Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/22/2012 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB131 | |
| SB225 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 131 | TELECONFERENCED | |
| *+ | SB 225 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 225-ESTABLISH ENDOW ALASKA GRANT PROGRAM
4:40:37 PM
CHAIR OLSON announced the consideration of SB 225, "An Act
creating the endow Alaska grant program in the Department of
Commerce, Community, and Economic Development to encourage
community development."
4:41:08 PM
SYDNEY SEAY, Staff to Senator Olson, Alaska State Legislature,
introduced SB 225 stating the following:
Endow Alaska sets up a challenge grant or matching
fund mechanism that allows local community foundations
throughout Alaska to leverage private donations from
within their communities by matching donor's
contributions dollar for dollar with state funds.
By providing this tool to help grow the endowed assets
of community foundations, the Endow Alaska program
addresses several objectives. It supports community
self-sufficiency. It recognizes the ability of
community members to identify and respond to local
needs. It creates an additional catalyst for community
conversations about philanthropy and the power of
Alaskans to invest in meaningful local projects and
visions. It also creates an opportunity to take
today's state dollars, which result from the
development of a finite nonrenewable resource, and
turn them into a financial tool that can yield
perpetual returns, potentially supporting local
projects and investments for centuries to come.
Endow Alaska is inspired by a program that was
originally put in place in Iowa. Endow Iowa has since
been established in Kentucky as well. The legislation
envisions a relationship between the state and a lead
philanthropic entity - a statewide organization that
receives an annual lump-sum grant and then turns
around and provides numerous challenge grants to local
community foundations or community affiliate
[organizations].
Presently in Alaska the organization most likely to
qualify as the lead philanthropic entity would be the
Alaska Community Foundation. [It is] a statewide
community foundation with more than 250 funds in
management and assets of more than $47 million, a
nonprofit public charity promoting personal
philanthropy and providing financial management,
strategic development, and donor development services
to communities, organizations, and donors across
Alaska. The program is simple, but the impacts are
potentially profound.
The bill provides some funding limitations to ensure
that community investments are made in diverse regions
of the state. However, because this is a matching or
challenge grant program, the scope of the fund is
necessarily limited by the capacity of donors in
Alaska's communities.
4:44:13 PM
MS. SEAY provided the following sectional analysis of SB 225.
Sec. 44.33.150 establishes the Endow Alaska Grand
program in the Department of Commerce, Community and
Economic Development (DCCED). It gives DCCED the power
to grant state funds to the "lead philanthropic
entity" in Alaska, to be further granted to community
foundations and community affiliate organizations to
build their permanent endowed funds.
Sec. 44.33.160 describes the requirements for an
organization to be qualified as a "lead philanthropic
entity" or a "community foundation" under this
program.
Sec. 44.33.170 describes factors that the lead
philanthropic entity should consider when considering
applications for funding; and describes the community
foundations and community affiliate organizations that
are eligible to receive funding.
Sec. 44.33.80 sets limits on the size and distribution
of Endow Alaska grants, and describes the allowable
administrative fees for the program.
Sec. 44.33.190 provides statutory definitions.
CHAIR OLSON asked if limiting the individual grants to $25,000
would present a problem.
MS. SEAY deferred the question to Ms. Harrington.
4:47:12 PM
Erin Harrington, Staff for Representative Austerman, Alaska
State Legislature, sponsor of the companion bill HB 290, said
the program will be limited every year to the amount that the
legislature decides to appropriate. However, these are challenge
grants, meaning that the community has to raise the entire
amount before it will receive the match. Thus, the real limit on
the program is the capacity of individual communities to do
significant fundraising in any given year.
CHAIR OLSON asked for an example of what these grants should
fund.
MS. HARRINGTON explained that the legislature would make an
annual appropriation to the lead philanthropic entity, which
would then offer challenge grants to local community
foundations. Local community foundations can use the funds
solely to build their endowed permanent funds. She noted that
was on page 1, lines 11-13. Those community foundations can
decide on the distribution of those funds, according to their
spending policies. This provides local control and local
assessment of priorities, which is appropriate for a permanently
endowed fund. The local community foundation may decide there
are child and family needs one year and food assistance another
year. Local control allows that flexibility.
CHAIR OLSON opened public testimony.
4:50:06 PM
SCOTT RUBY, Director, Division of Community and Regional Affairs
(DCRA), Department of Commerce, Community and Economic
Development (DCCED), said that under SB 225 the division would
be charged with administering a grant to a philanthropic agency.
CHAIR OLSON asked if he was aware of any similar programs that
were or were not successful.
MR. RUBY answered that he was not aware of any that involved the
Division of Community and Regional Affairs.
4:51:01 PM
CANDACE WINKLER, President and CEO, Alaska Community Foundation
(ACF), testified in support of SB 225. She stated the following:
The endow Alaska grant program is a pragmatic way to
incentivize and grow individual philanthropy and
invest in Alaska's future. Alaskans understand the
value of endowment, as we are all familiar with the
permanent fund as part of our life, and we recognize
the importance of local control and guidance. Many of
us in the nonprofit and development world know that
Alaska has very low levels of individual giving, and
the concepts behind this bill that utilize state
resources to maximize and grow private dollars will
help build a culture of philanthropy far beyond just
the dollars that it raises.
To give a bit of context to the bill and the work of
the community foundations, I want to tell you about
the Alaska Community Foundation. We are 17 years old.
We hold $55 million in assets and annually we are
granting out between $5-6 million per year throughout
the state of Alaska. Together, over the past 17 years
we have granted about $30 million throughout the
state. We currently have 280 different funds,
including the Alaska Children's Trust. We also have
five regional affiliates in Seward, Petersburg, Kenai,
Talkeetna, and Haines. We also have three partner
community foundations - the Homer Community
Foundation, the Juneau Community Foundation, and the
Arctic Slope Community Foundation. These are
standalone nonprofits, but they have permanent
endowments that the Alaska Community Foundation holds,
in addition to the endowments they hold locally. We
are also more loosely affiliated with the Chugiak
Eagle River Foundation, the Bethel Community Services
Foundation, and the North Star Community Foundation.
We also have at the Alaska Community Foundation,
experience in managing these kind of matching
programs. We have worked in partnership for the past
four years with the Rasmuson Foundation on a project
called the Community Asset Building Initiative where
we have matched about $1 million in local funds to
these community affiliates and community foundations.
It's been a proven and effective method for raising
local funds. In the past four years, collectively they
have raised $4 million for their endowments.
MS. WINKLER said the Alaska Community Foundation generally
supports SB 225, in particular the requirement for those local
foundations to meet best practice standards. With regard to the
five percent cap on administrative fees [Sec. 44.33.180(a)(2)],
she said it was difficult to know whether that was appropriate
since there was no appropriation for the bill.
4:56:26 PM
DIANE KAPLAN, President, Rasmuson Foundation, said this is a
statewide, Anchorage-based family foundation that has been in
business since 1955. She confirmed that the Rasmuson Foundation
has been in partnership with the Alaska Community Foundation for
the past four years to do a similar program. The Rasmuson
Foundation committed over $1 million to match funds for local
community foundations.
She said the Rasmuson Foundation believes this is important
because history shows that for the last 150 years or so the
wealth that individuals have made in Alaska has not stayed in
the state. For example, J.P. Morgan and Samuel Guggenheim made a
lot of money from the Kennecott copper mine, but there is no
legacy to demonstrate that those men ever did business in
Alaska. However, New York City has the Guggenheim Museum and the
J.P. Morgan Library. That is where the wealth from the copper
ended up, not in Alaska.
MS. KAPLAN said the idea of community foundations is to provide
a vehicle for Alaskans to give back to their community. She
noted that a longtime resident recently left $2 million to the
Seward Community Foundation. Without the foundation, those funds
would not have been able to benefit the community of Seward for
time to come.
MS. KAPLAN highlighted that the Rasmuson Foundation just
committed another $2 million to continue its work around the
state and hopes that more communities will participate. She
noted that the communities of Fairbanks, Ketchikan, Sitka,
Cordova, Kodiak, and Valdez have expressed interest in giving
their citizens an opportunity to help endow these communities
over the long term.
CHAIR OLSON asked Ms. Seay if she had any closing comments.
MS. SEAY stated that the program was good and the impacts were
potentially profound.
5:00:00 PM
CHAIR OLSON held SB 225 in committee.
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