CommunityCare, NWACF Give Donors, Area Strong Foundation

The Northwest Arkansas Community Foundation’s $4 million in endowed funds could grow to match the $120 million now endowed by the CommunityCare Foundation Inc., if the philanthropic idea spreads the way it’s envisioned.

A lot of money still separates the two organizations, and their missions are unique, but they do share a lot. Their names are often confused because they share the same six-member staff and operate from the same offices.

Connie Hendrix-Kral, director of donor relations for both foundations, said the NWACF is “a vehicle for philanthropic efforts,” while CommunityCare is an endowed fund providing grants from a specific philanthropic effort.

CommunityCare was formed in 1998 when Northwest Health System privatized. The $140 million paid by Quorum Health for the nonprofit hospital had to be converted to another nonprofit.

The money was invested, the foundation was formed and grant rounds began in 2000.

It has provided $11.1 million in grants for local nonprofit agencies and projects in the first two and a half years.

“One of the best things that’s happened is starting NWACF and giving everyone a chance to be a donor,” said Suzanne Ward, executive director of both NWACF and CommunityCare.

Without the formation of the grant-giving organization, NWACF may never have been broadened to become a philanthropic vehicle for the entire community, she said.

“We expect the Community Foundation to be as big as CommunityCare eventually,” Ward said.

Kansas City’s community foundation has more than $600 million in endowed funds, and Tulsa’s tops $100 million, she noted.

The NWACF has 47 different funds under its umbrella, including CommunityCare. It was actually formed in 1994 by the Bentonville-Bella Vista Chamber of Commerce as a vehicle for funding a construction project. The NWACF and its 501(c)(3) status were revived and moved to Springdale in 1999 to become a true community foundation.

Gene Groseclos, chairman of the board of directors for the NWACF, believes “it’s just a matter of time” before NWACF’s endowed funds equal CommunityCare’s.

“Really I see no end to that growth,” Groseclos said. “We fill a niche in providing a level of expertise to bring private money to bear on the needs of the community.”

Northwest Arkansas’ environment of increasing community needs and fewer public dollars makes philanthropic efforts that much more important, he said. NWACF provides a way to “enhance the community” by contributing to it with the assistance of a staff that has a lot of experience dealing with nonprofit source providers.

“Our role is to maximize the impact of those private dollars to best help the community,” Groseclos said.

By “community,” Groseclos said he’s referring to the Northwest Arkansas region.

Becoming Endowed

Through the NWACF, individuals can set up endowed funds of their own, or they can invest money in co-mingled funds, Hendrix-Kral said.

Either way, the donor benefits from the staff support of the NWACF. The staff provides research about the community’s needs and handles all the paperwork for the endowment funds.

“It’s part of our mission,” Hendrix-Kral said.

With philanthropic efforts through a community foundation rather than a private foundation, the giver avoids legal complexities, administrative burdens and compliance requirements.

Hendrix-Kral is also quick to point out the tax advantages of giving through a community foundation. The 2 percent excise tax and the mandatory distribution rate of 5 percent for private foundations don’t apply to funds in a community foundation, in addition to other tax advantages.

Through a donor-advised fund set up under the NWACF, the donor can review and recommend grants, while the foundation’s staff handles the distributions, tax statements and annual audits.

“There’s certainly a great deal of wealth in Northwest Arkansas, and it’s time for a community foundation,” Hendrix-Kral said. “It’s a good neutral vehicle for philanthropy.”

NWACF also is working to strengthen area nonprofit groups with more than money. The foundation offers management courses for nonprofits. The courses have been well attended, and Ward said that’s a sign of the strength of nonprofits in the area.

Variety of Funds Offered

The foundation offers a variety of funds for endowment:

n Donor-advised funds for donors who want to be actively involved in grant recommendations.

n The Horizon Society fund is a mid-level endowment where funds are pooled and investments can start for as little as $600. Ward called it a “sort of a mutual fund of philanthropy.”

n Agency endowment funds that allow NWACF to assist nonprofit organizations with permanent endowments to hold long-term investments.

n Pass-through funds that simply take advantage of the financial management skills of the foundation.

n Scholarships to provide financial assistance to a specific college or for students from an identified organization or area.

n Unrestricted endowment funds are for donors who want to provide “flexible community capital” using the interest income from an endowment.

n Supporting organization funds share the staff and offices of the foundation but operate with a separate board of directors.

CommunityCare

The CommunityCare Foundation operates as a supporting organization fund and actually provides the administrative funding that pays for the six-member staff it shares with NWACF.

“Community Foundation is the umbrella organization, and CommunityCare provides grants,” Ward explained.

Walter Turnbow, chairman of CommunityCare’s board of directors, said he’s proud to be associated with the efforts of the organization, especially its grants for education, health and social issues.

“I have been extremely pleased with the funds that have been granted in education and health,” Turnbow said. “They have been a tremendous asset to the community, and I’m proud we still have an excellent hospital in both Springdale and Bentonville.”

Of the 198 grants awarded to date by CommunityCare, the majority of funding — $4.7 million — has gone to human services programs and agencies. Educational grants totaled $3.1 million. Nearly $2 million have gone to health-related requests. Public safety and the arts are the other two types of grants awarded by CommunityCare, and each has received less than $1 million in funding.

The Harvey and Bernice Jones Center for Families has benefited from CommunityCare money. It’s received $1.7 million in grants for operational costs from the foundation over three years.

Mary McKinney, Jones Center executive director, said the CommunityCare gift of operating funds for the center is “really a gift to the community.”

“With their money we’re able to enhance what we have and what we offer our guests,” she said.

The Jones Center and CommunityCare are in the same business to “improve our community and the lives of the people who live here,” McKinney said.

The child care center at West Campus Technical School in Fayetteville is also appreciative of CommunityCare dollars. The center received $48,150 this year for child care scholarships and operating expenses.

Beth Higgs, director of the center, said the money has helped a number of young mothers pay for child care and continue their education.

The center is licensed to care for 46 infants and toddlers, and students of the child care curriculum provide the care. Most of the children at the center are children of high school and college students.