The generosity gap

The desire to give away one’s money is a sublime human urge, but the actual giving can be devilishly difficult. Tax laws are complex, and the world of good causes is riddled with ways to waste money. As Bill Gates has said, giving money away can be more challenging than making it in the first place.

That’s apparently why mega-investor Warren Buffett, who regularly comes in second behind Gates on richest-people-in-the-world lists, earlier this year decided he wasn’t going to set up his own foundation to give away his money. Instead he announced he would be turning his $35 billion fortune over to the already well-endowed Bill and Melinda Gates Foundation, which has proven its ability to make smart use of large amounts of money.

Buffett’s act was remarkable for many reasons, not least of them its lack of egoism. But to Alexa Valavanis, the executive director of the North Valley Community Foundation (NVCF) in Chico, its biggest impact was the powerful signal it sent to donors everywhere to gift with organizations like hers that know how to make it do as much good as possible.

“You can’t overestimate the importance of Warren Buffett saying he wasn’t going to ‘reinvent the wheel’ when it came to giving away his fortune,” she said during a recent interview in her office in a north Chico professional complex. “What he said to donors was, ‘Find organizations that are already doing it and put your money with them.’ “

That is exactly where NVCF comes in. It’s similar to the other major foundations in Chico, the University Foundation and the Enloe Foundation, but with a major difference. While the latter are designed to serve as a funding source for one entity, the NVCF serves all the nonprofit agencies in the community—not only as a bridge between them and donors, but also as a resource agency for both nonprofits and donors.

A strong community foundation can be an immensely powerful tool for improving people’s lives. NVCF helps nonprofit charities make good use of grant monies, strengthen their infrastructures and develop their own endowment funds, and it assists donors in maximizing the value of their gifts and deciding how they want their donations used.

In the two years since Valavanis took the helm, the 20-year-old foundation has increased its total assets from $1.7 million to $2.8 million, or by 65 percent, much of which is in endowment funds. In the past three years, it has given out nearly $554,000 in grants.

Just as important, she said, the foundation has been working with nonprofit groups in its service area—Butte, Glenn, Tehama and Colusa counties—to build up their individual endowment funds to create sustainable funding bases for them. Too many agencies live from grant to grant, she explained, and when the money runs out they suffer or, worse, close up shop.

“For me the nonprofit sector is quality of life in Chico,” Valavanis explained, her eyes sparkling. The helping services provided by the dozens of nonprofit agencies, whether to the homeless or the hungry or the addicted or struggling kids or artists looking for a place to show their work, are what make a community truly human and, ultimately, richly livable, she explained. And she is determined to create a foundation that can sustain such a community.

Now 30, Valavanis came to Chico from Southern California with her twin sister, Alicia, in 1995. Both had been recruited to play on Chico State University’s women’s basketball team. Alicia is now assistant women’s basketball coach at University of the Pacific, in Stockton, while Alexa has put the scrappiness that served her well as a point guard to work building up nonprofit groups.

She’s a petite woman with a pixie’s face, but she shakes hands like a longshoreman and exudes curiosity and energy. She’s a fast talker, a lover of words who majored in journalism, “aspired to be a novelist” and has penned several “only slightly fictionalized” tales of her many traveling adventures.

After graduation, she worked for a year in Shanghai, China, in the development and expansion of international kindergartens, then traveled through Southeast Asia before landing in Guatemala. There she co-founded and was executive director of a nonprofit foundation called Seeds of Life, created to raise money for and strengthen the indigenous nonprofit groups. (Seeds of Life has now merged with a group called the Calacirya Foundation, which is focused on alternative energy and sustainable agriculture. Valavanis sits on its advisory board.)

Back in Chico, which she considered home, to raise money for her group, she was writing a grant for Big Brothers Big Sisters when she learned of an opening at NVCF, applied for and got the job. “This was a fit from the start,” she said. “Truly this organization’s mission is to strengthen the nonprofit sector.”

Joan Stoner is a CPA who donates office space to Valavanis and the NVCF, as well as serving as president of its board. The role of the executive director, she said, is “to teach people that this foundation can do for the community what the University Foundation and the Enloe Foundation do. We needed someone who would write and speak well and who had passion and charisma, and I don’t think we could have found a better person.”

According to a major report by the James Irvine Foundation released this month, most of the counties of the northern Sacramento Valley are seriously underserved by philanthropic foundations. Analyzing statewide data from 2003, the study found that most of the money went to the coastal counties, while the counties of the rapidly growing Inland Empire and Central Valley, including the North State area, received only a small fraction of it. In San Francisco, for example, the per capita level of funding in 2003 was $678; in Butte County, it was just $12.

Valavanis wasn’t surprised by the information, nor was she dismayed by it. “We [in the philanthropy world] hear over and over again that these communities are underserved,” she said. At the same time, there have been “massive changes” since 2003 that the report didn’t include.

For example, the report noted that NVCF had assets of under $1 million, a figure that is seriously out of date now that the group’s assets are up to $2.8 million, she explained.

The solution to the funding imbalance, however, isn’t necessarily to funnel more money from the coast to inland California, though that would be nice, but rather to develop this area’s own resources, she insisted.

“One of our contentions is that there is money here, but often it’s tied up—in land, for example. We may not have the same cash flow as the Bay Area, but we do have wealth here. And we know there are people who want to give it away.”

Valavanis points to the Humboldt Area Foundation, which has assets of more than $50 million and distributes more than $2 million annually to agencies in its four-county North Coast service area. “Humboldt’s economic base is similar to ours,” she explained, “but it has a very large endowment and net assets. It’s a great model of a rural community foundation.”

The important thing is for potential donors to know that NVCF can help them establish a plan for giving that maximizes the tax advantages to them while meeting all of their other wishes for estate planning, including inheritance. Valavanis gets help from her 15-member board of directors as well as a new Professional Advisory Committee composed of experts in estate planning, CPAs and others knowledgeable in planned giving, investment strategies and the like.

In addition, she has the services of local real estate broker, investor and philanthropist Joe King, the founder of the Northern California Regional Land Trust and former president of NVCF, who is the foundation’s extremely knowledgeable planned giving officer.

These many experts, Valavanis said, “are my greatest resource.”