CommunityCare Utilizes Means to Build Assets

Foundation offers new managment services to potential philanthropists in local region

The creation of the $140 million CommunityCare Foundation as the state’s second-largest private foundation is having the unlikely effect of attracting more money to the foundation.

Pat Lile, an expert on the subject, says that is good news for philanthropy in general as well as for the Northwest Arkansas region that will benefit from CommunityCare.

“In the business of philanthropy, this is huge news,” Lile says about the formation of CommunityCare. Lile is president and CEO of Arkansas Community Foundation, a statewide community foundation whose mission is to build philanthropy throughout Arkansas.

CommunityCare, of course, is the foundation created last year by the sale of Northwest Health System to Quorum Health Group. The sale closed Nov. 30, at which time CommunityCare was formed. The final details on accounts payable and receivable were closed out Aug. 27, but CommunityCare has had the bulk of its money — about $140 million — for months.

The money has been invested with Northwest Bank of Minneapolis as the foundation’s primary money manager. The foundation’s staff, which includes Hugh Means as president and Suzanne Ward as executive director, and 13-member board have turned their attention now to spending the money.

Or, more accurately, spending the $5 million to $7 million the foundation expects to award annually in grants.

But even while the preliminary details were still being settled, potential donors were approaching Means and the foundation about making additional gifts.

“We’re finding ourselves, without even advertising, already in the business” of helping people give money, Means says.

It’s not that the foundation necessarily needs more money. But, as a community foundation, CommunityCare can ensure that gifts are used in the manner donors intend, taking care of the legal and financial details. The donors, then, free themselves of the responsibility of managing their money but get the tax benefits such gifts earn.

“It’s really us being a vehicle for other people to put money into the community and not so much that we need the money,” says Ward. “We’ve had a number of people come to us and say, ‘I want funds to go into the community but I don’t want to manage it’ or ‘I want to put something in my will that will support nonprofit [causes].’ They can put their money here, and it helps them get a tax deduction.”

Lile says it will be interesting to watch the growth of CommunityCare, whose assets make it second only to the Walton Family Foundation among other Arkansas private foundations.

But, she says, it’s not necessarily unusual for large nonprofits to attract additional gifts.

“Lyon [College] and Hendrix [College] can tell you stories like that. Success breeds success,” Lile says.

Some otherwise would-be donors may be deterred when there’s already a large endowment in place, Lile says. But she believes there are many more cases in which large donations actually encourage more gifts.

And in a state as foundation-poor as Arkansas, that’s good.

“That’s one reason we rejoice when more foundations are created. We need to build awareness of the need for philanthropic assets,” Lile says.

Because CommunityCare is technically a community foundation rather than a private foundation, Lile says, it has no legal obligation to pay out 5 percent of its earnings annually.

Still, that’s the intention of CommunityCare’s board. Ward says grants will be used to help “support the health and welfare of the community.”

“We have to define what that means now,” she says. “We really want it to be broad in our definition of what a healthy community is.”

It might include ensuring there’s prenatal care for all or that elderly people have means to stay independent as long as possible. Or it might mean supporting the arts and education, Ward says.

CommunityCare expects to take a regional approach to its work, but, Means says, the board is sensitive to the fact that the foundation money came from the sale of hospitals in Springdale and Bentonville.

“Springdale and Bentonville will always be top priorities for us,” Ward says. “They won’t be exclusive priorities because people came to the hospitals from all over, including from Madison and Carroll counties.”

To a suggestion that CommunityCare might help unify the region, Means has just one comment: “That would be one of the finest things this foundation could do.”

CommunityCare plans to announce a series of meeting in which it will solicit public input concerning its definition of a healthy community.

Guidelines for grants will be issued before the year ends. CommunityCare expects to make its first grants during the first quarter of 2000.

CommunityCare currently has a staff of six people, including Means and Ward, but most foundations of its size have more than a dozen people on staff.

“We expect we’ll get bigger,” Ward says. “We’re not making grants yet. I expect it’ll take us a couple of years to get fully staffed.”