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HomeMy WebLinkAboutNB 5 NON-PROFIT FDN 11-02-92ntrr��nn NEW BUSINESS N0. 5 11-2-92 i i Inter -Com \� . DATE: OCTOBER 28, 1992 \ `` To: WILLIAM A. HUSTON, CITY MANAGER ADMINISTRATIVE SERVICES'DEPARTMENT FROM: SUBJECT: COMMUNITY NON-PROFIT FOUNDATION RECOMMENDATION: Pleasure of the Council. BACKGROUND On August 17, 1992 Councilmember Thomas suggested that the City consider creating a general purpose non-profit foundation to which individuals and business could make financial contributions. The concept was addressed during Council discussions regarding the funding of the City's Non -Profit Assistance Program (financial assistance to area non-profit agencies). In the ensuing months, staff has collected information from other municipalities which operate or co-sponsor community non-profit foundations. This report outlines five municipal non-profit foundations in California, identifies their purpose, and summarizes their accomplishments. The City of Brea, La Habra, Rancho Cucamonga, Palo Alto, and San Carlos are the focus of this report. Common to each of these cities is the premise that their non-profit foundation was created to lessen the burdens of government and to promote and support the cultural, recreational, and human services needs in their respective city. In addition, to the common purpose the non-profit foundations share, each staff member stressed the significance of hiring a non- profit corporation Attorney. This individual can 'address specific Foundation and Board member guidelines in the Foundation Bylaws and Articles of Incorporation. All five Foundations interviewed were granted start-up monies by their City Councils which included; non- profit filing fees, contract agreement with a non-profit Attorney, and office supplies. Staff research also concluded that the structure of each Foundation was similar. Four out -of -the five Foundations were located in the City's Community Services Department utilizing existing contacts and volunteers to run their programs. Based on the City of Tustin's current structure, the most logical location for this type of Foundation would be in the Community Services Department. - Page 2 COMMUNITY NON-PROFIT FOUNDATION Should the City Council choose this arrangement, staff does not anticipate the need for additional staff. It should be noted, that the City of Tustin currently operates three non-profit corporations: Tustin Area Senior Center Fund, Inc., Tustin Water Corporation, and Tustin Public Information. The nature of these corporations are outlined in the attached report. Staff has contacted appropriate City Departments and discussed the effects the creation of an additional general purpose non-profit foundation would have on existing fund raising efforts. Staff was informed that the impacts would be minor, in fact, it was suggested the general purpose foundation could be organized is such a manner that individuals could earmark funds for specific as well as general programs in the,City and the Tustin community. The total costs to incorporate a non-profit foundation is approximately $3,100. This figure includes contracting with a non- profit Attorney and State of California non-profit filing fees. JCarter Admi ve Assistant II BAdatlwah COMMUNITY NON-PROFIT FOUNDATIONS The City of Brea: In 1982, the City Council approved a grant to The Brea Foundation for start-up costs. The City currently furnishes them with free office space. The Brea Foundation has a full-time Executive Director, a Secretary, and an Attorney and Accountant on retainer. These positions were originally funded through City payroll and occasionally continue to draw upon the City's financial resources. Members of the Board are ratified by the City Council. The City Manager and City Attorney attend Board meetings as non-voting members. The Brea Foundation is dedicated to supporting and providing funds for Park and Recreation/Cultural activities in the City of Brea. The Brea Foundation is owner and lessor of several parcels of property in the city which creates a flow of income. In addition to' the above mentioned income, The Brea Foundation hosts special fund raising events and has four types of community funds: ■ Unrestricted Fund - non -restricted can be used to meet the most pressing community problems. ■ Interest Fund - support of a particular field that interests the donor. ■ Restricted Fund - specific organization outlined in Endowment. ■ Donor -Advised Fund - Living donors actively involved in selecting which organizations should receive grants from their funds. Projects that are funded by The Brea Foundation include: Brea Theater League, Brea Art Association, Brea Orchestra, Art Galley Exhibits, Art in Public Schools, Art in the Park, Widowed Persons Program, Caring Companions, Equipment for Seniors, Grad Night, Arovista Park Phase II, Tiny Tots, Youth Sports and Helping Hands Scholarships. The City of La Habra.: The City of La Habra has approved three Non -Profit Corporations: The La Habra Theater, Friends of the Museum, and La Habra Camp for developmentally disabled children. All three Corporations were established to fund and operate City Recreation facilities and programs. The City of La Habra primarily functions as the "operator" to each of the Corporations, whereby providing security, budgeting, staff, Page 2 COMMUNITY NON-PROFIT FOUNDATION facilities, and liability coverage. The Community Services staff described their role in the canvass for fund raising as "high profile;" as much as forty -percent of their time is spent on Corporation related matters. Initially, much staff time was spent developing a portfolio to be used to target specific donors within City. In addition to City staff, the Museum Corporation has hired a consultant to assist with soliciting of funds; his salary comes from the non-profit corporation. Of the three corporation, the Museum Corporation has been in operation for the longest amount of time; approximately eight years. Throughout the year each Corporation hosts a special event to recruit new donors. The Theater hosts the annual "Gala Dinner Auction," the Museum holds a "Big Kids Party", and the Friends of Camp has formal and casual dinner parties. In addition, the City of La Habra hosts the annual La Habra Carnival, where non-profit agencies within the City can participate and share in the proceeds of the event (similar to the City's Chili Cook -off). The La Habra City Council appoints each Corporation Board member. The Director of Community Services is represented on the Board as a non-voting member. The City of Rancho Cucamonga: The Cucamonga Community Foundation has been in operation for approximately six years. The Foundation was established to assist in the development of arts and cultural activities in the City of Rancho'Cucamonga. The Board has one annual fund raising event, The "Mayor's Benefit Ball," which raises between $30,000 and $50,000. Since 1988 the Foundation has made many monetary and support awards, including the following: ■ $8,000 to underwrite the Park and Recreation Departments summer "Concerts in the Park" series. ■ $5,000 to sponsor a performance stage at the Grape Harvest Festival. ■ $2,000 to Etiwanda High School for their production of "Cabaret." ■ $1,500 to sponsor an art exhibition by Rancho Cucamonga high school and Chaffey College students at the Business and -Community Expo. ■ $750 to the Chamber of Commerce to sponsor the historical display at the Business Expo. ■ Acted as conduit for a $10 000 donation to the Friends of the Library ■ Acted as conduit to accept funds on behalf of the YMCA Building Fund Drive. Page 3 COMMUNITY NON-PROFIT FOUNDATION In addition, the Cucamonga Community Foundation has a strong commitment to work closely with the City of Rancho Cucamonga to help promote and support recreational and human services sponsored by the City's Community Services Department. In turn, the City of Rancho Cucamonga financially supported the Cucamonga Community Foundation by approving expenses related to tax exempt filing fees and legal counsel for Foundation Bylaws and Articles of Incorporation. The City of Rancho Cucamonga acts as a conduit to accept community funds. However, the Foundation Board members work independently of City staff. The relationship between staff and Foundation Board - members is similar to the relationship staff would have with Council appointed Commissions. The Community Foundation Board members were originally appointed by the City Council to coincide with the terms of each City Council member. However, amendments have been made to have existing Board members interview and makes vacancy appointments. Community Services staff are represented on the Board as non-voting members. The Rancho Cucamonga City Council does not have the authority to remove a Foundation Board member. The City of Palo Alto: The Palo Alto Community Foundation has been in operation for approximately ten years. The Foundation was established to support Parks and Recreational activities within the Palo Alto Community. Foundation funds are not disbursed to outside agencies per bylaws. The Palo Alto Community Foundation hosts one annual event; "The Black and White Ball" which raised $100,000 in 1992. The event is staffed, developed and run by the City's Parks and Recreation Department and community volunteers. In their 1993 proposal, staff has recommended the salary of one Recreation Supervisor come from the Foundation's 1992-93 budget. Community Foundation Board members represent a cross section of the Palo Alto community and are appointed by the City Council. The Recreation Superintendent is represented on the Board as a non- voting member. The Community Foundation relies entirely upon the Parks and Recreation Department for staff support, office supplies, and guidance. Due to current budget cuts, the Parks and Recreation Department has been forced to rely heavily upon Foundation support -- for current and future programs. Page 4 COMMUNITY NON-PROFIT FOUNDATION The City of San Carlos: The San Carlos Senior Center and Friends of the Theater have been in operation approximately one year. Each Foundation operates cooperatively with City of San Carlos and are designed to financially support specific City related programs. The San Carlos City Council approved initial start-up monies to each Foundation. The City continues to support each Foundation by providing office supplies, office space, and staff support. The San Carlos Senior Center Foundation was established because the San Carlos Senior Citizen Advisory Committee was not in a position to solicit for funds and thus, the City required another funding avenue to maintain service levels at these two facilities. Both Foundations interact with the City Attorney, City Treasure, and Finance Department to conduct business. The Community Services staff reported that approximately twenty -percent of their time is spent on Foundation related issues. The.Director of the San Carlos Senior Center approves the selection of the Senior Center Foundation Board. Existing City of Tustin Non -Profit Corporations: Tustin Area Senior Center Fund, Inc: The purpose of this Corporation is to support the Tustin Area Senior Center (TASC) and its mission. In addition, they solicit for funds to provide the Senior Center with necessary improvements and additions. Board members include two members from the City Council, the City Manager, and two representative from the Senior Center Steering Committee; Board members meet on an as needed basis. Current actives would not be affected by the creation of a general purpose non-profit foundation. However, staff recommends the general purpose foundation have a mechanism for channeling funds for specific programs. Tustin Water Corporation: The purpose of this Corporation is to finance acquisition of the Tustin Water Works Company and improvements to the water system now owned by the City. Tustin Water Corporation would not be affected by the creation of a general purpose non-profit foundation. Tustin Public Information: A Foundation created to allow the City to receive non-profit mailing status with the United Postal Service; would not be affected by general purpose foundation.