Jason Grisell, MBA, President & CEO, The Health Foundation of Greater Indianapolis, Inc
The Health Foundation of Greater Indianapolis, Inc. (THFGI) emerged as a conversion foundation following the initial sale of a nonprofit health maintenance organization (HMO) in 1985. The $12.5 million net proceeds were the beginning assets that would ultimately grow to nearly $50 million by the middle of 1990 when the IRS released the Health Foundation to begin making grants. Now in our 35th year of operation, the Health Foundation’s impact on our community has been substantial. We have contributed over $50 million in grants and support to local nonprofits and programs assisting some of the most underserved citizens in Indiana. Our funding initiatives have included investments in HIV/AIDS, childhood obesity, and access to primary health care for school aged children through the support of school-based health clinics.
Throughout our history, our board of directors has always weighed the needs of the community first when deciding where to invest our financial resources. This community-first position resulted in us exceeding our required 5 percent giving in favor of extending critical support for community programs during economic and health crises, to such an extent that our board was forced to consider implementing a sunsetting strategy a few years ago when our fund neared a point of unsustainability. We began 2020 with approximately $13.7 million in total assets.
Funding a Crisis Few Embraced in the Beginning
The Health Foundation selected HIV/AIDS as our first funding initiative in 1990. HIV/AIDS is the funding initiative that we are best known for. It is the initiative to which we made the most financial contribution and with which we made the greatest community impact. HIV/AIDS is also the only funding initiative we continue to support. Our HIV/AIDS funding has been centered on prevention, intervention, education, direct emergency financial assistance (DEFA), harm reduction programming for substance use disorder, and HIV advocacy with our state legislature Since the adoption of HIV as a funding initiative, we have granted nearly $30 million to support HIV/AIDS programming in Indiana. Given our reduced assets, our most recent grantmaking has been limited to the net proceeds from our two special events and some supplemental funds from the Health Foundation.
As the President & CEO of a small foundation, there are some unique challenges and opportunities to consider when deciding how to implement an organizational strategy.
Grant Size and Program Sustainability
When funding a program or a project, it is important for smaller foundations to understand the impact of their limited capacity. If you are limited to funding only 5-10 percent of a program budget, is that a good use of your limited grantmaking funds? How would the program sustain itself if you were not able to support it the following year? Should you consider funding fewer programs so that your grantmaking can make a larger impact and ensure that programs can achieve their intended outcomes?
Collaboration
As a smaller foundation, we must accept the fact that we are likely not the sole funder of any project. In general, our funds will likely be used to fill a gap left by federal or state funding, or perhaps another foundation funder. This makes it critical for us to communicate and partner with the other funders in our program area. By collaborating with the other funders, you prevent duplication of efforts and excess funding for a project, and ensure that activities are happening in a non-competitive way in order to achieve the best outcomes for the population(s) being served.
Initiative versus Project-based Grantmaking
Smaller foundations must decide how best to implement their grant budgets. Should budgets be allocated to support one or maybe two primary funding initiatives, which dedicates the foundation and its resources to a particular issues(s) over an extended period of time, hopefully resulting in positive change or improvement in health outcomes? Or should foundations concentrate on funding single, focused projects on an annual basis that address the immediate needs of health issues that may not require future funding? A benefit of initiative funding is that it signals to the community that your organization intends to continue funding in this area of specialty for many years to come, which allows for long-term investment in programming and grantee relationships. However, a downside to initiative funding is that it may limit a foundation’s ability to respond to a new public health crisis, or to respond to new interests that result from organizational leadership changes or board member transitions.
Asset Management
Like most private foundations, our assets are the lifeblood of our organization. If our endowment reaches a point where our administrative and grantmaking budgets exceed our earned interest income we are, in effect, spending ourselves down whether we intend to or not. Market and economic fluctuations impact smaller foundations in a more significant way than foundations with larger investment pools. And smaller foundations like mine must rely on the expertise of senior leadership and the board of directors, as well as the guidance of investment consultants and money managers, because our administrative budgets do not allow us the flexibility of hiring a dedicated chief financial officer or other professional to monitor and advise internally.
Looking into the Future
Smaller foundations must seriously consider their current financial position and its impact on the future. As part of your strategic planning, encourage organizational leadership to revisit whether your foundation is going to maintain the 5 percent giving requirement, or allow for flexibility depending on the needs of the community and your boards’ willingness to assist in a time of crisis. The Health Foundation of Greater Indianapolis was formed as a private foundation with the intent to exist in perpetuity. Yet through our own practice, we may spend ourselves down, selflessly serving our community.