Phila. Foundation's mission to refocus

After a period of lackluster fund-raising, the Philadelphia Foundation is aiming to raise assets and refocus its mission under the new leadership of Pedro Ramos, a lawyer, civic leader, and the first Latino to lead the city's community foundation.

Still unpacking boxes at offices in 1234 Market St., Ramos, who was appointed in July, has embarked on a "listening tour" among current and prospective donors and similar community foundations, including the highly successful Pittsburgh Foundation.

One of the country's oldest community foundations, started in 1918, the Philadelphia Foundation is focused on the public good in the five-county Southeastern Pennsylvania region. It gives away $25 million a year and manages money for Benjamin Franklin's estate and and the estates of celebrities such as singer Luther Vandross.

But fund-raising has stagnated in recent years, and the foundation's assets have risen less than 5 percent even as the stock market has made a historic surge. Some experts say its future as a regional powerhouse is uncertain.

Ramos, a native of North Philadelphia, chaired the School Reform Commission for two years, earning a reputation as being sharp and competent during one of the district's most tumultuous periods.

In his new job, which he began in earnest in early August, he is already hunting for fund-raising opportunities, noting that few philanthropies have been able to tap the region's new wealth in finance and technology.

"There are bridges to be built," he said. "We have an obligation to engage them. That's our job as a community foundation."

"I take all calls," he added. "I grew my higher-education law practice by talking to university general counsels and finding out what they needed."

Besides managing Benjamin Franklin's money, now worth $1.7 million - the founding father has paid for more than $1 million in vocational education grants since 1993 - the foundation provides scholarships for Philadelphians who have overcome hard circumstances (for GlaxoSmithKline); keeps people warm through cold winters with money set aside to help poor people pay their energy bills; has funded the fight against cancer for more than 70 years, and even gave Alex's Lemonade Stand its start.

Ramos' appointment comes as the region's nonprofit leadership is undergoing a generational shift. Sarah Martinez-Helfman has been named president of the Fels Fund. The Lenfest Foundation recently appointed Stacy Holland as president. Laura Sparks, previously chief philanthropy officer at the William Penn Foundation, became executive director last year. And Donna Frisby-Greenwood now heads the Fund for the School District of Philadelphia.

Ramos should steer the Philadelphia Foundation in a new direction, says nonprofit executive Andrew Frishkoff, who runs the Local Initiatives Support Corporation.

After the foundation's last president, R. Andrew Swinney, announced his retirement in November, Frishkoff circulated an impassioned email imploring nonprofit colleagues "to engage the foundation and not let it be just another search" for a replacement.

Frishkoff calls Ramos "a good choice," but added that "they have to rebuild their fund-raising capacity."

The foundation says it eliminated the chief fund-raiser's position in a restructuring. Ramos confirmed that contributions fell from $21 million in 2007 to $17 million in 2013.

Various civic groups - including the Bar Association, the Greater Philadelphia Urban Affairs Coalition, and local banks - nominate the foundation's 22 board members.

"There needs to be new blood on the board," Frishkoff said, "and there needs to be a public eye on the foundation."

The last CEO, Swinney, left the post after 16 years.

Ramos said he's studying how other community foundations are succeeding.

The Pittsburgh Foundation and Heinz Foundation work closely together, Ramos said. That's a model he's exploring, and he plans to spend a day with the Pittsburgh Foundation's leadership.

He is also intrigued by the community foundation models in Boston and Minneapolis.

Philadelphia Foundation assets totaled $367 million in 2014, up $15 million from 2007. That's especially mediocre, given the last five years of a bullish stock market.

The Pittsburgh Foundation, by contrast, had 2013 assets of more than $1 billion, up $106 million since 2007.

There are no plans to change the investment strategy. The investment committee works with Colonial Consulting, which advises nonprofits, Ramos said.

The foundation directly invests only about a third of its $367 million in assets. Legacy trust banks invest the rest, limiting returns. So fund-raising is key. The $100 million portion of the portfolio has returned 9.2 percent a year over the last two decades, versus 7.2 percent for the standard endowment index, according to the investment committee.

Still, Ramos is planning an overall review of the foundation's strategy, advisers, and vendors.

He plans to hire a fund-raising team. But "I have some work to do to attract the top fund-raisers. We need a strategy first. You have to demonstrate it's an organization they want to work for to succeed."

Philadelphia suffers from a lack of corporate donors.

"Some cities that are considerably smaller than Philadelphia have much larger community foundations, and the donor action is at a considerably higher pace," said Clemens Pietzner, president of Triskeles in Exton, which creates donor-advised funds.

Alarm bells went off a few years ago when the Philadelphia Foundation was missing in action as local nonprofits decided to leap in to fix the city's broken public school system, recalls Jeremy Nowak, former president of the William Penn Foundation, which took the lead.

So will the Philadelphia Foundation now take on the city schools, a cause close to Ramos' heart? He says it's too early to say.

Under Swinney, the foundation was also known for giving "operating grants" that others wouldn't give - meaning the funds weren't linked to a program or outcome, but were just to keep the lights on and the good works flowing.

"There was a perceived need by Andrew [Swinney] and others that needed to be supported, and for that I have admiration," Pietzner said.

Ramos said that approach appeals to him. "Part of what we're doing is not the latest thing, or the sexiest thing, but it needs to be done," he said. "We have a responsibility to the most vulnerable."

Nowak also praises Ramos, but says the foundation "needs to make a more dramatic change than just a new president if it wants to keep pace with a city that has a new attitude about growth and stature. It needs a new operating strategy and a different brand."

Others also say this is a big opportunity for the foundation.

"If they don't do it this time, they miss the boat," said Nancy Burd, a former foundation executive and now a consultant. "People won't give if they don't feel as though the foundation is doing what it can to improve the community."

Ramos says he realizes the urgency, especially with an influx of millennials into the city; a stubborn 26 percent poverty rate; and a growing income disparity.

"We can't afford to not get it right. Unlike business or government, we have to act with a sense of urgency."

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CORRECTION: An Aug. 23 article on the Philadelphia Foundation gave incorrect information about the number of years former foundation president R. Andrew Swinney served — he headed the organization for 16 years; and the circumstances under which the foundation's former chief fund-raiser left — the position was eliminated in a restructuring, the foundation says. The name of the former president of the William Penn Foundation was misspelled. His name is Jeremy Nowak.

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