Tri-County Foundations Face Uncertainty

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Tri-county foundations face uncertainty

By Marissa Nall / Friday, February 24th, 2017

The presidents and CEOs of the Ventura County Community Foundation and the Santa Barbara Foundation, Vanessa Bechtel and Ronald Gallo, discussed the Affordable Care Act, income inequality and new strategies for addressing the needs of Central Coast communities in a Q&A with the Business Times.

The Santa Barbara Foundation has $325 million in assets and the VCCF has $115 million.

Can you tell me a bit about the landscape for nonprofits in 2017, the outlook for corporate and private donation and some strategies for connecting with donors?

Bechtel: A rising stock market would generally suggest an uptick should be expected in philanthropic giving. At the same time, a sweeping tax overhaul with tax cuts for wealthy and middle-income families, combined with the potential for limiting the charitable tax deduction, could affect donor incentives and likely reduce overall giving.

I’m pretty concerned about the social services sector, where, on average, 47 percent of the revenue for these nonprofits comes from the government in the form of grants and fees. With food stamps, housing aid, and federal support for education also facing potentially deep cuts, this sector will likely be facing a simultaneous decrease in revenue and a substantial increase in demand for services.

Gallo: With the changes that came through the federal elections there is little doubt that there are going to be many shifting sands. Uncertainty always wreaks havoc on any planning and the future for any corporation and nonprofit. Most corporate programs are derived from some portion of profits so I would imagine as goes the business, so goes the philanthropy of our local companies.

What are the most pressing needs in your community to date and how does your organization best leverage its funds to address those priorities?

Bechtel: Our donors support the wide range of the nonprofit sector — the arts, education, the environment, health and animal welfare, social services, and international causes. I have come to deeply appreciate how much the nonprofits in Ventura County need and rely on unrestricted support to achieve their missions. Many of the organizations within our county have stretched themselves so thin in an effort to be of service. This is why I believe one of the most pressing issues in our community is to help our local organizations become more sustainable. This is especially important to achieve in “good times,” as the climate for fundraising could get a bit tougher.

Gallo: We live in paradise, but side by side with that there’s lots of poverty, lots of inequity in terms of housing. There are also the effects of climate change, not only for the erosion of the beauty and the landscapes that really define our county but also for ranching and farming. Santa Barbara Foundation is taking a really hard look at increasing its toolbox, including bringing people together for important discussions about impact investing. We would begin to take a small portion of our investable assets and put some of those dollars into for-profit organizations in the community that have a social return. We’re convinced that not all problems or issues in this county can be solved by nonprofits. Philanthropy itself nationally is beginning to blur the line between for profit and nonprofit.

How does the foundation view income inequality in the Tri-Counties and balance the needs of high-income communities with those who live on less?

Bechtel: The exacerbated income inequality is certainly alarming. I believe much more attention — focused and sustained attention — to this issue is required. More funding of grass roots and social-justice organizations would make a big difference. I think sometimes people forget that a fundamental tenet of equity is that the people most affected by the inequality need to be commanding the efforts to address it. Additionally, making sure we support job-creation programs, such as science, technology, engineering, art, and math education that will make students employable and fuel innovation and job growth, is critical.

Gallo: Santa Barbara would be more resilient, better for more people and certainly have a brighter future if we increase access to opportunity in education, housing and healthcare to a broader spectrum of our community. An overwhelming majority of our first responders no longer can afford to live in Santa Barbara, and they commute every day. With that three-hour commute, how then do you volunteer to coach that little league at five o’clock or go to a parent meeting? That changes your capacity to be an involved citizen. Much more drastic is that, if we were to have a catastrophe in Santa Barbara, we may not be able to get the services of those first responders.

What effects have local or national policy changes had on philanthropy?

Bechtel: Unfortunately, after the Great Recession, charities started drawing down reserves or taking out lines of credit to avoid cutting services. This trend of deficit spending appears to have continued, as reported in The Chronicle of Philanthropy December 2016 issue. We need to be vigilant about each dollar spent, focus on reducing duplication of services, and we must continue to reach out and develop new donors. There is reason to hope. A significant wealth transfer is underway in Ventura County and we need to encourage members of our community to remember to give local.

Gallo: Total repeal or changes to the ACA will definitely have a very stressful effect on the network of care in this community. It’s a shame because this county had been making enormous strides in that area. Santa Barbara Neighborhood Clinics was getting ready to build a new location. It was a tremendous alliance and I just heard last week that it had to be put on hold. When I heard that, I thought that it was the first of the fallout from the changes that are coming. Not knowing — and not knowing when — has already caused a great burden.

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