PURPOSE

The purpose of this report is to seek input and approval from City Council to work with the existing Burbank Community Foundation (hereafter the �BCF�) to reconstitute its by-laws and enter into an agreement whereby City of Burbank staff would take a lead role in managing the BCF. 

BACKGROUND

In 1999, the Burbank Chamber of Commerce�s Board of Directors proposed the creation of a non-profit organization to function as the charitable arm for the Chamber. After several discussions amongst interested board members, the BCF was incorporated as a non-profit on May 11, 2000.  Although the Burbank Chamber of Commerce and BCF remain separate entities, Chamber board members also sit on the BCF board.  In addition, Chamber staff occasionally provides administrative and logistical support to BCF events and programs, as well as encourage Chamber members to make charitable contributions to the BCF.

The BCF�s mission is to support and advance the educational, cultural, and economic interests of the Burbank community.   The BCF accomplishes this goal by providing a scholarship program for high school seniors interested in vocational careers.  Since its incorporation, the BCF has also sponsored a few non-profit programs such as the YMCA�s Healthy Kids Day and Shakespeare at Play for grammar school children. The funds for these projects can be largely attributed to contributions from BCF board members, occasional solicitations of board members to individual donors, local corporations, and grants from foundations such as the Sence Foundation.  The Sence Foundation, located in Visalia California, funds organizations throughout California in the areas of education, at-risk youth, and health.

Over the past year and a half, City staff, the current BCF board, and various Executive Directors of Burbank non-profit organizations have been meeting and discussing options for reconstituting the BCF. The goal of a reconstituted BCF would be to expand the donor base of the organization and help the BCF create greater, more engaged private, public, and non-profit partnerships, which will provide stronger financial and in-kind support for the social service infrastructure of the community.  On November 1, 2005 staff presented City Council with a staff report and draft agreement between the City and the BCF.  During that meeting, Council had some important questions and asked staff to return with additional details on how a new or expanded board would be formed, and how the revamped BCF would be generally structured and operated.  Council also asked staff to gather information and feedback from cities such as Anaheim on the success of their community foundations and what, if any, issues have arisen and how they have been resolved.

As mentioned, City of Burbank staff and the existing BCF Board of Directors have had several discussions about a proposed partnership between the City and a reconstituted BCF. In staff�s meetings with the BCF board, discussions focused on revisions to the bylaws, board representation, and safeguards in the development of an equitable system of contributions, grant opportunities, and awards.  These meetings provided staff with some key insights into how the BCF currently operates and the philosophy of the BCF with respect to board representation and mission.  In addition, Community Development Department staff met with key members of various departments (City Manager�s Office, City Attorney�s Office, Burbank Water and Power, and Parks, Recreation & Community Services) to discuss the necessary components of a potential partnership between the City and the BCF.  Consequently, the discussions assisted staff in formulating draft by-laws to address both the need to raise funds and how to provide a system that will protect the potential donor trust in the organization and its goals.  Equally important to this process, staff met with some of the key non-profit organizations in Burbank (Family Service Agency, Boys and Girls Club, Burbank Temporary Aid, and the YMCA) to receive pivotal insight in the areas of grant award administration and ways of insuring equitable and fair treatment for all eligible Burbank non-profits. The result of these meetings, discussions and research is before you tonight in the form of a draft set of by-laws and updated draft agreement for a reconstituted BCF (both the draft by-laws and updated draft agreement are attached as Exhibits B and C). 

ANALYSIS

The valuable information gathered at the aforementioned meetings was essential in developing a framework for the reconstituted BCF.  This framework includes a draft mission statement, draft BCF by-laws, and updated draft agreement, which reflect the proposed partnership with the City. The BCF�s mission statement is here-in proposed:

The mission of the Burbank Community Foundation will be to strengthen and advance the values and interests of the Burbank community by: spearheading efforts to build healthier and more empowered communities, creating strong public, private, and non-profit partnerships, establishing opportunities that promote long-term giving; and supporting a strategic vision for development and sustainability in the non-profit sector.

In addition to a strong mission statement that will guide the BCF�s efforts, the draft by-laws will establish clear regulations for both the BCF and the City of Burbank.  These by-laws will provide the basic rules of conduct for the organization�s business operations and other affairs.  In addition, both entities must approve a formal agreement that will detail the roles and responsibilities of each entity and their partnership. The City�s proposed main function will be to develop increased local fundraising programs.  These programs will create a variety of opportunities for City employees and the community at large to contribute to Burbank.  The BCF�s main function shall be to provide oversight over BCF policy and fundraising activities through its Board of Directors.  The BCF shall retain direction and control of allocations to programs and services, as well as the selection of recipients to receive program funds.  It is important to note that the BCF was to be a small community-run organization managed by the Board of Directors and had not intended to include the position of an Executive Director.  To date, the BCF has not conducted public fundraising or implemented any formal donation programs. Nevertheless, the BCF board has, over time, considered expanding the scope of their fundraising and giving program.  Through active discussions, it determined that the increased overhead costs of such a program would create a significant financial burden and, in at least the short-term, affect their ability to support their ongoing giving projects.  

Staffing and Proposed Composition of BCF Board of Directors

As outlined in the draft by-laws and updated draft agreement, staff from the Community Development Department shall serve as the Executive Director of the BCF.  The City Manager or designee will assign Financial Services staff on an as needed basis to ensure adequate financial controls for all donations and grant awards. The City Manager may also assign additional staff for administrative support.  The Executive Director and any assigned staff would remain City employees, report to the City Manager, and be provided to the BCF at no cost.  The number of employees and hours per week that these employees devote to the BCF shall be subject to the approval and discretion of the City.  Office space, equipment, and supplies shall be provided at no cost to the BCF and any administrative costs shall be absorbed via the Community Development Department�s budget.

As per the draft by-laws, the Board of Directors shall consist of no less than five but not more than fifteen individuals. Members of the Board of Directors will be volunteer positions with no membership fees or annual dues.  Every board member shall have a clear role and identified strengths and qualifications for contribution. They shall include individuals from both the private sector and public sector that all times during the life of the corporation shall attempt to fill a diverse and representative template of community stakeholders.

The Burbank City Manager would appoint three members to the Board of Directors but will not determine the initial term of those members. The City Manager will retain the absolute authority to unilaterally decrease that number and/or to unilaterally terminate the participation of the City, at any time, without requiring a vote of the Board of Directors.  Should the City Council decide to, they may appoint six members to the first Board of Directors as well. The by-laws, as proposed, will provide that these six voting directors must demonstrate an interest in Burbank and must be representative of the following fields: law, small business, corporate business; community groups such as senior service groups, union or labor groups, youth services groups, arts and social services agencies, neighborhood leaders, or community residents. The six remaining positions are for the existing BCF Board of Directors to continue on the board if they so choose. The directors of the initial board may fill any vacant positions if the board consists of less than fifteen members. In addition, any reduction of the total number of seats will require an affirmative vote by more than 3/4 of the board members then in office.  After the first year, directors will be voted onto the BCF board on an annual basis. The board shall by motion determine the initial term of each director after conducting a lottery.  The lottery shall determine which voting directors will have an initial term of one year; which voting directors will have an initial term of two years; and which voting directors will have an initial term of three years.

Charitable Giving Programs

The BCF shall establish charitable giving programs within the City and in the private sector, to help serve the fundraising needs of the service-providing and non-profit community.  The initial programs will be enduring and shall establish the BCF as a success charity:

Employee Payroll Deduction Program

This program will initially be available to City of Burbank employees only. It is easy to administer and operates similar to any other deduction on a paycheck.  City employees can sign-up for a payroll deduction at anytime during the year.  New employees can be provided with information during employee orientation or when the new hire signs other human resources forms. Once an employee signs up and determines a monthly donation amount (and if interested a designated organization), the Payroll Division within the City�s Financial Services Department will administer the deduction.  The employee�s donation will be reflected on the paycheck stub. Participants may also contribute without designating a specific granting organization. Once a year, the donor shall have the opportunity to recommit for an additional year and if interested change the donation amount and/or the BCF fund chosen.  Fund options will be discussed further in the report.  When this program is successful within the City, the Employee Payroll Deduction Program will be marketed to interested businesses in the community through an agreement established between the BCF and the participating business.  

Utility Bill Contribution Program

This utility customer (residential and commercial) opportunity will allow Burbank residents and business owners to donate to the BCF via their utility bill.  Burbank Water & Power currently offers a similar program for customers to contribute through their utility bills.  Project Share assists low-income BWP clients by providing up to $100 credit on their utility bills based on income qualification.  Donors make one-time or recurring contributions to the program and Burbank Water & Power together with the Burbank Temporary Aid Center work to ensure that the funds go to where they are needed the most.  The BCF would like to develop a similar utility customer contribution program based on the Project Share model. Another method that should be explored, �Round Up for Charity�, would offer customers the option of rounding up their total utility bill to the nearest dollar.  For example, if a customer�s bill amounts to $53.52, that customer may decide to round up and contribute the 48-cent overage to the BCF.  This would allow customers to make a one-time donation by adding it to their utility balance.  Ideally, the utility bill would list BCF funds on the back of the statement for donors to choose where their contributions could be directed. Otherwise, the donations from the utility bill would go directly into the undesignated fund.  For this program, Burbank Water and Power utility bill inserts could be used for marketing purposes as well. 

The City�s Financial Services Department is knowledgeable in workplace giving programs thanks mostly to national organizations such as the United Way.  Staff�s background in managing charitable giving programs will certainly be an advantage towards the BCF�s initial and progressive success.  As the BCF becomes a successful charity, the Board of Directors and staff may also consider expanding the charitable giving programs and offer other planned giving opportunities such as bequests/wills, investments and securities, real estate, and others.

Eligibility Criteria for BCF Funding

Interested non-profit organizations must meet certain criteria to be eligible for BCF funding. Eligible organizations must be legal entities and preferably already established 501(c) 3�s. The organization must be Burbank-based (physically located in Burbank) or serve a significant amount of Burbank residents.  The Board of Directors shall create the criteria for qualifying an organization as �Burbank-based�, but the specifications will be defined based on service to Burbank residents. �Start-up� organizations could be eligible and request funds from the BCF to help build into a 501 (c) 3, not-for-profit status organization.  Requested funds must be used by organizations within one year of the request.  Once the pattern of giving and resources are established, not only would multi-year funding be an option for the BCF, it may be encouraged for larger projects, capital requests, and long-term programs.

BCF Funds & Allocation Process

Making a difference through the BCF will be both a convenient and rewarding experience.  First, the donor must decide which BCF charitable giving program to contribute to.  After that, donors must make the important decision as to which BCF fund to allocate their contribution(s).  A fund is a supply of money that is designated for a specific purpose.  For the BCF, funds shall be established for charitable purposes.  The three principal funds made available through the BCF are: pre-designated funds, un-designated funds, and an endowment fund. Of course, every donor has different interests and perhaps a favorite charity in mind.  Thus, each designation made through the BCF will be unique depending on the donor�s preferences. 

A pre-designated fund supports specific charitable organizations named by the donor at the time the gift is made.  As described earlier, to be eligible for pre-designated funds, charitable organizations must meet certain criteria.  Organizations must submit an application before entering into a sponsorship agreement with the BCF. The application form may include pertinent questions regarding an organization�s mission, budget, current funding sources, staff and board composition, and contact information. A sponsorship agreement delineates a partnership between the BCF and the non-profit applicant.  The agreement resembles a contract where the applicant must assure the BCF about its use of funds for the specific project at hand.  Upon review, if an application is accepted and the Board of Directors executes the agreement, organizations shall receive pre-designated fund contributions for its organization. 

Donors can also contribute to an un-designated fund, which would be distributed through a grant allocation process on a yearly basis.  Un-designated funds shall provide grants to projects that positively impact the mission of the BCF.  As proposed, the Burbank Community Foundation would utilize a Request for Proposals (RFP) process to distribute undesignated funds. An RFP process allows interested organizations the opportunity to submit a detailed proposal describing their specific need(s), project, expected budget, and other pertinent information to the BCF for consideration.   A proposing organization shall be encouraged to review BCF guidelines and priorities to determine if its mission is consistent with the BCF�s purpose and if it meets the criteria for funding before it submits a grant proposal application to the BCF�s Executive Director.

The Executive Director and Board of Directors shall review grant proposal applications and make final determinations for funding on an annual basis. They will evaluate the proposals based on several factors, including, but not limited to: timeliness of application, program description, population to be served, the proposed use of funds, and service-provision capacity of the proposed organization. For new organizations, start-ups and expanded program proposals, selection criteria would consider the experience of the proposed service providers to evaluate the capacity of the organization.  Application status can be made via telephone, email and by mail. As currently envisioned, funding will be provided prospectively at the time the Board of Directors determines the final allocation of grant awards. Organizations with eligible proposals will be invited to meet with the Board and Executive Director for a brief presentation especially if additional clarification is needed.  Requests for funding will be considered once a year.

Among other potential options, it is staff�s recommendation that undesignated funds be distributed for the following purposes: on-going program support, new program development or expansion of an existing program or service, a one-time specific event, administrative costs including payroll, other costs, and/or capacity building. Capacity building is defined as actions that improve an organization�s effectiveness and ability to work towards its mission, such as grant seeking opportunities, grant writing workshops, fund raising development, leadership and staff training.  Utilizing funds for these purposes is a priority because they would be used to assist non-profits and other groups become stronger organizations. The BCF Board of Directors may choose to allow a small percentage of undesignated funds to be used the market the BCF.  This may help the work of the BCF by encouraging additional employers and employees to participate and to seek additional funds from national foundations.

The last fund, an endowment fund, will be used to build a sustaining mechanism for the BCF.  The purpose of the endowment fund will be to supply monetary funds in perpetuity for the benefit of the Burbank community.  Many schools, churches, and other non-profits maintain endowment funds as well. 

After year two, if the BCF is achieving the vision of the Board and the City, the BCF will be encouraged by Community Development Department staff to consider creating a donor-advised fund, where the donor may select to contribute funds for a general category such as youth, seniors, emergency assistance, healthy living, etc.  This option would only be considered after a couple of years of successfully conducting the grant allocation process for undesignated funds to ensure that the BCF has established a pattern of success for awarding and overseeing grants.

Best Practices

During the November 1, 2005 City Council meeting staff was also directed to do additional research on key community foundations.  Staff found that other cities in California such as Anaheim operate successful community foundations.  These foundations are successful because they provide both a local resource for giving as well as a local focus on funding important priorities. They also help insure locally controlled and monitored accountability. 

Similar to the proposed BCF, the Anaheim Community Foundation was established to provide individuals and businesses opportunities to make charitable investments that directly benefit the community.  Currently, the Anaheim Community Foundation has 18 board members including its Chief Executive Officer who has worked for the City of Anaheim since 1973 and is currently the Director of the Community Services Department.  The rest of the board is composed of other city department managers, lifelong community volunteers, members of the business and educational communities, attorneys, accountants, and active residents.  It is evident that the Anaheim Community Foundation�s recruitment of members who are representative of the community, is a contributing factor of the Foundation�s achievements.  The BCF proposes to establish a board with comparable membership.

However, unlike what is envisioned for the BCF, most of Anaheim�s funds and charitable giving programs support city projects and programs.  A large part of their funds are designated to projects and programs that the City of Burbank already administers, or are for community needs which our non-profit community is already meeting or attempting to meet.  For example, the Anaheim Community Foundation created and currently manages an emergency assistance program that serves Anaheim individuals and families in need of assistance by providing much needed food, lodging, and transportation at a moment�s notice.  Funding for this program is supplied through a utility bill contribution program that mirrors the charitable giving program proposed for the BCF entitled �Helping Hands�.  In Burbank, the Burbank Temporary Aid Center provides these valued services to the community.   The BCF does not want to duplicate efforts, as one of its goals is to support existing programs of organizations such as BTAC and potentially help them expand.  The Anaheim Community Foundation also established a volunteer recognition fund that helps salute the efforts of businesses and volunteers who help make Anaheim a better place to live. Burbank already coordinates recognition events for volunteers throughout the year.  A few examples include the RSVP (Retired Senior Volunteer Program) recognition luncheon, volunteer commendations presented at Council Meetings marking the importance of outreach and involvement, and future CONNECT city-wide volunteer appreciation events.  Also similar to what is proposed for the BCF, the Anaheim Community Foundation has an un-designated fund and an endowment fund used to build a sustaining mechanism for their foundation.

Additionally, staff began to research the Greater Long Beach Foundation to ultimately discover that this foundation�s leadership, structure, and operations do not share commonalities with the proposed mission, management, and programming for the BCF.  Initiated in 1996 by the Estate Planning & Trust Council of Long Beach and local community leaders, the Greater Long Beach Foundation was created in collaboration with the California Community Foundation.  Jeffrey Worsham, the Executive Director, and a group of ten volunteer advisory board members lead the Greater Long Beach Foundation.  Unlike what is proposed for the BCF, considerable allotments of the Greater Long Beach Foundation�s funds go towards supporting public safety projects such as disaster preparedness and youth outreach, which the City of Burbank already successfully manages.  In addition, the highest priority of the Greater Long Beach Foundation is to serve the donors who wish to preserve their philanthropic legacy in their own community.  Unlike the Greater Long Beach Foundation, the BCF shall not only prioritize the tailoring of giving programs for donors, it would insure fair treatment for all eligible Burbank organizations, and provide opportunities for growth in the non-profit sector.

Although these foundations do not entirely set applicable patterns for the BCF and for the Burbank community, staff did receive some interesting insights from the Anaheim Community Foundation Executive Director.  Executive Director Terry Lowe feels that one of the biggest challenges facing a city-administered foundation is the initial (and often-times continued) perception that the organization is too closely aligned with the city.  Possible contributors may not want to give to a group so closely connected with a governmental entity for several reasons including political perceptions and fund distribution issues.  Mr. Lowe believes his foundation has overcome the early skepticism by creating a strong collaboration with an independent board and gaining the trust through performance with key community stakeholders.  Volunteerism is promoted and nurtured within and outside the organization, the foundation is fiscally responsible, and they make sure all donors know that their money is going back into the Anaheim community.  Mr. Lowe strongly supports the notion that a representative and committed board of directors can create, sustain and lead a fair and equitable organization.  He feels that good board members are men and women, who truly believe in the organization�s mission statement, are willing to work towards the organization�s goals, are donors, and are ready to recruit additional donors.

Every community is different. If approved, the Burbank Community Foundation will seek to serve Burbank�s diverse needs and a unique spectrum of service-providing organizations. In some respects the Burbank Foundation will follow patterns of other community-based foundations; in other respects it will create its own model. 

Next Steps

Based on Council's direction and approval, staff will go back to the existing BCF board to complete agreement negotiations.  AT the conclusion of infal negotiations, BCF leadership, including city staff, will continue efforts to reconstitute the BCF.  Staff recommends that the newly reconstituted BCF complete several general yet key objectives in its first year:

• Begin operations of the BCF managed by the City of Burbank under an agreement approved and supported by the City Council.

• Establish a strategic vision for BCF and its Board of Directors.

• Begin marketing the BCF name and mission through a campaign.

• Establish an outreach and marketing program for potential key business partners.

• Enter into partnership agreements with City�s �primary� non-profits.

• Implement the Payroll Deduction Program within the City of Burbank.

• Implement the Utility Bill Contribution Program through Burbank Water and Power.

• Conduct a successful grant application process for undesignated funds, and establish a pass-through process for pre-designated funds.

In addition, to help guide the success of the organization, staff will recommend that the BCF board and Executive Director establish a firm action plan that highlights the aforementioned key objectives and details the initiation and progress of its charitable giving programs and marketing campaign.

FISCAL IMPACT

As per the draft by-laws and updated draft agreement, no new staff is recommended to administer the BCF.  City staff shall administer the BCF, but this would only be a part-time responsibility.  The draft by-laws and updated draft agreement also propose three City positions (appointed by the City Manager) to serve on the Board of Directors.  These positions shall be volunteer, unpaid positions. Office space, equipment, and supplies shall be provided at no cost to the Foundation and shall be absorbed by the Community Development Department budget. 

CONCLUSION

In the simplest of terms, the Burbank Community Foundation can help individuals who are looking for ways to contribute to the Burbank community, but don�t know how. Oftentimes, giving is limited because of the skepticism of not knowing where the money goes or because of high overhead costs of national organizations.  Furthermore, potential donors may be more willing to give if charity dollars stay locally.  The BCF is and will be managed, administered and overviewed by community leaders with a strong history of civic involvement.  In addition, it will not have administrative overhead.  Thus, every dollar given will be spent locally, and if designated by the donor, on their identified organization. Contributors will have the opportunity to see the difference their money makes through a variety of worthy programs. Whether donations are large or small, the synergy of a locally based, operated and controlled program will help meet all-important community needs and help support the BCF mission.  

Charitable giving enhances reputation and standing in the community and provides a common purpose for donors.  Many Burbank employers, private businesses, public agencies and individual donors, achieve their charitable goals through organizations such as the United Way or other national foundations and encourage their employees to do the same by providing opportunities through payroll deductions. Funding from programs such as the United Way will affect potential BCF funding, but it is the goal of the Burbank Community Foundation to offer an additional option for enhanced community donations and thus increase, rather than substitute, for existing volunteer and charitable giving.

If approved, the BCF would join in the legacy of community foundations and create an additional platform for building a healthier community.  The BCF will gain trust through performance as a result of flexible donor programs, local emphasis and roots, strong collaborations with key community stakeholders and organizations, and a representative and dedicated Board of Directors.  Together, these factors promote a solid and innovative organization that shall accomplish the goals set by its mission and directly benefit the Burbank community it was developed for. Furthermore, these important factors will move the Burbank Community Foundation from a small community-run organization into a charitable giving organization that shall have the ability to anticipate and communicate future challenges.

RECOMMENDATION

Staff recommends that the City Council provide input on the proposed reconstitution of the Burbank Community Foundation and approve its accompanying draft by-laws and updated agreement. 

LIST OF EXHIBITS

Exhibit A - Original Burbank Community Foundation By-laws

Exhibit B - Restated Draft Burbank Community Foundation By-laws

Exhibit C - Updated Draft Agreement

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