As a new board member last year, I was surprised to learn that, as a general rule, the community foundation model becomes financially stable when it reaches an asset size of about $150 million. That is, the fees generated from asset management do not cover the overhead costs of foundations managing less than $150 million. The asset size of Central Valley Community Foundation is approximately $65 million. Of the 29 foundations in the League of California Community Foundations, only ten have assets of $150 million or more. The majority of California’s foundations clearly face the same annual challenge we do, that of supplementing fee-generated revenue to cover our overhead costs.
Although CVCF has access to board discretionary funds to cover the shortfall, we have adopted a strategic plan whose central focus is the achievement of a more stable business model. That means growing assets to the $150 million threshold and carefully monitoring expenses during the pursuit. We have chosen a target of seven years to grow our assets to $150 million, all the while meeting or exceeding the present level of services to the community and maintaining prudent reserves.
Success will require the leadership of a talented, savvy CEO with superior fundraising and organizational skills armed with a clear, compelling vision, a carefully vetted strategy and an organization whose day-to-day execution and service are superb. The CVCF board understands these points and is committed to working on all simultaneously. The CEO search has begun and in the meantime the staff and board are refining the steps to a superior customer service culture. There is much to do but the potential community benefits are vast and compelling.
Imagine the possibilities if our Community Foundation asset size matched the $150 million of Sonoma County, or the $320 million of Santa Barbara or the $636 million of San Diego. Not only would our business model be stable, our communities would have millions more for social innovation and charitable services. That is a dream worthy of pursuit and I am proud that the CVCF board has accepted the challenge.