized that
many of the trust funds his bank managed were supporting out-of-date causes. Mr. Goff proposed
creating a community trust fund to which wealthy people could make donations and have confidence the
money would be managed in the best interests of future generations. In 1914 he helped create the
Cleveland Foundation.

Mr. Goff's idea spread across the United States and into Canada. In 1921 William Alloway, another
banker, started the Winnipeg Foundation which received its first donation - $15 stuffed into an envelope
- a couple of years later. Today there are 1,441 community foundations in more than 50 countries.

While no two foundations operate the same way - some in Canada have been enshrined in provincial
legislation - they all follow the same general principles. Donors establish funds inside the foundation and
specify how they want the money used; the organization invests the assets and uses the proceeds to make
grants to other charities based the donors' wishes or the organization's overall objectives.

For example, the Winnipeg Foundation has about 2,000 separate funds, about half of which are for
specific causes, such as scholarships. Other funds are "undesignated" or "field of interest," meaning the
donors leave it up to the foundation's board to decide on grants.

Last year the Winnipeg Foundation made $19.2-million worth of grants, about $11-million of which was
largely discretionary. Some of its largest grants come from a $100-million fund set up in 2001 by the
Moffat family, after it sold broadcaster Moffat Communications Ltd.

Foundation officials meet with the Moffat family about four times a year and make suggestions as to
which causes to fund. The family approves about 75 grants each quarter and so far their fund has doled
out $25-million.

"We were very much encouraged [by the Moffats] to become more pro-active," says Richard Frost, CEO
of the Winnipeg Foundation.

Community foundations have faced tough competition in recent years - mainly from banks and financial
institutions who see philanthropy as a growth area for their wealth management businesses.

Most of Canada's major banks have set up "donor-advised funds" based largely on the community
foundation model. Clients open an account inside a charitable foundation set up by the bank; they
receive a tax receipt for donations and have a say in how their contributions are granted by the bank's
foundation. The banks have an advantage because they can tap into their client base for prospective
donors and can usually manage their foundation's assets for a fraction of what it costs community

The slowing economy and falling stock markets have also taken their toll on community foundations
(and every other charity), slashing investment returns and cutting donations. Last week, the Community
Foundation of Ottawa suspended all grants for 2009 citing poor returns in the financial markets. Other
foundations say they expect to cut grants over the next few years.
In response, many community foundations are reinventing themselves and advertising their strengths -
both their national network and deep knowledge of the needs of individual cities and regions.

The Winnipeg Foundation is running newspaper and television ads, promoting its community work and
noting that in tough times its grants improve lives. It has also created a U.S. operation to permit
Americans to make donations and receive a U.S. tax receipt.

The Toronto Community Foundation, meanwhile, is trying to re-brand itself while the Vancouver
Foundation has launched a magazine to profile some of the charities it supports. Several foundations also
participate in "Vital Signs," an annual campaign to publicize the economic and social needs of their

Many have also been able to expand their work through corporate and government partnerships.
Benjamin Moore & Co. Ltd., for example, uses the Community Foundations of Canada to help distribute
free paint and $100,000 a year in grants to local community projects.

And the B.C. government has tapped into the Vancouver Foundation to help distribute $40-million in
grants to disabled people who want to renovate their homes. In Hamilton, the local community
foundation runs a home-ownership program that offers grants to people who manage to save $100 a
month for a year in an account set up for a down payment.

Last year, 16 community foundations got an unexpected boost by sharing $190,000 from a class-action
lawsuit involving allegations of price fixing in the chemical industry. The groups had nothing to do with
the suit, but foundations have become a novel way for courts to distribute settlements in cases where the
potential claimants are too numerous. Last year's case involved chemicals used in plastic products and
tires, and the settlement would have amounted to about four cents for every potential claimant. Instead,
the judge directed part of it to community foundations, which gave the money to dozens of local charities
across Canada.

"It was a real pleasant surprise," says Trent Costello, manager of a transportation service in
Charlottetown for

elderly and disabled people, known as Pat and the Elephant. The group received $2,363 from the
settlement, which helped keep its six wheelchair-friendly vans on the road.

Some foundations are becoming conduits for those who want to help specific charities, as happened with
the Red Deer foundation and the Ellis Bird Farm.

For example, when a home-heating program run by the Salvation Army in PEI ran out of cash, a former
islander who lives in the United States gave the PEI Community Foundation $10,000 with instructions to
pass it along to the Salvation Army.

"We find ourselves becoming a delivery vehicle for people like that," says John Robinson, a director of
the PEI foundation. "It seems to be growing."

The Robinson family, who have run an agri-business in Augustine Cove for nearly 200 years, is among
the largest contributors to the PEI foundation, and sees it as a key player in the island economy.
"The foundation was attractive to us because it is so aware of the existing needs," Mr. Robinson says.
"And because it is there in perpetuity, and would be aware of new needs as they came along."


By the Numbers


Total assets of community foundations in Canada.


Total gifts received by Canada's community foundations in 2007, up 28 per cent from 2006.


Total grants made in 2007.


Number of community foundations worldwide in 2007, up 21 per cent in three years.


Number of countries that have a community foundation, including Russia, Egypt, Israel, Kenya,
Tanzania, India, Japan.


Number of community foundations in the United States.


Number in Germany, surpassing Canada (165) as the country with the second-largest number of


Date that the Cleveland Foundation was established as the world's first community foundation.


The Winnipeg Foundation started, the first in Canada.

Largest gift to a Canadian community foundation, made to the Winnipeg Foundation in 2001 by the
Moffat family.

Source: Worldwide Initiatives for Grantmaker Support



For decades, Winnipeg's Centennial neighbourhood was one of the most derelict in the city.

The 10-square block area was lined with abandoned houses and the average family income was less than
half the city average.

"This little neighbourhood basically was getting overlooked," says Richard Frost, chief executive officer
of the Winnipeg Foundation, Canada's oldest community foundation.

In 2003, the foundation decided to target the downtown neighbourhood for a special five-year project.
Nearly $3-million was committed for projects ranging from educational programs at a local school to
home renovation efforts, community organization and crime prevention.

The foundation managed to leverage $10-million in additional financing from other organizations,
including the provincial and federal governments.

The result was 100 new housing units; extensive housing renovations, including heating and plumbing
repairs; the creation of a community improvement association and a massive cleanup of abandoned

There are also after-school programs for children, literacy courses for adults and more involvement from
local residents who identify priorities. Local hiring and internships also contributed to employment in the
area. While the program officially ended earlier this year, Mr. Frost says it was structured in a way to
make sure that once its funding ran out the neighbourhood would not regress.

"A lot of the [programs] that we levered in were things that will continue," he says. "That was a very
major issue from the very beginning. We didn't want to do this - invest all this money, get all this sort of
partnerships in place - and do it in a way that it was just going to disappear."

In fact, the project became a model for other urban renewal efforts and the foundation is now working on
programs in other parts of Winnipeg.

Paul Waldie
National snapshot

Here's a look at Canada's 10 largest community foundations, based on 2007 year-end assets.

Organization                                    Total assets ($million)
The Kitchener and Waterloo Community Foundation $47.20
Foundation of Greater Montreal                  $87.30
Community Foundation of Ottawa                  $93.00
Hamilton Community Foundation                   $120.50
Victoria Foundation                             $141.90
Toronto Community Foundation                    $221.90
Edmonton Community Foundation                   $256.10
The Calgary Foundation                          $326.60
The Winnipeg Foundation                         $443.70
Vancouver Foundation                            $748.60


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