Ours was not the first community foundation in the United States. Thus, where did community foundations originate? How did the idea get to Alpena? What were the early years like? Who has led and directed our community foundation? How has the foundation grown? Where has support for our community foundation come from?
There is little doubt where the first community foundation was born. Frederick Goff invented the community foundation in 1914, giving birth to the Cleveland Foundation. Goff was a lawyer, banker and civic leader born in 1858 in Blackbury, Illinois. He later moved to Cleveland, Ohio where his father became a prominent coal dealer. Goff attended Cleveland Public Schools and graduated from the University of Michigan in 1881 with a PhD. He was admitted to the Ohio Bar in 1883, becoming a partner in a succession of law firms. He then became president of the Cleveland Trust Company in 1908 where he remained until his death in 1923.
There was a time when anyone who had a legal question about community foundations didn’t dither around; he or she just called Norman Sugerman. Born in 1916 in Cleveland, Ohio, Sugerman was an attorney in Cleveland spending his early years with the Internal Revenue Service supervising technical tax work. He later became a partner at Baker & Hostetler from 1954-1986. He was the co-author of “Tax Exempt Charitable Organizations”, 2nd Edition, 1983 – the seminal work in its field. He died in 1986.
Sugerman predicted--quite accurately--based on his consulting on the 1969 Tax Reform Act, that the role for community foundations would mushroom in the coming years. In his writings and speeches he got the word out that community foundations could “encourage greater participation by the involvement of more citizens in foundation (i.e. charitable) efforts.”
Word that community foundations could simultaneously enhance private philanthropy and meet public needs eventually made its way to local Besser Foundation representatives. Thus, when United Way Executive Director Howard French asked Carl Reitz, secretary of the Besser Foundation, about raising endowment funds locally, a community foundation was just the ticket. It was not long afterwards that French and a local bank trust officer, Jerry Drews, caught a plane to Cleveland for a visit with Norman Sugerman and his associates.
Later one of the associates, Attorney Robert Bromberg, came to Alpena for a day with an assistant, and explained to some of the members of the proposed foundation board what community foundations could accomplish and what IRS regulations governed their life. The final phase of organization, already in process, then began.
Our foundation was organized July 3, 1974, and received approval from the Attorney General as a Michigan non-profit corporation. Later that year the foundation received approval from the Internal Revenue Service as a tax-exempt organization.
Our foundation was organized as the Alpena Area Community Foundation, serving Alpena, Alcona, Montmorency and Presque Isle Counties. In 1980 the name was changed to Northeast Michigan Community Foundation. And in 1992, the name became Community Foundation for Northeast Michigan. By 1997, the service area covered 10 counties.
In order to represent our communities, the governing board from the first to the present has always attempted to reflect certain diversity. This is seen in the members of the first board, who were: Nancy Fitzgerald, Teacher; Howard French, United Way Director; Philip Glennie, Circuit Court Judge; Herman Kolenda, Clergyman; Judy McDougall, Registered Nurse; Gordon Nethercut, Certified Public Accountant; Frederick O’Dell, Physician; Ronald Ostan, Bank Trust Officer; James Park, Corporate Executive; Jean Pinsky, Retail Businesswoman; Philip Richards, Newspaper Editor; Gregory Shellard, Bank Trust Officer; and Richard Wilson, Insurance Executive. (In more recent years, as our foundation has served a wider area, the board has also shown a geographical diversity.)
Of the original board, Glennie, Wilson, Richards, Park, Nethercut and French served terms as foundation president. This group was followed by Marilyn Frank, James Lappan, Edward Goosens, Lucas Pfeiffenberger, Richard Boyce, George LaFleche, Robert Granum, Betty Krueger, Marianne Liddell-Ray, Charles Wiesen, George Stevens, James Johnston, Avis Hinks, Tom Lappan, Chuck Ingle, Steve Wilson, Donna Garber, Beach Hall, George “Ted” Cavin, Erik Nadolsky, Steve Lappan, Nancy Coombs, Bill Morford, Georgene Hildebrand, Bill Speer, Ann Burton, Sue Moody Keller, Chuck Manning, Esther Ableidinger, Tom Sobeck and Sue Fitzpatrick.
At first, the executive director of the foundation was a part-time position for the executive director of the United Way. Serving on that basis were Howard French, Carl Johnson, C. R. Andrus and Jack Witter. In 1985, Elizabeth Connolly became the first executive director to devote her full energies to the foundation. She was followed by Lucas Pfeiffenberger, Barbara Frantz and Patrick Heraghty, the current CEO.
Two years after organization, in 1976, the foundation’s first published annual report shows that total assets were $172,268. Total revenues were $17,517 and grants awarded for community needs were $9,111.
Ten years after organization, in 1984, total assets were $634, 445, total revenues were $139,837 and grants awarded for community needs were $27,838.
Twenty years after organization, in 1994, total assets were $4,720,108, total revenues were $432,954, and grants were $164,333.
On August 31, 2016, more than 42 years after CFNEM was created, its assets, combined with the assets of its affiliates were $37,331,851. During the first eleven months of the 2016 fiscal year (October 1, 2015 through September 30, 2016) revenues were $2,173,896, and grants and scholarships were $1,510,067.
Even before organization, the Besser Foundation provided funds to operate our foundation. This support has continued over the years. In 1992, the Besser Foundation also gave a gift of $1 million to have the Community Foundation administer their scholarship program. Our foundation would not be the healthy, growing community institution it is today without this magnificent support from the Besser Foundation.
Over the years, as individuals learned about the advantages of using a community foundation, especially for achieving goals beyond one’s lifetime and for obtaining tax benefits, the gifts from individuals, families, estates and corporations have shown remarkable growth. This growth has been reflected in the growth of income from investments and fees for our foundation, which is used to provide ever-increasing grants for community needs, scholarships and foundation programs.
In 1997, CFNEM had an opportunity with some matching money from the W. K. Kellogg Foundation (see Kellogg Youth Funds below), to create three affiliates; the Iosco County Community Foundation, the North Central Michigan Community Foundation (serving Crawford, Ogemaw, Oscoda Counties) and the Straits Area Community Foundation (serving Cheboygan County). As of August 31, 2016, the affiliate portion of CFNEM’s assets totals more than $10.5 million.
In June 1991 the Kellogg Foundation announced a $35 million Community Foundation Youth Project Initiative to 170 representatives from the community foundations across the state. This was a challenge grant created to involve young people in the field of philanthropy while at the same time helping to add up to $70 million to the permanent assets of the state’s community foundations. Each community foundation could apply for up to $1 million which had to be matched on a 1:2 basis. That is, for each dollar received from Kellogg, two dollars had to be raised locally for unrestricted, broad field-of-interest, or scholarship funds. In addition, youth advisory councils had to be formed and comprised of at least 50 percent of youth under the age of 21. The Community Foundation for Northeast Michigan (CFNEM) was able to raise the money required and, in April 1997, payment was received from Kellogg bringing the total in CFNEM’s Kellogg Youth Fund to $1 million. CFNEM’s affiliates were also successful in raising money to create Kellogg Youth Funds in each of their communities.
Each community foundation receiving Kellogg funds had to permanently endow their Kellogg gift in a youth field-of-interest fund. All grants made from the income from these funds must be used for local youth-related programs. The Youth Advisory Councils (YAC’s) continually assess youth needs, help raise money for their funds and advise each local foundation’s Board of Trustees as to how these dollars should be allocated. There is a YAC in each of the high schools in the nine-county area served by CFNEM and its affiliates. Each YAC has 8 to 16 youth members and one adult advisor. During the academic year, monthly meetings are held at each of the schools. These meetings are coordinated by the advisors and the students review grant applications, conduct training sessions, carry out community service, and any other business that arises. As of August 31, 2016, the combined assets of all Kellogg Youth Funds of CFNEM and its affiliates were $1,870,990 and they have awarded grants totaling more than $1.7 million.
The Northeast Michigan Women’s Giving Circle was created in December 2006 with the initial gift from the Estate of Betty Krueger, a former CFNEM board member and lifelong member of Zonta, a women’s service club. Betty’s gift was the seed that helped grow the Women’s Giving Circle Fund, a dream of Julie Wiesen, CFNEM Program Director. Once the fund was created, others began to see the benefit of this fund that would support issues important to women. As of August 31, 2016, the Women’s Giving Circle Fund had total assets of $512,404 and it has granted out more than $25,000.
Norman Sugerman was right. Beginning in the 1970s, the role of community foundations did mushroom. And today, our community foundation stands as a solid example of that growth and of what can be accomplished by forward-thinking people working together in communities throughout Northeast Michigan.
The information about Frederick Goff and Norman Sugerman comes from “An Agile Servant,” edited by Richard Magat, published by The Council on Foundations, 1989. This report was originally prepared as a part of CFNEM’s 25th anniversary by Gordon Nethercut with assistance from Howard French, Lucas Pfeiffenberger and Barbara Frantz with additional updates from Frantz.