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Solid foundation Featured

8:00am EDT January 30, 2004
The Columbus Foundation President and CEO Doug Kridler is determined to spread the word about the organization's mission and its value to the community.

"The vast majority of people in this region aren't fully aware of the myriad ways the foundation can work for them," says Kridler, citing the common misconceptions that the foundation is a fund-raising organization and that it is only for the use of the wealthy.

"It takes just $10,000 to set up a fund," Kridler says.

To battle these misconceptions, Kridler has tightened the focus of the organization and placed a new emphasis on the donor.

"Before I came, no one could tell me what business the foundation was in, in a short concise manner," he says.

One of the first things Kridler did as the leader of the organization was to develop its mission statement: To assist donors and others in strengthening and improving the community for the benefit of all.

Kridler also renamed some departments to better reflect the organization's new focus. For example, prior to his changes, those assisting potential donors were called advancement officers.

"That sounded to me like, what can you do to help us, instead of us helping you," Kridler says, so the name was changed to the more appropriate Donor Services.

Another challenge Kridler has faced was maintaining the Foundation's $700 million value during the weak economy of last few years. Kridler says the foundation's funds have lost less than 10 percent of their value, much less than those of other large national foundations. The foundation's investment strategy --diversifying its asset classes and offering shares of closely held companies, limited partnerships and real estate -- has paid off.

"Nine out of 10 national foundations lost money in the last two years," says Kridler. "We did better than eight of those nine."

Smart Business spoke with Kridler about increasing awareness of the foundation and the challenges of managing the organization.

How has growing the foundations value been a challenge the last few years, and how did you meet that challenge?

The decline of the stock market has been an enormous challenge when it comes to appreciating securities. Now the market is improving, but it's not at the point it had been back before the economy's decline. There aren't a lot of dynamic opportunities.

We adjusted to find asset classes that maintained value. We made the transition into real estate, which also offers robust tax advantages, partnership interests and shares of closely held businesses. That's one of the virtues of the foundation -- the ease with which it can handle these kinds of gifts. It's inherent in our structure.

People hear we are valued at $700 million and think, 'They're way out of my league.' There is a lack of awareness that we work with donors of all sizes to encourage, create and add value to charitable giving.

In 2002, nine out of 10 of the largest foundations in the country lost money. Our track record of preservation of capital is very strong. Our philosophy is that, in essence, we would rather give up $1 on the up side in exchange for not losing $1 on the loss side. Our conservative portfolio is about preservation and growth, not just about growth and nothing else.

Are you looking at new ways to increase awareness of the foundation?

Not many people are aware that they can give gifts of real estate, partnerships and closely held companies, so to the public it might appear that we have identified new ways to give a gift.

But we haven't invented a new product. We tend to stay with tried and true vehicles. A person may not have a lot of cash to give, but a portfolio with significant real estate that can be converted into charitable assets.

The first thing we do is make sure that the adviser community is aware of what we do. A lot of people have a legal or financial adviser, a respected professional. We make that community aware of the diverse opportunities we can present.

Secondly, we do some direct mail pieces, and lastly, we do some marketing and advertising, but we don't have a large budget for that.

What are your biggest operational challenges and how do you meet them?

There are always greater efficiencies achieved through technology. The foundation is ranked seventh in the nation for the dollar amount of gifts received, and 12th when it comes to expenses. We try to keep our operating expenses low.

The challenge is to see where we can invest in technology to make us even more efficient, to see what technology we can invest in that we can afford without raising our management expenses beyond what's appropriate.

The community foundation field is not big enough nationally to be attractive to software developers, so we are coming together as a group to aggregately develop software that can give you daily valuations of your funds instead of monthly; and process grant requests.

Currently, we batch them and they are processed the next business day, and with multiple hands touching the process, it adds to the expense along the way. That is our biggest operational challenge.

What areas/processes are you working to improve?

Externally, demystifying the foundation, helping people understand how we work and how we can work for them. We are so happy and proud of our successes. The foundation works well for the community.

However, there's still an enormous improvement we can make to help people understand that we are not the exclusive province of the wealthy by any stretch of the imagination.

One way to meet that challenge is to be very clear and specific about what your mission is and what defines your success and distinguishes your organization. We have done extensive work in that area. One of the things I heard that sealed the deal for me to come here was the answer to my question to the governing committee -- 'What business is the Columbus Foundation in?' I got a long list of what they wanted to do.

You have to be able to answer that question clearly and simply before you can be disciplined and focused in strategic planning or presentation to the public.

I started there, then we looked at department names. Some department names undermine the welcoming feeling we want donors to have. First there is a fund-raising element to the names and terms like development and advancement.

Then we say look at our Web site and talk to an advancement officer. That's just one more step in the confusion. The arrow comes from you to us. We reversed the arrow, and now we have a department called donor services; we're here to add value to your hopes and goals and build a more vigorous community, and it all starts with the customer.

What are your biggest personal challenges in running the organization?

Time. This is a much more dynamic organization than people think. There is great fulfillment in working here, and I want to work as hard as humanly possible. There are no limits to what one can give and still come up short.

I spend seven days a week here and I am energized by that, but I am still finding it difficult to have enough time to do all that I can do.

There are always needs in the community. Complex problems are not solved easily, and it takes thoughtful research, patience and investment solutions. I have always been intrigued how mature professionals are careful to watch expenses and shop right, build and maintain wealth, but are so carefree, with little diligence when it comes to charitable and social investing.

It takes due diligence, which is another advantage of the foundation. We do the research, and we know how charitable and social organizations in Columbus work.

How to reach: The Columbus Foundation, (614) 251-4000 or www.columbusfoundation.org