The Marin Community Foundation: An experiment in philanthropy

07/26/2012

The Marin Community Foundation, the dominant force in funding Marin County’s social sector, turns 25 this year. Its development—from its early days when it took over the Buck Trust from the San Francisco Foundation, to the supportive role it played for nearly all the county’s nonprofits, to its recent decision to withdraw much of that support in order to hone in on specific initiatives—offers important lessons about the limits and promise of private philanthropy. Can the private sector compensate for the loss of government support? This and other questions will be discussed in a series of columns dedicated to the foundation’s history, accomplishments, plans for the future and impacts on West Marin.

The Marin Community Foundation was born almost as an afterthought. Before Beryl Buck died in 1975, she stipulated in her will that the entire annual income from her trust be used exclusively for nonprofit purposes, providing care for the needy in Marin County.

Her attorney placed distribution of trust funds in the hands of the San Francisco Foundation. Nearly everyone involved was surprised when the Buck Trust’s assets, principally oil company stock, quickly mushroomed to more than a quarter of a billion dollars, largely because of the oil crisis of the late 70s. The trust continued to grow over time, and today is worth over $750 million.

Founded by the Levi Strauss family to address post-World War II urban crises in the Bay Area, the San Francisco Foundation had little interest in affluent, largely rural Marin. After a half-hearted attempt to comply with Mrs. Buck’s directive, the foundation decided to break the terms of the will in order to make grants to other Bay Area entities. It wound up in a legal battle with Marin County dubbed “the Super Bowl of probate.” After a humiliating defeat in court, the foundation resigned and turned the Buck Trust over to the Marin Community Foundation (MCF).

This was not the end of the trust’s difficulties. The appointment of Douglas Patino as MCF’s first executive director was a promising beginning—he was the first Latino to head a major foundation in California. But Mr. Patino quickly became embroiled in an in-house power struggle, and he left after three years. In addition, the Buck Trust’s most ambitious project, the Buck Institute on Aging Research, triggered more criticism and litigation.

The foundation’s next executive director, Steven Dobbs, believed that his primary goal, in his words, was “to make the foundation boring.” He was exceedingly successful in doing so.

Although Marin is one of the wealthiest counties in the United States, it was fiscally conservative at the time the trust was founded and county public services were sparse. The passage of Proposition 13 in 1979, which froze property taxes, limited local government support for programs even further. Funds from the Buck Trust became available at exactly the same time the property tax freeze went into effect, and both the San Francisco Foundation, and later MCF, gave much of the income earned by the trust to existing and newly created nonprofits. Some of the grants were ridiculed, such as one to support the Bolinas Community Bio-Dynamic/French Intensive Garden School, but, for the most part, both foundations supported private programs that substituted for services often provided by the government.

Nevertheless, substantial dissatisfaction was registered by county officials who believed that the trust should be used to supplement government agencies and activities. Some leaders in the nonprofit sector called the grant-making process erratic and undependable, and yet others thought the Buck funds were not being used to create high-impact programs. As MCF’s president, Mr. Dobbs did little to stanch these criticisms.

The foundation slowly began to change when Dr. Thomas Peters, the current executive director, was appointed 14 years ago. Dr. Peters had a long career as a public health and social services administrator, and had served for seven years as the director of Health and Human Services for Marin County. He understood the structure of county services and grasped the intricacies of local politics. He was determined to prevent MCF from becoming an adjunct, “shadow” government for Marin.

When Gary Giacomini joined him as a member of the board of trustees in 2003, the changes in the foundation accelerated.

Mr. Giacomini had a long history of involvement with the Buck Trust, first as a member of the Marin County Board of Supervisors, where he was the most prominent spokesman against the San Francisco Foundation’s effort to break the trust. On his kitchen table, he and then county attorney Douglas Maloney drafted the lawsuit’s settlement that would transfer the trust to the Marin Community Foundation. Once the money was safely in the hands of MCF, Mr. Giacomini became an outspoken critic of the foundation—for two reasons. He felt it was not sufficiently responsive to county supervisors, and that it failed to do “big things.”

Three changes have since reshaped the Marin Community Foundation. In 2009, MCF’s board of trustees adopted a strategic plan that concentrated on the following initiatives: increasing affordable housing, ending the cycle of poverty, closing the education achievement gap and preventing climate change. Partial funding for these initiatives was the result of a second decision, to reduce the general level of ongoing support for many existing community agencies. For some, all funding was terminated; others received smaller grants.

The foundation has also received a growing amount of money from sources besides the Buck Trust. Dr. Peters has relentlessly pursued a strategy to encourage wealthy Marin residents to use the foundation as a vehicle for their philanthropic interests. The foundation proudly reports that it is now the agent for the management of more than $450 million above and beyond the income from the Buck Trust. Many of the new funds are donor-advised. Although legally the foundation has the final say in how to distribute funds, Dr. Peters emphasizes that he and his staff work closely with donors to assure that their wishes are observed to the greatest extent possible.

These new donor-advised funds have enlarged both geographic boundaries and flexibility in choosing potential targets for MCF grants. It is important to Dr. Peters and the board that MCF is not solely identified as a conduit for the Buck Trust—this is apparent in the foundation’s annual reports. The most recent report for 2011 includes 72 pages enumerating hundreds of grants made by MCF. In each instance the report lists the recipient organization, the amount of the grant and the names of the donor funds. The amount that each individual fund donated to a specific grant is not included.

According to Dr. Peters, this was not an oversight. He does not want invidious distinctions made between donors. In instances in which there is a single donor who funded a grant it is possible to determine the amount a particular fund has given. But in many cases, especially for larger grants, there are a number of donors. In terms of the Buck Trust, it is impossible to get an accurate picture of how much of its money is dedicated to most grants. This makes it more difficult for the public to understand how the Buck Trust funds are allocated, but it serves to reduce the potential for controversy.

One indication of the success of efforts to expand MCF’s reach and end the battle over the Buck Trust is the decision by Peter Strauss to establish a donor-advised fund at the foundation. Mr. Strauss, a member of the Levi Strauss family, was a member of the San Francisco Foundation’s governing body when it capitulated at the end of the “Super Bowl of probate.”

Though Dr. Peters and his staff have done a great deal to reduce the impact of the early struggles over the Buck Trust, scars still exist. At the time the trial over the Buck Trust was settled, the judge appointed a special master to keep a close watch over the trust; 25 years later the position still exists. The current special master is Gary Strankman, a retired presiding justice of the California Court of Appeal. Mr. Strankman regularly attends MCF board meetings, and the court holds an annual hearing and reviews his report. The Buck Trust pays him a substantial yearly stipend for his services.

Critics argue this is an unnecessary expense, and that the money would be better spent on the needy of Marin—as Mrs. Buck wished. Dr. Peters responds to this critique in his characteristically careful and politically sensitive manner: “Do I need a special master to tell me whether or not I need to make sure that Dr. and Mrs. Buck’s money as to their will is spent appropriately?” He asks. “No, I don’t need that.” But, he adds: “Justice Strankman is a most thoughtful, intellectual partner to have. He’s a real resource to think through the issues. He and the court have been most supportive of our reach well beyond Dr. and Mrs. Buck’s family and played a key role in supporting our efforts to attract other donors…”

All told, the Buck Trust has doled out more than $1 billion. After 25 years of stewardship by the Marin Community Foundation, it is time to ask how successful it has been in meeting the Bucks’ challenge of providing help for the needy.