Since starting my role as Executive Director in mid-January I have received a lot of excellent questions from people! Thank you, and please keep them coming!
To boil down one common theme of questions into a single one is challenging, but my observation so far is that the most important question I’ve been asked is this: What – exactly – is a Foundation?
I will explain the answer to that question by first sharing what a Foundation is not. A Foundation is not a bank.
A bank holds money, lends money with interest (and requires it to be paid back), provides savings accounts, checking accounts, credit cards, small investment opportunities for small amounts of money, and more. A bank is for profit. That means all its activities are designed to make the bank more money.
A Foundation is nonprofit. That means a Foundation is a charity, which may sound obvious to you. But being a charity means that a Foundation is bound by law (federal law, IRS, and Ohio law) to only grant money toward a defined – and legally approved – charitable purpose. That means all our activities (grants and scholarships) are designed to support the Barberton community. Our community is our cause.
Barberton Community Foundation currently has 116 funds that our talented team is the caretaker of.
The 116 number includes our “Principal Fund” or “Main Fund” or endowment. For ease of conversation, let’s call it the Main Fund.
Our Main Fund is the original gift that funded the Foundation, $86M, plus the income earned from investment. The original money was invested over the past 27 years, and it is only a fraction of the proceeds from those investments that we are allowed to spend in grants and scholarships and operations. In other words, we cannot spend the $86M – only the proceeds from the investments of that $86M.
The other 115 funds our team manages and takes care of are created by donors, people who have created their own fund with a specific charitable purpose for Barberton. These range from scholarships to funds that support food insecurity of our residents to education programs like Destination Imagination, and more.
None of the 115 funds is even close to the size of our Main Fund.
Imagine the Foundation as an orchard of apple trees. Orchards have trees of all different sizes. They all bear fruit!
Our “orchard” at Barberton Community Foundation has one larger tree – our Main Fund – and many baby trees. The baby trees create a small but important amount of fruit to eat.
The larger tree creates a lot more fruit. But the tree isn’t big enough yet to feed everyone!
It is in this orchard analogy that I think it is easiest to understand what a Foundation is.
Have you ever read The Giving Tree by Shel Silverstein?
If not, please do. I know, I know… it’s a kid’s book.
Here’s why you should read it.
This book is a cautionary tale for how our Foundation’s Main Fund could be destroyed if we aren’t wise.
In it, a boy (our community) discovers a large tree (the Main Fund). The tree just wants to help and support the boy. As the boy grows up, he asks different things of the tree. First, it’s to eat the fruit the tree makes. Then it’s to carve his initials into the tree with his girlfriend. Then he asks the tree for its branches to build something. Then the trunk. At the end, all that is left is a stump. The tree has given all it can, and it offers to be a stump to rest on for the boy, who is now an old man.
It’s a sad tale when you think about how the tree could have given fruit forever, supporting the boy’s children and grandchildren.
To bring our analogy back around to the Foundation and our Main Fund, we are required – by law – to only let people eat the fruit of the tree. We cannot give our branches or trunk.
Giving fruit forever is not just our obligation, it is our duty and great responsibility!
I hope this analogy is helpful. And check out The Giving Tree from the Barberton Public Library. It’s a great book. Once you’ve read it, I hope you will understand how important it is not just to protect our Main Fund “tree,” but to make this tree as BIG as it can possibly be.
More on that next time.
In Community,
Josh Gordon
Executive Director
Barberton Community Foundation
