In a guest column published in cleveland.com this week, retired Shaker Heights school teacher Paul Springstubb argued that the Cleveland Foundation could be doing considerably more to help the region thrive.
Citing analysis from CF Insights, which provides research and data for and about community foundations, Springstubb said that while the Cleveland Foundation is among the largest organizations of its kind in the country, in terms of total assets, it is near the bottom of the barrel in terms of its payout rate. The Cleveland Foundation awards grants every year totaling roughly five percent of its $2.3 billion total.
Of the 250 community foundations CF Insights surveyed in 2018, 19 had assets totaling $1 billion or more.
“Only one of those foundations had a distribution rate lower than Cleveland,” Springstubb wrote. “Sixteen of the 19 had a higher distribution rate. The average payout rate of the other 18 foundations with $1 billion-plus in assets was 9.9 percent; the median was 11 percent. Cleveland’s distribution rate was five percent. The consequence: Cleveland’s peers in assets grant tens of millions more per year.”
Springstubb mentioned the city of Cleveland’s child poverty rate — nearly 49 percent, the highest among big cities in the country — and the scourge of lead poisoning, which legislators and private sector leaders are currently scrambling to fund and said that these dire social circumstances demand an increase in funding from those with the capacity to spend.
“Has our community foundation been focused on growing assets,” Springstubb wondered, “at the expense of mission?”
According to the Cleveland Foundation, the answer is no. In a written statement, a spokesperson told Scene that Springstubb’s column failed to account for an important piece of their financial puzzle.
“When you look at the number of community foundations represented in this survey with $1 billion or more in assets, there are indeed 19 in this peer set,” the statement read. “However, what the survey does not clearly articulate are the payout implications when a community foundation has a significant amount of assets in donor-advised funds. Ultimately, this survey is comparing apples to oranges.”
The Cleveland Foundation, unlike many of the other foundations surveyed, has a relatively small percentage of its assets in these donor-advised funds — 11 percent. At some of the others, donor-advised funds make up 30 or even 40 percent of total assets. These foundations might be spending more rapidly or at a higher rate, the spokesperson suggested, because the donor directs the spending of those funds.
“Unlike endowments, not every donor-advised fund is designed to retain its value in perpetuity; some donors wish to spend down their funds within their lifetimes or in a specific time period. Because of the self-directed nature of donor-advised funds, a community foundation’s payout rate in any given year can fluctuate significantly.”
The Cleveland Foundation spokesperson wrote that their payout rate was comparable to the one other foundation surveyed which had a higher percentage of trust assets (non donor-advised funds).
Moreover, the Cleveland Foundation’s spending policy, as determined by its board of directors, has consistently remained at five percent for more than two decades, the spokesperson wrote, “despite market fluctuation through the years, including a severe recession.” Due to its “sound fiscal management,” the Cleveland Foundation has continued to distribute grants with local impact since its inception in 1914.
But while the Cleveland Foundation referred to its fiscal management as “sound,” Springstubb characterized it as “deeply conservative.” He called on the Foundation’s CEO, Ronn Richard, and the board of directors to increase its payout rate. He referenced the work of author and philanthropic consultant Bill Somerville, who has argued that a community foundation “might move beyond the annual pay-out provision of five percent in its grantmaking to 10 or even 15 percent and scarcely notice the difference.”
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This article appears in Aug 14-20, 2019.
Ronn Richards is turning it into his vanity organization. He needs to go back home or retire.
Put a local in charge.
Allard’s piece gives the Cleveland Foundation a space to respond to Springstrubb’s assertion that the Cleveland Foundation could be doing more to address poverty and lead poisoning. I don’t ascribe to same concern that Mr. Springstrubb has for poverty and lead poisoning. I think that both vague societal ills have become a perfect storm to conceal the machinations of what I call the cabal in Cleveland – the charlatans who outwardly pretend to care about social issues (housing, child welfare, schools, drugs) while, in reality, they mine these issues for federal and local monies. This is the latest round of grants to come out of the Cleveland Foundation–with my comments *:
Youth Performing Arts Programming:
$150,000 to Cleveland Classic Guitar Society to expand its youth arts mastery programming to reach 500 students in at least 10 locations in neighborhoods across Cleveland. Our grant will be used to support instructional staff and teaching artists, guitars and other equipment, curricula, meals for student participants, printing costs and professional memberships for the organization.
$10,450 to Childrens Museum of Cleveland to create a performing arts program where young children and families can learn, play their own music and work collaboratively to explore topics such as rhythm and pitch. The funding will also allow the museum to work with community partners to host a performance or workshop in the museums theater with a goal of conducting one performance each season.
Health & Human Services for Vulnerable Populations:
$199,500 to CHN Housing Partners to complete Emerald Alliance XI, the final permanent supportive housing facility in the Housing First Coalitions portfolio designed to end chronic homelessness. The facility will include 71 one-bedroom units for chronically homeless individuals with onsite wrap-around services to maximize their opportunity for housing stability.*************THIS IS SO WRONG–READ REALNEO -Google it.
$100,000 to Cleveland Rape Crisis Center (CRCC) to launch a coordinated care model that will engage and support survivors of human trafficking. In addition, CRCC will establish a Drop-In Center that will serve as a hub for all human trafficking services including trauma therapy sessions, justice system advocacy, support groups and more.
$15,000 to the Domestic Violence & Child Advocacy Center to support the Domestic Violence High Risk Team (DVHRT) initiative. This funding will allow DVHRT to partner with a community police department in Cuyahoga County to implement the evidence-based assessment tool Danger Assessment for Law Enforcement (DA-LE) to help identify individuals at the highest risk for violence.
Community Engagement
$200,000 to Global Cleveland to take a leadership role with the city, county and state Census Count Committees to reach hard-to-count immigrant populations and to convene immigrant-serving organizations to raise awareness about the Census. Our grant will also fund the creation of a dashboard to track the value of newcomers to our regional economy as well as planning for the 2nd Sister Cities Conference. ********************WHY? Shut it down. This is a payback position for Joe Cimperman
$25,000 to the Historic Warehouse District Development Corporation for the Lighthouse Park project. This project will create a public space amenity for downtown residents, employees and visitors to gather for recreation, socialization and relaxation while celebrating the Warehouse Districts significance to Clevelands history.
Educational & Professional Opportunities for People of All Ages
$84,250 to JumpStart, Inc. for the ongoing development and growth of the Core City: Cleveland Encore Mentoring Program. Our grant will allow the program to grow its mentoring pool, with a high percentage of African American and Latinx mentors. Our grant will also help Jumpstart evaluate the success of the program and increase the number of companies receiving support.
$119,000 in grants from the Sherman Johnson and Frances Battles Johnson Memorial Fund of the Cleveland Foundation to provide scholarships for 44 students who are residents of Lake or Geauga County in either their third or fourth year of medical school. The colleges receiving grants include Case Western Reserve University School of Medicine, Northeast Ohio Medical University, The Ohio State University, Ohio University Heritage College of Osteopathic Medicine, University of Cincinnati College of Medicine, University of Toledo College of Medicine and Wright State University Boonshoft School of Medicine.
when there’s money involved, there’s always people asking for bigger handouts. Until the cookie jar is empty, some people will never be happy