<< back | January 2003

Close to the Ground
The first foundation in Pittsburgh didn't have grand plans to change the world. Andrew Carnegie created the Carnegie Hero Fund Commission in 1904 because he "did not want heroes to suffer pecuniarily for their acts," explains Douglas R. Chambers, managing director. The fund's staff and board review some 900 incidents per year in which North American civilians risk their lives to save others, usually total strangers. They choose 100 heroes annually, each of whom gets a medal and a check for $3,500. Injured rescuers or the survivors of those who died in an act of heroism sometimes get monthly checks or scholarships to help offset their losses.

"The fact that people [save others] in extraordinary numbers is, to me, amazing," says Chambers.
The same might be said of the hundreds of modest-sized philanthropies that work in near-anonymity year after year. "It's not only the SUVs of philanthropy we should talk about," says Phil Hallen, president emeritus of the Maurice Falk Medical Fund, which is dedicated to combating racism. "It's easier for [smaller foundations] to get close to their grantees" -- and to the people whose lives they aim to improve.

The Staunton Farm Foundation, for instance, decided a few years ago to focus on rural mental health in 10 Southwestern Pennsylvania counties, says Joni S. Schwager, executive director. The rural mentally ill often have trouble getting care, transportation and community support, she says. So Schwager's foundation partnered with the Pennsylvania Elks' major project, which sends nurses to developmentally disabled people throughout the state, including 1,000 in the southwestern corner. Now the Elks have a regular funding stream, and the foundation has a way to reach people who might otherwise be alone in the world.

The Birmingham Foundation was born in 1996, when UPMC bought the nonprofit South Side Hospital. Federal law demands that when a nonprofit hospital is purchased, its assets have to continue to serve the community for which they were generated. So $17 million from the sale went to create a foundation dedicated to 14 South Pittsburgh neighborhoods and Mount Oliver. "The communities kind of had a win-win," says Birmingham Foundation executive director Mary Phan-Gruber. "They were able to maintain a community hospital and gain a foundation."

Because the Birmingham Foundation's territory is small, it has been able to cultivate a street sense others can't match. For instance, Phan-Gruber became aware of an annual health fair run by a few churches and Mercy Hospital. The Birmingham Foundation helped bring nine churches into the Hilltop Health Ministries Consortium, got the federal AmeriCorps youth volunteer program involved and expanded the coalition's role to include visits to shut-ins and outreach to troubled young adults.

Similarly, the Roy A. Hunt Foundation focuses much of its giving on Pittsburgh's East End, contributing to East Liberty Development Inc., the Friendship Development Association and the Pittsburgh Glass Center in Friendship. The Hunt family's roots are in Shadyside, says foundation president Torrence M. Hunt, and though many members have left the region, there's still a commitment.

"Family foundations, I feel, have a responsibility to support the community where the money was made," says Hunt.

The many foundations connected to the Scaife family include the independent Scaife Charitable Foundation, chaired by David Scaife, which gives around $4 million a year. Rather than spread that thinly, the foundation has focused on a few key projects, especially the Pittsburgh Institute for Neurodegenerative Diseases, says J. Nicholas Beldecos, executive director. The foundation made a multiyear, $5.4 million pledge to PIND, which brings together researchers studying Parkinson's, Alzheimer's and Lou Gehrig's diseases.

"These are diseases that take a heavy toll on victims, families and caregivers," he says. "There was a compelling case for this institute's ability to do something pioneering to fight these diseases."

The nascent Community Foundation of Greene County faces just as big a challenge -- boosting an economy that's caved in because of mining's decline. The foundation was officially created in late 2000, is still in the fundraising stage and expects to make its first grants next year. "The systemic change that's probably most pivotal to Greene County is reducing poverty," says Sally Cameron, chairman. "We'll have a rough road, but I think that what we do have is the benefit of community and the benefit of a small-town feel."

Cameron says the trick will be to encourage grantees to think like businesses. "I think nonprofits need to become more entrepreneurial. They need to become more sophisticated," she says. Enterprise philanthropy "is the way of the future."

It's also the hottest issue in philanthropy today and one that's likely to change the shape of giving in the region for years to come.

Balancing the Scales
It's November, and foundation leaders have gathered at the Renaissance Pittsburgh Hotel, this time for a conference called Family Matters: A Convening of Family Philanthropists. That may sound like an old-boy affair dominated by people whose names end in Roman numerals. But though everyone is impeccably dressed, the crowd is otherwise remarkably diverse -- black and white, male and female, teen to octogenarian.

Everyone here is looking for answers to the same question: How can modest-sized foundations continue to be effective at a time when the stock market's gyrations have left them with less to give? John Denny offers one answer. Denny, director of community relations for The Hillman Co., was a founding partner of Pittsburgh Social Venture Partners, which purports to bring the venture capital model to philanthropy.

"Partners" each give $4,000 a year to the fund, which then flows to "early-stage" charities. Denny says PSVP weeds out inappropriate grantees with a "deal filter," then makes carefully considered "investments" based on "objectives," injects the partners' "human capital," achieves a "social return on investment" and outlines a clear "exit strategy."

Most foundation heads don't sling business terms as relentlessly as Denny does. But there's no doubt that business principles are permeating foundations of all sizes.

"We're heavy on accountability," says Sylvia Fields, program director for the Eden Hall Foundation. "Accountability is making sure there are realistic goals made from the onset and that proposals are really rooted in community needs." Like many foundation heads, Fields is making sure grant applicants are clear about what they want to achieve, set measurable objectives and report regularly on their progress.

Others are looking for synergies. The PNC Foundation has given to the Hill District Federal Credit Union, Hill House Association, Hill Community Development Corp., the Program for Female Offenders, Freedom Unlimited, the Central New Development Corp. and Carlow College's Hill District program -- all located within blocks of Centre Avenue. The foundation and PNC Financial Corp. have also encouraged employees to volunteer as tutors at the Hill's elementary schools. The Hill "is close to the site of our [downtown] headquarters," explains foundation vice president and manager Mia Hallett Bernard. "And, quite frankly, there's a need. … PNC Foundation's involvement there has definitely created progress."

Of course, foundations work mostly through nonprofits -- some of which aren't known for their business savvy. "You'd be amazed at how many proposals you get where you have no idea what they're asking for or what the organization does," says Barbara K. Robinson, first vice president of Mellon Private Wealth Management, which handles business matters for foundations.

So in 2000, the Bayer Foundation, R.K. Mellon Foundation and others created a school dedicated to teaching nonprofits to manage themselves more like businesses. The Bayer Center for Nonprofit Management, at Robert Morris University's downtown campus, offers courses on governance, technology, business planning, ethics, negotiation and other subjects.

Nonprofit directors "are artists and social workers and teachers. Many of them are extremely intelligent. But most of them didn't go to business school," says director Peggy Morrison Outon. Now that the market's woes have pinched giving, she says, many managers "are going to have to learn how to be efficient and entrepreneurial."

Some in the foundation world are concerned that the trend toward business principles could be taken to extremes. "If you go too far," Fields cautions, "you risk going overboard and getting away from the purpose of what you're supposed to do for the community."

"You can look at all the ratios and the data," says Doreen Boyce, president of the Buhl Foundation, "and in the end, you often have to rely to some extent on intuition regarding what might work."

Let it Flower
Kathy Buechel steps aside to let a fork lift pass. It's a blustery November day, but that hasn't deterred her from trekking to Manchester to check the status of one of the Alcoa Foundation's favorite projects, a near-complete orchid greenhouse. "This is really something with vision, that's rooted in the community, that has global potential," says Buechel, foundation president and treasurer.

Only a few panels of glass and the heaters are missing, and by early 2003, the North Side neighborhood nearly ruined by highway construction in the '60s and '70s will become an exporter of delicate tropical flowers. Why? "Because I like orchids," says William Strickland, president and CEO of the Manchester Craftsmen's Guild, which is building the greenhouse. "It took eight years to raise the money, but I did it because I'm crazy about orchids."

About six years ago, Strickland convinced the Alcoa Foundation to pay for the process of planning the greenhouse project. Then the foundation got its parent company, the global aluminum maker, to donate $177,000 worth of greenhouse parts. When complete, the greenhouse will be a horticultural training center for young Pittsburghers, an employer for neighborhood residents, a revenue source for Strickland's nonprofit guild and a magnet for drawing international attention to Manchester.

"The way you revitalize these communities is you have to bring the world here, man!" Strickland bellows to the aluminum rafters. "You've got to get this place reconnected to the universe."

Foundations, at their best, make connections, touch people, change communities and encourage self-reliance, says Buechel. The Alcoa Foundation has made grants in some 50 countries and often brings international dignitaries to Pittsburgh to see what nonprofits, foundations, business and government -- working together, usually -- can achieve. "They are blown away," she says, "by the innovation and the passion here."
That's a foundation to build upon.

Rich Lord is a regular contributor to Pittsburgh magazine. His last story was on the local defense industry in December. Associate editor Mike May covers art for this magazine.