The Changing Landscape of Giving

Arizona’s philanthropic bent is surging in surprising new ways.

Despite the economic peaks and valleys we’ve experienced over the past several years, it’s reassuring to know that charitable giving in the U.S. remains a part of the bedrock of our country’s character. In fact, in 2013, individuals, corporations, foundations and bequests totaled $335.17 billion, up 4.4 percent from 2012, according to The Wall Street Journal.

What has changed significantly is the nature of our philanthropy, namely how we choose to give. Historically, charitable support in Arizona (as in most other states) involved a straightforward transaction: a company or individual found a charity or cause that they liked, opened their checkbook and filled in a dollar amount. But that’s no longer the case.

Today, Arizonans are discovering creative new approaches to reach their philanthropic goals. New ideas and tactics for supporting charities, nonprofits, foundations and other similar entities are changing the “giving” landscape and the results are promising.

The Ethical Corporation

To raise anew a highly publicized maxim of the last presidential campaign, corporations may indeed not be people, but, fortunately for us, they can mirror some of the best qualities of humans: integrity, humanity, and generosity. By all observations, CopperPoint Mutual Insurance Company in Phoenix is doing just that.

Founded in 1925, CopperPoint calls itself “Arizona’s premier provider of workers compensation insurance.” But almost more important than the good work the company does to advance the cause and culture of workplace safety, CopperPoint is serving as a model of active corporate responsibility. Over the past decade and a half, it’s been praised as much for the support work that it and its employees are doing in Arizona communities as it has for its leadership in the insurance business. CopperPoint’s rationale is forthright.

“We believe that corporate responsibility requires active engagement in the communities the company serves,” says Rick DeGraw, the company’s executive vice president and chief administrative officer.

Fifteen years ago, DeGraw explains, when the CopperPoint leadership decided to operate as a private entity and no longer remain under the umbrella of state governance, they reckoned that highly visible community involvement could help them along that path. Since then, working through sponsorships, economic development and employee volunteerism, CopperPoint has become a model of active corporate responsibility and the good that it can engender.

The company’s employees’ generosity stretches well beyond its doors and into the heart of the Phoenix metro area and further. Of its 327 current employees, 288 of them are involved in the community, and more than 70 percent are active participants in the United Way. The company funds the largest Big Brothers & Big Sisters school-based program in Arizona, and 29 of its employees see their young “brother” or “sister” at least once a week at an inner-city elementary school.

In 2013, 64 percent of the CopperPoint workforce recorded more than 5,100 hours of service to nonprofits, schools and community agencies across the state. Meanwhile, 21 CopperPoint executives sit
on the boards of 54 Arizona nonprofits.

“What we found,” says DeGraw, “is that not only did we as a company enjoy being engaged in the community, but our employees loved the company better because of the opportunities they were given to participate in the community. That, to us, was good business.”

CopperPoint employees’ volunteer work is as diverse as it is meaningful. They roll up their sleeves to cook dinner for families; they mentor students and sort food for the hungry. They walk to raise money and awareness, shop for school supplies for underprivileged kids, and bag goodies for charity events. They even serve as foster families for homeless dogs and cats.

As DeGraw points out about his company’s policy, “We don’t make grants. We develop partnerships.”

Community partnerships like CopperPoint’s often reflect very quiet incidents of support that, taken in sum, have a meaningful and lasting impact on the city and its residents. DeGraw relates a story about how, not long ago, CopperPoint supported the first mariachi opera ever performed in the United States.

“One of the students, a 15-year-old boy who had never seen an opera before, later asked his teacher, ‘Why did that make me cry?’” DeGraw says. “That kind of breakthrough—that art is a part of the larger community and can have an impact on you personally—that’s a big deal, and so we strive to use our company dollars to expand the reach of nonprofits, art and culture into parts of our community that wouldn’t otherwise have the opportunity.”

Donor-Guided Giving

Companies like CopperPoint that, in addition to offering financial support, are encouraging and empowering their employees to play a more direct role in supporting nonprofits and other causes are becoming more prevalent. It’s one facet of a growing trend called “donor-guided or “donor-advised” contributions, in which companies and individuals are helping to steer where and how their financial endowments are actually being directed.

The practice is being widely embraced. But, according to Carolyn Sechler, a Phoenix-based independent CPA who works exclusively with nonprofits, it has to be administered carefully and under the right conditions. As she points out, financial donors who try and dictate precisely where and in what manner their money is being used can sometimes create problems both for themselves and for the receiving organizations.

“People who feel as though their dollars should directly go to support a certain child, for example, haven’t run a business before,” she says. “They don’t understand how much administration and development it takes to support an organization that can deliver on their promise to a community.”

And those on the receiving end of donor-guided funds can run into other difficulties, Sechler says.

“Larger organizations have the ability and wherewithal to handle [donor-guided programs], but smaller ones often find themselves in a position where they have a lot of donor-advised money [that is targeted for specific uses] and then find themselves lacking the funds to run the back office.”

Sechler does point out, however, that the growing practice is proving to be successful under the right conditions.

“It’s definitely an opportunity for organizations— especially larger ones—to identify alternative ways to attract dollars to their programs. But you just have to be really careful,” she cautions.

‘The Power of Many’

One large organization that is having great success with donor-directed giving is Phoenix Children’s Hospital (PCH).

Dana Jirauch, director of annual leadership giving for the hospital’s foundation, oversees all of PCH’s annual giving programs. Eleven years ago, the foundation launched its Phoenix Children’s Hospital Leadership Circle to offer hospital donors a more direct means of getting involved with the hospital and its mission to treat and heal young patients. Each year, through a highly competitive grant process, Phoenix Children’s Hospital physicians, researchers and administrators meet with Leadership Circle members to make a case for support of their particular programs or equipment. At an annual spring luncheon, Circle members vote to determine how their funds will be prioritized and allocated throughout the hospital.

“In this process, we’re actually pooling all these member/donor funds…and then all the members have the opportunity to rank them and vote where they want their money to go,” Jirauch explains. “We call it ‘the power of many,’ because all of these individuals come together and they have a voice as to where their funds get allocated.”

The funds typically go to innovative research, programs or projects that otherwise wouldn’t fall under the normal scope of funding through the hospital’s more conventional channels, Jirauch explains. Last year, the Leadership Circle voted on and funded a three-dimensional heart printer, a device that enables physicians to “print” an exact 3-D replica of a child’s heart or other organs. Surgeons then use the replica to help them describe and discuss their young patients’ conditions with parents.

In years past, other funded projects included bedside sleepers, which have enabled parents to remain in their childrens’ hospital rooms overnight, and a “cooling cap” therapeutic device that aids oxygen-deprived premature babies.

The Leadership Circle has grown significantly since its inception. On average, the Circle can claim 235 members who have raised more than $2.8 million in funds over the past decade.

“The critical thing—what makes this program unique—is that 100 percent of these donations are going directly to support the grants that we’re funding, “Jirauch points out.

Putting Arizona First

Some Arizona-based giving organizations, like the Arizona Community Foundation, exist almost exclusively to help grow, guide and direct their clients’ philanthropic donations.

Megan Brownell, the ACF’s chief business development and brand officer, says that her company facilitates charitable giving for individuals, families and businesses.

“We steward their assets, professionally managing them for growth and growth strategies that the donors can choose from depending on their goals,” she says.

Using a portion of the donors’ investment returns, ACF makes grants on their behalf. Like other organizations of its kinds, ACF offers its donors different levels of involvement in helping to guide their philanthropic contributions.

“It’s all the way from no involvement, which is when they just turn over the fund to us and let us run it, to remaining directly involved, as with a donor-advised fund, where they’re personally recommending the ongoing grants from the fund and we’re performing the due diligence to ensure that the grant recipients are viable and in good standing,” Brownell explains.

The investment earnings on the ACF’s endowments are significant, amounting to millions of dollars that each year get awarded in grants and scholarships to nonprofit organizations, government agencies and educational institutions. At present, the ACF is controlling more than half a billion dollars and over 1,400 individual funds. Since 1978, it has doled out more than $500 million in grants.

The grants that ACF administers offer a pure example of how directly the ACF philanthropic funds are serving to advance and enrich Arizona and the lives of its residents. Grants are made in five critical areas of the state’s ongoing strategic growth and development. They include: quality education, arts and culture, community improvement and development, environment and sustainability, and health innovations. In the arts category, for instance, the ACF is funding the Arizona Cultural Data Project, a Web-based collection tool designed to collect and disseminate a variety of data to help organizations work more effectively. And in Community Improvement and Development, the ACF is helping to create more affordable housing and support veterans and their welfare.

Like the Phoenix Children’s Hospital has discovered, donor-directed funds have found a receptive home at the ACF.

“Donor-advised funds are really popular vehicles,” Brownell says. “Our donors want to make more than a donation—they want to make a difference. So they remain engaged in how their charitable dollars are used in the community, and the donor-advised funds provide a really nice option for that.

“We really enjoy having active donors who are engaged with the fund. The ACF is 37 years old, so a lot of our donors are still living, and there are many creative and exciting things that are donors are interested in doing. Our job is really to be their partner, and help them do precisely that.”

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