NEW HANOVER COUNTY — The endowment met with the community-at-large this week to go over changes to its grant-making process, departmental organization and ways it will improve upon transparency.
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It was the first time former politician, judge and lawyer Dan Winslow, hired as executive director in late summer, was introduced to Wilmington’s nonprofit community. The listening session at the Harrelson Center on Tuesday evening was intended to garner feedback from nonprofits via questions and answers, introduce Winslow and his new ideas, and showcase what the endowment has done so far.
Among numerous speakers — including endowment fundees Louise Hicks, the executive director for Communities In Schools of Cape Fear, and Steve McCrossan from NourishNC — Winslow unveiled the “Grants Rainbow” system the endowment will utilize moving forward. He also emphasized “new ideas” as its real leveraging power.
Touted as the 75th largest foundation in the nation, Winslow said the endowment receives $5 of requests for every dollar it has. To date, it has doled out almost $120 million to 175 nonprofits — around 8.75% of the almost 2,000 nonprofits in New Hanover County. Roughly 150 are considered major — or established — nonprofits.
Winslow said his goal is to supercharge the endowment into “philanthropy plus.” The new Grants Rainbow tiered system breaks up allocations into six varied groups:
- Community grants up to $5,000, with recommendations from the endowment’s Community Advisory Council or others
- Capacity grants for fiscal sponsors and innovation development
- Project grants, which are “one-and-done” for a project or event
- Operations grants or investments for established nonprofits
- Strategic three-to-five-year grants, to provide solutions in the endowment’s main four pillars
- Social impact investing and problem-solving — big ideas that require partnerships with other investing organizations
This will allow more grants to be executed on a rolling basis, as the endowment no longer only announces annual awardees in December as it did during its first two years. Rather the process is open-ended for applying and consideration.
Of the six grant-making tiers, the first two — community and capacity grants — are intended to give money to smaller organizations that may need a boost to help grow. While the community advisory council — made up of seven people — will help inform on where to allocate funds, Winslow said he also would look to community input on ideas for younger or emerging nonprofits. These organizations would need to be two years or younger and have a fiscal nonprofit sponsor to apply.
Take, for example, the arts council, which received $200,000 from the endowment in August. As a fiscal sponsor, the council can divide up money among area theater companies or music foundations that help boost Wilmington’s economy via arts outreach, which is impacted by $75 million in New Hanover County, according to a national survey.
The $200,000 endowment grant received by the arts council this year will fund 15 to 20 grassroots organizations, with applications open through Dec. 16.
“Not everybody starts out as a major nonprofit,” Winslow said at the listening session, “but we want to encourage them and make sure that we grow the opportunity.”
He added the smaller grants could be a game-changer for many.
“That’s the Eagle Scout who needs money for the trailmarkers to blaze a new trail for a project, or the garden club for landscaping to beautify a downtown, or the food service entrepreneur from the culinary schools who just needs labels to go to the farmers market to be able to sell product,” he cited.
The operational support grant, for nonprofits meeting the endowment’s core goals — safety, education, health and community development — will be allocated for administrative needs.
“We simply say: ‘Here is unrestricted operating money in Q1 or Q2, when you need it most — do more of it for more people; you’re doing a great job,” Winslow said.
Strategic grants are larger projects with funding implemented over multiple years and the largest tier introduced by Winslow is social impact investing.
“That’s way bigger than us,” he said, an idea that couldn’t be funded by the endowment alone but may involve other philanthropies, even the state legislature.
He gave an example of the endowment funding $30 million to a project’s pie, but the applicant would also have money already allocated to the vision.
“Then we call our colleagues up in Raleigh and say: ‘Hey, we’ve got $75 million committed. All we need is $200 million more from the legislature, and we can get this thing done,’” he said. “I used to be in the legislature one of my prior lives, and I can tell you that the easiest way to get $200 million out of the legislature is to say, ‘Well, don’t waste that $75 million of free money we’ve got lined up.’”
He said these larger ideas would be the crux of transformational change — new and groundbreaking. It’s not a project revolving around nonprofits to fund core services, nor will the endowment fund core governmental services, such as school budgets.
“We won’t fill the gap because people aren’t raising funds,” Winslow clarified.
One audience member, Leigh Johnson with Wilmington’s Planned Parenthood, brought up the reason its nonprofit went to the endowment to begin with was because the legislature stopped funding one of its projects in 2016. She was speaking about its teen pregnancy program, which the endowment gave Planned Parenthood $200,000 for this year.
“Supporting teen moms to keep them in school and to delay a second pregnancy,” she said, “is very important. So thank you for that.”
Board chair Bill Cameron emphasized the endowment isn’t acting as a lobbying group on a particular issue, mainly because it’s illegal for 501(c)3s to do so.
“There’s a lot of rules, laws, regulations,” Cameron said at the listening session. “I don’t know where they all stack in and whatever that is, but it’s not us and we’re not going to do it.”
Additional funding scenarios that may include the state are only for ideas with multiple stakeholders involved, Winslow clarified, such as foundations, “high net worth individuals,” or “corporations.”
“We want to see other funders,” Winslow told PCD. “We want to see experience in the track record. And the reason for that is, we are very mindful we are stewards of the public trust.”
Winslow said some decisions require privacy until finalization, to guard against external interference. For example, he argued other parties could try to bid up a property or purchase adjacent parcels if the endowment prematurely disclosed considerations of buying land for an affordable housing project.
The executive director also envisions grants to help empower entrepreneurship, particularly for marginalized communities. This was a question brought up by Rob Campbell of New H.O.P.E. CDC and a New Beginnings Church pastor.
“Is there any thought given to long-term, low-interest loans so we can do better public-private partnerships with our capital, stacking of funds in the development area?” Campbell asked at the listening session.
Winslow said the goal is to provide prosperity to people who harness it “by their own energy, by their own aspirations,” to end intergenerational poverty.
After the listening session, Winslow mentioned to Port City Daily the Impact Fund, a public interest law nonprofit organization that provides grants to address social, economic, and environmental issues.
“What it does is, banks will fund them at a discount, and then they offer relatively low-interest loans for minority-owned businesses that are not quite there yet for commercial banking,” Winslow said. “And so what if we were to set up that fund? They charge, I think, 3% above their cost of eight so they get their cost of capital at 3% and they charge 6% to 9%. Our cost of capital is 0% — so what if in New Hanover County we can knock off two points?”
Winslow said it would require defining what a Black-owned business is, but it could be owners with at least 50% partnership. He imagines the fund to be replenished annually. But the idea is still in its incubation stage and has to be vetted by the board.
“There would be a lot of partnerships overnight, which means people have instant wealth and instant equity,” Winslow said.
Staffing
In 2025 three departments will be part of the endowment, one of which will look into tangible solutions to help address its pillars.
The departments include:
- Operations and outreach for programs and grants
- Research and impact
- Accountability
“There is not a problem that exists in New Hanover County that does not exist somewhere else in the United States,” Winslow said. “Maybe some of those problems have already been solved somewhere else in the United States — or at least thought about in the United States. So what we’re going to do … is harness the power of ideas and the newest thinking, the best minds in America — the university systems, the think tanks.”
The endowment is accepting internships for each of the three departments. The goal is to attract graduate students interested in public policy or philanthropy who gain experience by researching impact and focusing on lower tier grants, under $5,000.
Its also hiring two positions for a chief people officer and communications director, after staff stepped down earlier this year. There are plans to list more job opportunities in the new year, Winslow said, though wouldn’t reveal how many people he hopes to add overall. He maintained it would remain “lean” as noted in August when the endowment announced Winslow’s hiring.
“Every job will be absolutely necessary,” he said.
The ideas, he indicated, would be of most value to the organization. It’s one of the metrics to which Winslow is gauging success: to make New Hanover County a model other regions look to nationwide.
By 2028, he said the endowment will be writing upward of $100 million in checks due to the IRS mandating it spends 5% of its fund once it becomes a private foundation.
“But that is a pittance compared to the value of new thinking,” he said. “Let’s end some of these long-standing problems, many of which are solvable.”
Harper Peterson, former mayor, senator and founder of Healing Our People’s Endowment, asked during the listening session how Winslow would tackle youth gun violence. Winslow suggested looking toward regions that have found success.
He explained when he was in Massachusetts, the Black Ministerial Alliance of Greater Boston mediated gang peace in Boston, which could be an idea to mimic in the southeastern North Carolina region.
The endowment is also gearing up to commission studies with its research team and if it looks viable to tackle an issue, a request for proposal would be executed by the endowment to call for organizations that could “operationalize and do the solution to problem X.”
“We want to leverage innovation,” Winslow said.
Winslow mentioned after the meeting he had been thinking of the thousands of short-term rental units in Wilmington and how to utilize them for more affordable housing measures. He mentioned the county having over 5,000 Airbnb units.
“How much would it cost to have homeowners, mostly corporations or investment properties, to put a deep restriction on that property and make it an 80% annual median income rental property instead?” he asked rhetorically. “I bet it would cost us less than would it to build a unit. So that’s the new thinking: Why build hundreds of units of affordable housing, when we can convert thousands of units of affordable housing that are currently off the market.”
Winslow admitted during the listening session not all plans will come to fruition and the endowment is sure to fail in some areas. But he said he’s prepared to do so in order to forge a better path.
“If we fall forward and we learn from those failures, we can make the programs better and do something different,” Winslow said. “We are freer than the government and not invested in any particular path.”
Transparency and bias
LeShonda Wallace, executive director of Seeds of Healing — who served on the endowment’s community advisory council until a few months ago and whose nonprofit has received $140,267 from the endowment — commended staff for their help with the grants in the past.
However, she inquired whether there was a procedure in place to mitigate implicit biases, particularly with the endowment’s 13 board members who make final decisions on grants.
“As a liaison, I feel it’s fair to say this: There has been frustrations because the community is aware that the buck does stop with the board,” she said.
Winslow plans for grants to be delegated to staff and subcommittees of the board, particularly when it comes to community grants or funding lesser amounts, he said. The idea is for the board to focus primarily on long-term strategy.
“I think that the board and I will have conversations in the coming year about how we make the grant process itself simpler and accessible and maybe predictable too,” he said. “The board would be more vision-and-strategy and more operational stuff moves to management.”
“So how is the board mitigating bias?” Wallace asked again. “Is there a rubric?”
Winslow pointed to the checklist every grant applicant has to fill out. Wallace retorted the checklist wasn’t what she was referring to.
“So I was asking about when the buck stops with the board and they make the final determination, what are the processes to mitigate bias?” she repeated. “Bias is on the individual, not the checklist that we do during the letter of intent.”
Endowment Chair Cameron admitted in the organization’s first year the board did more heavy lifting than it would have liked, mainly because it was ramping up staff. He said a matrix was founded.
“We have people on the board that do have paid jobs that spent hundreds of hours setting up criteria, and we tried our very best to be as objective and as fair as we possibly could,” Cameron said. “We implemented that.”
However, as staff has been added, with criteria guidelines and a strategic plan in place, Cameron said the board’s job now is focusing on governance procedures and guardrails. Some of the grants he said may be brought up as consent agenda items, while larger grants would require more in-depth conversation.
“But our staff should be the ones that are going through the checklist and the matrixes in a very fair, even-handed manner,” he said. “And, yes, ultimately, the board has to decide. … Now we may delegate some levels of approval … but if you want to go spend $50 million every three years, the board will sit down and talk about that.”
Winslow offered to Port City Daily two immediate strategies to increase transparency in grant decisions and outcomes. The endowment will begin publishing impact studies to assess the benefit of grant allocations and provide information detailing what makes a grant request more or less likely to be approved.
“Strategically, have we advanced the ball?” he asked. “We just spent $23 million for affordable housing. Have we improved the price of housing? Have we improved the housing stock? We need to study that and publish it.”
Attorney General and incoming Governor Josh Stein mandated several transparency requirements for the endowment as conditions of his 2021 approval of the $1.5-billion hospital purchase. Stein’s requirements included publishing grant criteria and holding biannual public meetings.
“The thing that attracted me to the job is that it’s not closed doors in its entirety,” Winslow told Port City Daily. “It actually has visibility and accountability and will have more.”
Winslow met with county manager Chris Coudriet in early October to discuss a new amendment to the endowment’s foundational documents. He said he’d taken the initiative to ensure IRS compliance before the endowment becomes formalized as a private foundation in 2028.
The endowment was started with $1.25 billion but is now at $1.6 billion due to its investments portfolio growth. If it doesn’t spend 5% of its portfolio starting in 2028, it faces tax penalties of up to 30% of remaining undistributed funds.
Heal Our People’s Endowment founder Peterson advocates expanding public access to board meetings and disclosing the endowment’s investment portfolio to ensure investments are aligned with its charitable purpose.
The endowment’s articles of incorporation note it must adhere to IRS requirements on “jeopardizing investments” that could disrupt its charitable objectives. It does not disclose its investments managed by BlackRock, the world’s largest asset manager.
“For our investment portfolio, there’s some good reasons to keep those things private as well,” Winslow explained. “Because we don’t want to have other things happen that could be manipulated around the marketplace. Because if we’re going to go into a particular asset, for example, we don’t want to be too public about it because by the time we get into the asset, it could be altered by the market.”
Also included in the foundational documents are articles of incorporation formalizing the endowment’s legal status and charitable mission, bylaws detailing rules for the organization’s regulation and management, and the asset purchase agreement, outlining terms and conditions of the transaction. It is legally binding in court if either party breaches the agreement.
The North Carolina Nonprofit Corporation Act allows foundational documents to be amended.
Winslow said there was some disagreement among lawyers as to how the documents could be restructured to require greater transparency.
“The question is how far back in our chain of command do we have to go?” Winslow asked. “The [asset purchase agreement] is essentially the Declaration of Independence. We then have our articles of incorporation which is our Constitution. We then have our bylaws, which are our statutes, right?”
During Tuesday’s meeting, endowment Chair Cameron alluded to the board’s limited ability to act beyond authorities outlined in the documents.
“The rules and the guidelines were given to us: We didn’t write them. We didn’t create them,” Cameron said. “We didn’t interpret them. We live by them and operate by the founding documents.”
They were signed off on by the 2020 board of commissioners, at the time including Julia Olson-Boseman, Jonathan Barfield Jr., Rob Zapple, Pat Kusek and Woody White. The latter two were appointed to the endowment board in fall 2023, but Kusek resigned a few months later in spring 2024. White still maintains his board position.
The endowment’s bylaws can be amended by a majority vote of the board of directors. Amendments to article IV — encompassing board of directors’ power, authority, structure, qualifications, and compensation — require a supermajority vote.
The bylaws require the endowment to keep permanent records of meeting minutes and a record of all actions taken by the board outside of meetings. Meeting minutes are not publicly published.
Raleigh based-attorney Donovan Munford, the endowment’s incorporator and registered agent, developed the formation documents. He told commissioners his design purposefully avoided open meetings law, arguing it would increase outside political interference in the private foundation’s fiduciary decisions.
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