The nouveau riche and old money often turn up their noses at one another. But community foundations created by the recent spate of hospital buyouts may be willing to avoid such snobbery.
That at least appears to be the case in Denver, where the 2-year-old Rose Community Foundation is seeking an alliance or possibly even a merger with the Denver Foundation, 70 years its senior. The former was endowed to the tune of $180 million when Columbia/HCA Healthcare Corp. bought 285-bed Rose Medical Center in April 1995 for an estimated $200 million. The Denver Foundation has $66 million in assets.
"Because there are (now) two community foundations in Denver, we thought it might be appropriate to discuss a wide variety of collaborative efforts," said Don Kortz, Rose's president.
"The Rose Community Foundation and the Denver Foundation are the only community foundations serving the entire Denver metro area, and as we've talked to them, we decided we ought to work together closely and talk in concrete specific ways," said David Miller, executive director of the Denver Foundation. "Both Don Kortz and I are relatively new, and we've been talking a lot for the need to work together" in order to take both foundations' efforts "to the next step."
As a result, a joint committee of Rose and Denver directors has been formed to explore a potential alliance. Its first meeting was last month.
While the committee will focus primarily on how the two organizations can avoid redundant efforts, the possibility of a merger also will be discussed, according to Kortz and Miller. Both downplayed such a scenario, however.
Foundations like Rose have blossomed in recent years as for-profit operators such as Columbia have snapped up not-for-profit hospitals, while other hospitals have converted to for-profit status. About 100 foundations have been created in the past two years, according to the Council on Foundations, a Washington-based trade group.
But despite the birth of so many foundations, observers have mixed opinions as to whether potential alliances such as the one between the Rose and Denver foundations will become commonplace.
"It certainly is a viable option. New foundations have to worry about investments, and a lot of older, more established organizations have a lot of those systems already in place. It would probably give both sides a very good opportunity to reduce administrative costs and make them more effective," said Sharon Omahen, an associate with the Monroe Group, a San Diego-based company that advises hospitals on setting up foundations.
The Denver and Rose foundations both have low overheads already-less than 2% of annual disbursements. Kortz and Miller believe those costs may be pared even further in an alliance. Meanwhile, Rose is gearing up to meet its promise of making $5 million to $7 million worth of grants annually, having made only a handful of disbursements thus far. The Denver Foundation's annual grants total about $3 million.
"There is a faster learning curve by affiliating with other foundations," said Kortz, who took over Rose in October 1995 after working as president for a Denver-based real estate firm. Kortz had pledged at the time of his appointment to pursue joint grantmaking.
But Omahen and others don't see a trend forming toward mergers. She believes charitable needs are dictated by the makeup of a geographical area. The more heavily populated areas would probably contain several charitable organizations, and make mergers or alliances more attractive, she added.
"I don't think there's a trend toward doing things one way or another, but I don't think there's any question that a lot of these new foundations are seeking collaborations," said Steven Minter, executive director of the Cleveland Foundation, one of the nation's largest community charities.
"I believe it's a matter of finding a community orientation and trying to make a difference quickly. It's one way of leveraging the dollars and focusing the resources because there's never too much talent and too much money, and most foundations want to have an immediate impact."
Indeed, it was a speech Minter made to a group of Denver-based charitable organizations last fall that helped inspire Kortz and Miller to discuss joint ventures.
The Rose and Denver foundations have similar aims: funding local charities and not-for-profit groups with grants of $10,000 to $15,000.
Both fund healthcare, educational and human services organizations. The Denver Foundation also funds arts and cultural endeavors, while Rose funds Jewish charitable organizations.