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March 2, 2016

Community Foundation for Palm Beach and Martin Counties and Giving

by Anne Paddock

A community foundation is a tax-exempt, nonprofit, autonomous, publicly supported, nonsectarian philanthropic institution with a long term goal of building permanent, named component funds established by many separate donors for the broad-based charitable benefit of the residents of a defined geographic area, typically no larger than a state.

The Community Foundation for Palm Beach and Martin Counties (Community Foundation) collects and invests charitable donations, serves as a philanthropic advisor,  and is “dedicated to serving the community’s needs” by awarding grants to non-profit organizations in five areas:  arts and culture, education, environment, family, and health and wellness.

To make those grants, the Community Foundation relies on donors, many of whom establish a “fund” – a donation to the Community Foundation – from which grants will be made. According to the organization’s website, one of the most significant advantages to setting up a fund with the Community Foundation is their philanthropic services team, which provides custom research on a nonprofit organization or issue area at the donor’s request. In other words, the Community Foundation serves as a one-stop vehicle where donors can make a tax-deductible donation which will be invested and distributed via grants to non-profits in the community.

Revenue is generally obtained two ways:  donations and investment income although the organization also earns income from the sale of assets, rental income (from the commercial building they own, operate out of, and lease), and other sources. For the year ending June 30, 2014, the IRS From 990 (2013) reports total revenue of $9.3 million – most of which came from contributions ($4.6 million or 50% of total revenue), the sale of securities ($3.5 million or 38% of total revenue), and investment income ($1 million or 11% of total revenue).

Functional expenses (net of depreciation and grants) totaled $2.8 million or 30% of total revenue:

  • $1,095,486: Salaries, Benefits, Pensions, Payroll Taxes (11% of total revenue) for 16 staff
  • $   769,776:  Investment Management Fees, Legal, Accounting  (9% of total revenue)
  • $   398,835: Office, Occupancy, IT, Insurance, Rent and Utilities (4% of total revenue)
  • $  164,720:  Advertising and Promotion, Donor Services, Travel, Conferences  (2% of total revenue)
  • $   172,452:  Interest  (2% of total revenue)
  • $   153,627:  Miscellaneous and Other  (2% of total revenue)

Grants of nearly $6.6 million were made to organizations (non-profits) and $704,774 to 41 individuals (an average grant of $17,190) in the form of scholarships for a total of $7.3 million (or 78% of total revenue).

If the grants and functional expenses listed above are added together, the total is $10.1 million, which is about $800,000 more than the organization reported in revenue. However, the Community Foundation has significant net assets – mostly in publicly traded securities – that actually increased from $123.2 million at the beginning of the year to $139 million ($52.6 million in 103 accounts or 38% of which are in donor advised funds while $85.4 million in 182 accounts or 62% are in funds and other accounts) at year-end because of unrealized gains on investments (meaning the organization is still holding the investment, reporting its year-end value).

Grants of $5,000 or more were provided to 162 non-profit organizations with grants of $100,000 or more given to 24 organizations within Palm Beach and Martin Counties, totaling $3.7 million (or 56% of grants to organizations):

  • $458,107:  United Way of Palm Beach County, Boynton Beach, FL
  • $296,368:  Place of Hope, Palm Beach Gardens, FL
  • $256,750:  The Lord’s Place, West Palm Beach, FL
  • $217,500:  Adopt-A-Family, Lake Worth, FL
  • $216,667:  Community Partners Group, Riviera Beach, FL
  • $170,000: Chabad Lubavitch of West Palm Beach, West Palm Beach, FL
  • $167,500:  Young Singers of the Palm Beaches, West Palm Beach, FL
  • $165,000:  Palm Beach Zoo and Conservation Society, West Palm Beach, FL
  • $137,900:  Palm Beach Opera, West Palm Beach, FL
  • $125,000:  ARC of Martin County, Stuart, FL
  • $122,914:   Indiantown Non-Profit Housing, Inc., Indiantown, FL
  • $119,600:   Legal Aid Society of PB County, West Palm Beach, FL
  • $119,100:   Street Beat, South Bay, FL
  • $119,100:   Neighborhood Renaissance, Inc., West Palm Beach, FL
  • $110,700:   Education Foundation of Palm Beach County, West Palm Beach, FL
  • $110,000:  The Paragon Foundation, West Palm Beach, FL
  • $106,771:   Aid to Victims of Domestic Violence, Delray Beach, FL
  • $105,000:  El Sol Neighborhood Resource, Jupiter, FL
  • $101,250:   Palm Beach County Food Bank, Lantana, FL
  • $100,000:  Palm Beach Atlantic University, West Palm Beach, FL
  • $100,000:  Florence Fuller Child Development Center, Boca Raton, FL
  • $100,000:  Creative City Collaborative, Delray Beach, FL
  • $100,000:  Boca Raton Regional Hospital Association, Boca Raton, FL
  • $100,000:  Achievement Center for Children and Families, Delray Beach, FL

The largest grant was given to United Way of Palm Beach County, an organization that also acts as a community oversight committee by collecting revenue and awarding grants to other non-profit organizations – the same function that the Community Foundation does by providing custom research on non-profits. Except that by making a grant of $458,107 to United Way of Palm Beach County, 25% of the donation or $114,526 went to cover the administrative and overhead costs of United Way of Palm Beach County leaving $343,581 to be disbursed to local non-profits.

In essence, a $1 donation made to Community Foundation that is granted to United Way of Palm Beach County must first have 30 cents deducted to pay for the Community Foundation’s functional administrative and overhead costs, leaving 70 cents to be granted to United Way of Palm Beach County who deducts 18 cents (25%  of 70 cents) to pay for their overhead, leaving 52 cents for the local non-profit. Many donors would take exception with 48 cents of every dollar going to staff who determine where charitable dollars should be granted.  From that 52 cents, the local non-profit’s administrative and overhead costs must be deducted before reaching the intended population. If the local non-profit uses 20 cents of every dollar for administrative expenses, then 20% of 52 cents is 10 cents, leaving 42 cents for the intended population. That’s quite a bit of dilution.

103 out of 162 grants ($5,000 or greater) were made to local organizations while 59 grants of $5,000 or more totalling just under $1 million (15% of total grants to organizations) were given to organizations outside of Palm Beach and Martin counties, with the largest recipients listed below:

  • $65,000:  Coastal Conservation Association, Orlando, FL
  • $60,000:  American Friends of Leket, Teaneck, NJ
  • $55,000:  Cong Simchat Tzion, Lakewood, NJ
  • $45,000:  Prostate Cancer Foundation, Santa Monica, CA
  • $35,860:   Clearpoint Credit Counseling, Tampa, FL
  • $31,000:   Israel Tennis Centers, NY, NY
  • $30,000:  Pontifical University of the Holy Cross Foundation, NY, NY
  • $30,000:  Sophia Institute Press, Manchester, NH
  • $30,000:  Coastal Ocean Association, St Augustine, FL
  • $25,000:  Jewish Heritage Center of Queens and Long Island, Flushing, NY
  • $25,000:  Georgetown University, Washington, DC
  • $25,000:  Columbia Law School, NY, NY
  • $25,000:  Climate Museum, NY, NY
  • $23,000:  Child Evangelism Fellowship, Cuyahoga Falls, Ohio
  • $21,097:   Haiti Empowerment Mission, Miami Beach, FL
  • $20,000:  Florida Wildlife Federation, Tallahassee, FL
  • $20,000:  PEF Israel Endowment, NY, NY
  • $20,000:  University of Virginia, Charlottesville, VA
  • $20,000:  St.Baldrick’s Foundation, Monrovia, CA

The Community Foundation provides grants to a wide variety of non-profits in education but grants of $5,000 or more to two types of recipients – public/private schools and schools of higher education – show a total of $58,750  (for general support) to 8 public/private schools, 6 of which are private, 2 of which are public. The 6 private schools received $46,250 (79% of grants to schools) while the 2 public schools – both of whom are in Palm Beach County – received $12,500 (or 21% of grants to schools).  Geographically, $38,750 (66%) was granted to schools in Palm Beach County while $20,000 (34%) was granted to schools outside of Florida.

  • $13,750:  Cardinal Newman High School, West Palm Beach, FL (Private)
  • $10,000: The Canterbury School, New Milford, CT  (Private)
  • $ 7,500:  Palm Beach Day Academy, Palm Beach, FL  (Private)
  • $ 7,500:  Boynton Beach High School, Boynton Beach, FL  (Public)
  • $ 5,000:  The Benjamin School, North Palm Beach, FL (Private)
  • $ 5,000:  Lawrenceville School, Lawrenceville, NJ (Private)
  • $ 5,000:  The Lamplighter School, Dallas, TX (Private)
  • $ 5,000:  Jupiter Community High School (Public)

17 grants totaling $349,248 (5% of total grants to organizations) were given to the following institutions of higher learning:

  • $100,000:  Palm Beach Atlantic University, West Palm Beach, FL
  • $ 40,000:   Florida Atlantic University, Boca Raton, FL
  • $ 30,000:   Pontifica University of the Holy Cross Foundation
  • $ 25,000:   Georgetown University, Washington, DC
  • $ 25,000:   Columbia Law School, NY, NY
  • $ 20,000:  University of Virginia, Charlottesville, VA
  • $ 19,000:   College Foundation of University of Virginia, Charlottesville, VA
  • $ 17,600:   University of Miami, Coral Gables, FL
  • $ 17,400:   Colgate University, Hamilton, NY
  • $ 11,500:   Carmenite Monastary, Cody, WY
  • $  7,500:   Northeastern University, Boston, MA
  • $  7,275:   The American College, Bryn Mawr, PA
  • $  6,973:   Evergreen State College, Olympia, WA
  • $  6,000:  University of Texas, Houston, TX
  • $  6,000:  Fielding Graduate University, Santa Barbara, CA
  • $  5,000:  Providence College, Providence, RI
  • $  5,000:  St Vincent de Paul Regional Seminary, Boynton Beach, FL

3 grants totalling $145,000 (42% of grant monies to institutions of higher learning) were given to local institutions, while 14 grants totaling $204,145 (58% of grant monies to institutions of higher learning)  were given to institutions outside of Palm Beach and Martin counties.

Grants totaling $136,000 (2% of total grants to organizations) were given to 9 religious churches/temples/chapels, almost all of which were in Palm Beach and Martin County. Within Palm Beach County, $108,250 (80% of grant dollars to churches/temples/chapels) representing  6 grants were to churches/temples in Palm Beach or West Palm Beach.

  • $30,000:  St. Edwards Catholic Church, Palm Beach, FL
  • $20,000:  Episcopal Church of Bethesda-by-the-Sea,Palm Beach, FL
  • $20,000:  Memorial Presbyterian Church, West Palm Beach, FL
  • $18,000:  Temple Emanu-El of Palm Beach, Palm Beach, FL
  • $17,250:   First United Methodist Church of Boca Raton, Boca Raton, FL
  • $15,000:  St. Ann’s Catholic Church, West Palm Beach, FL
  • $ 5,500:   Mariner Sands Chapel, Stuart, FL (a chapel within a gated community)
  • $ 5,250:   Temple Israel, West Palm Beach, FL
  • $ 5,000:   Temple Sinai of North Dade, North Miami, FL

In summary, grants to schools, institutions of higher learning, and churches/temples represent a small portion of the overall grants to organizations:  $543,998 (or 8% of grants to organizations) through 34 grants – but are notable for the following reasons:

  • Most of the grants to schools went to private schools – that have significant endowments (up to $400 million) – for “general support.” The 2 grants to public schools went to high schools within middle class communities in Palm Beach County. No grants were given to high schools in low-income areas of Palm Beach and Martin counties. A reason could be that the grants were the result of requests from donor advised funds, although only 38% of the funds fall into this category.
  • Grants to institutions of higher learning for “general support” were also concentrated outside the community area with most grants given to non-profits that have significant endowments.
  • Most of the grants given to churches/temples/chapels were to those located in Palm Beach and West Palm Beach. No grants were given to churches/temples in low-income communities in Palm Beach and Martin Counties. Again, this could be a result of donor-advised funds and, yet only 38% of the funds fall into this category.

Dedicated to serving the community’s needs, the Community Foundation clearly supports some of the most important non-profits in Palm Beach and Martin Counties, and yet the largest grant of nearly a half million dollars was to an organization (United Way of Palm Beach County) that also specializes in collecting revenue and making grants to local non-profits, resulting in $114,526 that could have been used more efficiently by being given directly to a non-profit providing a service or good to the community.

In the foundation’s brochure, the area served is defined as “Palm Beach and Martin Counties” along with stating “We are Palm Beach and Martin Counties’ Community Foundation,” and yet 15% of grant dollars were made to non-profits outside the geographic community. Conversely, 85% of the granted monies (of $5,000 or more) were granted to non-profits within the local community. Grants to schools, institutions of higher learning, and churches/temples/chapels were concentrated in higher income areas (many to well endowed schools) and not in lower-income areas in Palm Beach and Martin Counties that have little or no resources. Grants to religious churches/temples/chapels were to those primarily in the Palm Beach/West Palm Beach area.

And, finally there is a question of need and allocation. An outsider looking at the grants listed on the 990 will notice:

  • Numerous grants were given to foundations which for the most part provided grants to individuals or programs administered through the various foundations. However, grants from the recipient foundation to another non-profit were also made which dilutes the reach of the original donation.  For example, $30,000 was given to the Marine Industry Education Foundation who turned around and made $136,000 in grants to The Cystic Fibrosis Foundation, American Cancer Society, and Veterans Adaptive Sports, inc. Typically foundations are established to distribute funds but when a foundation provides grants to another foundation who makes grants to other non-profits, there is a dilution of donor dollars because the overhead of the organizations must be paid at three levels (the original foundation grant, the recipient foundation, and the grant to the non-profit).
  • $75,000 was granted to Delray Tennis Outreach – a 501 (c) (3) – which was established in 2014 (although the organization was set up in 2012) with an office at 123 Australian Avenue in West Palm Beach. The organization provides youths – who otherwise could not afford it – the opportunity to play recreational and “potentially competitive tennis.” They raised $130,000 last year and distributed $124,000 primarily in individual grants, tennis tournament fees, and meals/meeting expenses. Although noble, some may question whether these funds could have provided more assistance to those who don’t have their basic needs of shelter, food, and healthcare met.
  • $46,000 was granted to The Salvation Army of Martin County which is part of the Salvation Army Southern Territory which collected $1.1 billion last year and spent $1 billion ($160 million was assistance to individuals), leaving nearly $100 million that was added to their fund balance/net assets, which was $3.1 billion at year-end, after they allocated $457 million for retirement benefits for their staff.
  • $30,000 was granted to United Way of Martin County who also acts as a vetting agent before distributing funds to local organizations in need.  In essence, a vetting foundation gave $30,000 to a vetting organization which creates a dilution of funds for the needy.
  • $10,000 was granted to the Hippocrates Health Institute (a non-profit) which operates a facility that provides educational and training services on how to eat and live healthier. Hippocrates Health Institute collects about $20 million a year, mostly through tuition and services. The President and Vice President (they are married) collected $1.5 million in compensation last year. The organization has about $30 million in net assets concentrated in real estate and liquid cash and securities.

To read the Community Foundation’s IRS Form 990 (2013) for the year ending June 30, 2014, click here.

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