The Nuance of Nonprofits

Michael Clements looked at a vacant downtown building, with its chipped paint, outdated awning and weathered bricks. It was an eyesore, but one he knew he had to have.

Three years later, the building thrives, housing the second location of the Penn Avenue Fish Company restaurant and two spacious loft apartments upstairs.

“I picked the worst time to do it—in 2008,” says Clements, 39. “The banks weren’t lending; I couldn’t get a broker to pay attention to the property. It was more work than I realized.” So, he turned to the Paris to Pittsburgh program, a Pittsburgh Downtown Partnership nonprofit initiative funded by the Colcom Foundation that offers property owners grants for building enhancements and outdoor seating. The program, with an initial $1 million grant, has revolutionized the look and feel of Market Square. A new $350,000 grant will allow other downtown business owners to continue improving building facades.

With a $25,000 grant for renovations, Clements, a developer from Mt. Lebanon, was able to invest other money in the loft apartments to attract tenants and make his blueprints become reality.

The strategy of investing in Clements’ work, known as placemaking, is aimed at recreating a European feel downtown with outdoor cafes and pedestrian access. In many cases, placemaking calls for inexpensive ways  to improve public areas. Market Square, due to various grants, is now equipped with a retractable stage, new lights and trees and outdoor Friday night happy hour music. “All of these outdoor seating venues in Market Square create a certain level of vibrancy,” says John Rohe, vice president of philanthropy for Colcom, which gives away about $20 million annually. “Why does Pittsburgh receive recognition for being the most livable city? It didn’t just happen overnight; it resulted from a number of people exercising their best judgment in identifying criteria for livability.”

As nonprofits face budget cuts in a stagnant economy, the stakes are higher with each funding decision that Pittsburgh’s wealthy philanthropic foundations make. These veins of civic-minded wealth may stretch back for more than a century or they may be newly minted. Either way, they provide the bedrock of support for a vast and varied array of projects that depends on their grant dollars for survival. And the decisions they make have wide-ranging effects on life across the region.

Local foundation leaders say that their funding emphasis remains on key sectors such as education, healthcare, arts and culture, environment, social services and development. But each year,they evaluate their focus and strategy. Pooling resources or even merging foundations are among the ways they’re seeking to maintain and improve Pittsburgh’s status as a major hub for healthy nonprofits. Some foundation leaders say such collaboration will continue, while others say a winning formula lies in independent missions that avoid overlap.

“Difficult times test your mettle, and they test your vision,” says Grant Oliphant, president and CEO of The Pittsburgh Foundation. “What these times are challenging us to do is continue to do better than any region of the country at reinventing ourselves.”

For example, taking care of the environment no longer just means air pollution control and cleaning up the downtown riverfronts; Marcellus Shale drilling has added an entire new dimension ofwater quality concerns throughout the region. Education, no longer only means finding and retaining good teachers (although that’s still a necessary component); there are technological advances that must be harnessed to facilitate learning. Innovative healthcare means finding new ways to reduce hospital readmissions; help primary care doctors acquire and use electronic records to enhance quality; and improve end-of-life care and educate caregivers.

“I would say that our strategy is always changing, always evolving,” says Karen Feinstein, president of the Jewish Healthcare Foundation. “To us, life is a Scrabble game. We make a move, someone else makes a move, et cetera, and it all influences what we do next. We aren’t sitting alone on our own planet, so we need to be responsive to a changing environment. In our focus area—health—much is changing and in flux.”

The most recent statistics indicate that in 2009, there were 1,433 foundations in metropolitan Pittsburgh that gave away more than $570 million, according to the Foundation Center, a clearinghouse of philanthropic data. Twenty-eight percent of the giving went to education; 16 to arts and culture; 14 to human services; 13 to public affairs; 11 to the environment; and the rest to health, science and technology, religion and social sciences.

At The Heinz Endowments, which distributes about $60 million to $70 million annually, President Robert “Bobby” Vagt says he wants to reach out to new nonprofits. “I think we need to ask ourselves whether we’ve been intimidating and not inviting in the past. Have people been reluctant to walk through our doors? We need to look at ourselves in the mirror and say, ‘I’m open to anything.’ ”

He also points to programs such as the African American Men and Boys Task Force as collaborative, community-based efforts that are vital to Pittsburgh’s lifeline. The task force is dedicated to increasing educational, economic and social opportunities for African American men and boys in the Pittsburgh region.

“The fact of the matter is that if you look at the circumstances around African American men and boys, based on 200 years of history and also current events, there are an awful lot of lives being wasted. People are uncomfortable talking about it. But we went out and spent time and a great deal of effort meeting with people in the community: Custodial mothers, young men, custodial fathers, leaders and, we said: ‘What are the issues?’ ”

A 2010 U.S. Census Bureau study indicated the Pittsburgh region has the highest poverty rate among working-age African-Americans of any of the 40 largest metropolitan regions in the country.

Mark Lewis, president and CEO of the Poise Foundation, sits on the African American Men and Boys Task Force’s advisory board. His foundation is smaller, giving out about $600,000 a year. But it collaborates with larger foundations such as The Heinz Endowments and Richard King Mellon Foundation to address issues in the African American community.

“Over the years, our grants focused on youth-oriented programs,” Lewis says. “Now, we’re undergoing a strategic review to concentrate on finding ways to focus on strengthening the family unit in the black community. We want to focus on building family values, intact families and help those families build some wealth. When you have such a large number of people at the poverty level and you don’t have a visible middle class, I think that causes a lot of issues especially for kids, who don’t see role models. Many of those who reach middle class leave the inner city. What you have left are those who don’t have the ability to move out—a lack of resources in the urbancore—and that only exacerbates the poverty issue.”

Foundation leaders advise nonprofits on ways to become more self-sufficient. Still, there’s no solution that fits all.

“For many, diversifying the base of donor support is the only realistic answer, and that is difficult to do in these times,” says William Getty president of the Claude Worthington Benedum Foundation, which gives out about $16 million annually and focuses on southwestern Pennsylvania and West Virginia.

“Some nonprofits are in fields where competitive government grants are available, but competing for such grants involves skills and costs that are beyond the capacity of many. I think the best approach is to first be sure that the organization is well focused on its core mission, and then beas creative as possible in identifying means of support.”

Gregg Behr, executive director of the Grable Foundation agrees. “Nonprofits are nonprofits for areason. The market has not figured out a way to make them self-sustaining. They are subsidized by foundations and contracts for good reason.

“The hallmark of the Grable Foundation has always been focused on improving the lives of children. Nothing shakes our sense that those are the areas for us to be invested. The only thing that changes is the way the new opportunities arise because of remarkable regional leadership.”

Like Grable’s dedication to children, the Colcom Foundation is loyal in its dedication to the environment. But how the environment is defined is always evolving along with various causes, says Colcom’s Rohe. “Where the history of the foundation in the environmental sector would have been watershed remediation, land conversion and habitat preservation, we now have a new component to that area and that is Marcellus Shale. Since Marcellus Shale has become such a looming issue, the foundation has taken a greater interest in trying to get a better sense of the risks involved in drilling.”

That includes two grants this year, totaling $125,000, to the nonprofit Mountain Watershed Association and other groups for water monitoring and citizen training in the Laurel Highlands region.

The association, headquartered in Melcroft, used the money to purchase 8-inch cigar-shaped data loggers, which are permanently mounted in various streams and yield water quality readings every 15 minutes. Such a monitoring process also requires staff and installation efforts—so far, 37 data loggers have been set in various waterways.

“We need to get water quality information and get it before more drilling ensues,” says Beverly Braverman, the association’s executive director. “Without these grants, it would be so difficult todo this work. I think it would be prohibitive.”

Oliphant points to three areas that have undergone rapid development since he joined The Pittsburgh Foundation four years ago: online philanthropic initiatives through technology; community impact initiatives, and continuing strategic development. When the economy spiraled downward, the foundation formed an emergency fund called Neighbor Aid to help nonprofits that were coping with increased demand and fewer resources. During the third-annual Day of Giving event Oct. 4, donors went online to give to more than 600 nonprofits in Allegheny and Westmoreland counties by using smart phones and tablets, for the first time, along with their computers. Foundations chipped in $850,000 in matching funds through PittsburghGives and WestmorelandGives. Public donations to Day of Giving this year exceeded $5.5 million, surpassing last year’s public donations of $2.8 million.

The Pittsburgh Promise, now a well-known venture, is a major initiative spurred by UPMC that Oliphant believes must continue to grow. The program offers up to $40,000 in college tuition for Pittsburgh Public Schools and some charter school students with a 90 percent attendance rate anda 2.5 grade-point-average. “There’s no more important agenda in Pittsburgh today than making sure our largest urban school district delivers a quality education to 26,000 students. If the schools don’t teach well, the parents won’t stay in Pittsburgh.”

When it comes to collaboration, The Pittsburgh Foundation made headlines last year when it merged with The Community Foundation of Westmoreland County to strengthen its philanthropic footprint in the region. The Richard King Mellon Foundation even stepped in to pay $400,000 in grant money to help pay for finalizing the merger. The union helped the Community Foundation keep its name, staff and board and take advantage of using larger Pittsburgh Foundation resources. Oliphant says The Pittsburgh Foundation will explore similar mergers in the future. “There are smaller community foundations that are struggling to survive and we believe they need to be here.”

Then there’s the news business. The Pittsburgh Foundation, with other foundations, recently helped acquire WDUQ-FM, and will begin to delve into investigative journalism by launching Public Source, a nonprofit watchdog news organization focused on Pittsburgh and the surrounding region. Pittsburgh Today launched its in-depth reporting initiative this fall with a story on abandoned and vacant property in Pittsburgh Quarterly and a seven-part series on the same topic in the Pittsburgh Post-Gazette. The Pittsburgh Today effort also is funded by local foundations and builds on statistical information published on the group’s website, pittsburghtoday.org

Collaborative efforts among foundations are also becoming more commonplace, says Fred Thieman, president of the Buhl Foundation, which gives away $3 million to $4 million a year. “We’re a little more formal and a little more focused to make sure we’re not duplicating efforts and pooling funding to support particular initiatives. The key is to make sure the money is best spent and organizations are working collaboratively.”

Programs such as Vibrant Pittsburgh, backed by the Buhl Founation and others, aim to diversify the work force in western Pennsylvania and market the region in a way that attracts more minorities.

The Power of 32 is a regional initiative, involving 32 counties in western Pennsylvania, Maryland, Ohio and West Virginia. Funded by philanthropic efforts and some public money, the organization plans to tackle issues ranging from Marcellus Shale job training and technical education to transportation and the environment. As Thieman says, “It’s about getting together and realizing that the region transcends artificial boundaries, like states.”

Pushing boundaries is the nature of foundations, and many will continue to take chances that lead to success or learn from mistakes made along the way. “Every year there are projects that go awry or perform less than expected,” says Grable’s Behr. “I think a venture capitalist would saythe same thing about businesses; some fail, some don’t.”

The goal is maintaining collegial working relationships with other regional foundations. “At the end of the day, foundations are successful only to the extent that their grantees are about achieving results. Sure there are challenges, but for the most part, nonprofits in the Pittsburgh region have shown real flexibility and sophistication as they navigate the current economic circumstances. We’re here to help them.”

Clements, who owns the building on Forbes with the restaurant and lofts, wants others to take advantage of the opportunities the local foundations offered him.

“With Paris to Pittsburgh, I wanted them to feel like remodeling my building was partly their project, which it was. In many respect the value extends beyond just the property owners in that these great funding programs help us better preserve our historic building inventory, beautify our neighborhood and create a destination where people want to be. Really isn’t that point?”