Religious-based philanthropy has grown as motivated donors discover donor directed funds.

By Robert Franklin, Star Tribune – January 20, 2007

In the 1990s, many Minnesotans discovered they didn't have to be rich to give away money through a community foundation that focused on their hometown.

More recently, they've discovered they can do the same through a foundation that focuses on their faith.

The Lutheran and Catholic community foundations, which didn't exist in Minnesota 15 years ago, have attracted thousands of donors, about $380 million in combined assets and, in 2005, combined grants of $13.7 million.

Nationally, donor-directed funds at 88 grantmaking organizations grew to $15.5 billion in 2005, up 22 percent in one year, the Chronicle of Philanthropy reported. Those funds distributed $3.3 billion to charity.

Much of the growth in Minnesota and across the nation has been spurred by an intergenerational transfer of wealth, an increase in planned giving and more knowledge by donors, said Eli Skora, executive director of the United Jewish Fund and Council in St. Paul. Gains in the stock market also have been a factor.

Donors say they give to the funds because they're a simple, flexible, efficient way of giving. The donors don't have to worry about administration or investment strategies and they can get good advice on religious causes.

"It's easy to identify the geographic boundaries of community foundations," said Bill King, president of the Minnesota Council on Foundations, adding that the shared values of religion offer "great potential for ... increased giving."

On the list of Minnesota's top community foundations, the Lutheran and Catholic groups rank just behind the much larger and older St. Paul and Minneapolis foundations. The Minnesota Council on Foundations ranks the state's largest foundations each year and the Star Tribune publishes the top 25 (see page D2). The Lutheran Community Foundation ranked No. 24 in 2005, the most 'recent year for which financial information is available, up from No. 33 in 2004.

There are other religious-oriented foundations. The Jewish Community Foundation, which is an arm of the Minneapolis Jewish Federation rather than a separate foundation, gave away $6.9 million last year.

The endowment program of the United Jewish Fund and Council in St. Paul and the Fidelis Foundation, a Christian organization, each gave away about $2 million.

The donor-directed fund -- formally called "donor advised" -- is a combination of pass-through giving and endowment. It's the basic tool for many religious and community foundations and for similar giving funds set up by commercial money managers such as Fidelity.       

Donors make tax-deductible contributions into the funds when they wish -sometimes timed for tax purposes -- and recommend donations to specific charities to be taken out when they wish. The foundations almost always follow the recommendations as long as the donations are to legitimate charities and do not contradict the foundation's mission (the Catholic foundation wouldn't allow donations to an abortion-rights group, for instance).

Donor funds often require a minimum of $10,000, although some take as little as $1,000. Investment and administrative fees vary, as do restrictions on whether the funds can be passed down through generations. Community foundations also have funds for their own charitable giving programs.

In the Twin Cities, the Lutheran, Catholic and Jewish community foundations began discussions last month about working together on advertising and some programs.

The collaboration will allow "each faith community to draw out its members to address what matters most to them," said Marilou Eldred, president of the Catholic Foundation. "We share a common love for God, our community and our neighbors."

Lutheran Community Foundation

Established: 1995
Headquarters: Minneapolis
Assets: Nearly $200 million in 2006
Donors: More than 2,300; grants have totaled $37.5 million since founding. Contact: 1-800-365-4172
Web: www.TheLCF.org

Lutheran family gives to prevent malaria

In the Moret family of Arden Hills, nets are a metaphor for sports and for life: soccer, basketball -- and malaria.

Pam and Mark Moret have three young-adult children, a passion for philanthropy and an interest in the international.  So part of their charitable giving goes to Nothing But Nets, a campaign that fights malaria in Africa by distributing insecticide-treated nets to cover beds where people are sleeping.

The Morets have involved their children in their philanthropy, and they give through the Lutheran Community Foundation because it provides "a very thoughtful and organized way of thinking about our giving," Pam said.

After she moved from executive ranks at American Express Financial Advisors to Thrivent Financial for Lutherans about five years ago, stock transactions helped the family open a six-figure, donor-advised fund with the foundation. She and her husband, the retired medical director of Courage Center, have replenished what they've given from the fund, she said.

Unlike other large Minnesota religious foundations, the Lutheran Community Foundation is national. Its 2,300-plus donors come from every state except Maine and New Hampshire, and they give to Lutheran and non-Lutheran causes.

Pam Moret said she values advice she can get from the foundation because "I certainly don't have lots of information on every cause."

But they are enthusiastic about the Nets campaign, part of the United Nations Foundation aimed at curbing 1 million annual deaths caused by malaria. The cost? About $10 a net.

Catholic Community Foundation

Established: 1992
Headquarters: St. Paul
Assets: $180 million (Dec. 31 estimate)
Donors: More than 750 funds and 2,200 donors; $50 million in grants given since the foundation began.
Contact: 651-389-0300
Web: www.catholiccommunityfoundation.org

‘Very Catholic’ couple supports the church

Life was good enough for Steve and Lynn Wolf to retire in their early 50s a decade ago, and now "who we are is parents and grandparents," Steve Wolf said.

They also are committed charitable givers and seekers of deeper spirituality. They were "a couple of kids who came off the farms in Iowa -- and those were small farms," he said. They became sweethearts at a Catholic high school, married young and raised three daughters.

He had a good information technology career in the Twin Cities with Target Corp. and then had his own firm. She was an administrative assistant, a custom seamstress and a coach for their daughters' activities.

"We're very Catholic," he said, and she added, "That's why we chose the Catholic Community Foundation."

They've given heavily to their church, Immaculate Heart of Mary in Minnetonka, to Catholic causes as far away as Uganda and to social services such as food shelves and Sharing and Caring Hands.

The foundation is one of 30 or 40 that have sprung up since 1955 among dioceses around the country, but this one, serving the 12-county Archdiocese of St. Paul and Minneapolis, is the nation's largest.

Besides making contributions easy for donors such as the Wolfs, the foundation helps connect them with a lot of other people, Steve Wolf said, "something beyond our parish ... part of the universal church."

The foundation, which is independent but closely tied to the archdiocese, distributes about $6 million a year, mostly to parishes, schools, seminaries and social services.

Jewish Community Foundation

Established: About 1976
Headquarters: Minnetonka
Assets: $75 million
Donors: 751 donor funds. Distributed $6.9 million last year.
Contact: 952-593-2600; In St. Paul, the endowment of the United Jewish Fund and Council is at 651-690-1707.
Web: www.jewishminnesota.org

Community-minded couple practices what they preach

Mike Berman has a succinct view about the importance of charity: "We're not just put on the face of this earth to play video games."

Berman hasn't turned 50 yet, but so far he's accomplished a lot on this earth: He's a former president of Boston Scientific's SciMed cardiology business, he's started five medical-products companies and he's invested in five others.

He's also lived in Israel for five years, been a board member of the Minneapolis Jewish Federation and its subsidiary Jewish Community Foundation, and he and his wife, Judith, started a family philanthropy fund about 15 years ago to give to a variety of causes.

The foundation distributed about 73 percent of its $6.9 million payout last year to Jewish causes, and it has helped communities as far away as Argentina and, of course, Israel.

The Bermans have two sons, and part of the family's philanthropy has been in the foundation's Genesis Mitzvah funds. Young people may channel bar mitzvah and bat mitzvah gifts to a fund that will pay the interest to charities, and "the child gets to decide" which ones, Berman said.

The foundation "connects you to the community ... as much as you choose," Berman said. He grew up in a family that had modest means but always practiced philanthropy, he said. "It runs in the blood, I guess."

In St. Paul, a separate endowment fund at the United Jewish Fund and Council serves similar purposes.

Robert Franklin • rfranklin@startribune.com

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