July 15, 2005
By GINNY WRAY
Bulletin Staff Writer
After its first full year of awarding grants, The Harvest Foundation has begun "to find its voice in the region," according to Executive Director Harry Cerino.
"It is impossible for a foundation to move a community in any particular direction. However, if it listens carefully, understands local concerns and acts wisely, it has the potential of building new coalitions to enable citizens to more effectively control their own destiny and shape new and effective policies for the future," Cerino wrote in the foundation's 2004 annual report, released this week.
In 2004, the foundation approved 40 grants totaling $11,333,725. Of that, $6.1 million was paid out and the rest was committed to be paid in future years.
The grants were in the foundation's three focus areas: Education, $5,325,902 or 47 percent of the funds; welfare, $5,374,079 or 47 percent of the funds; and health, $633,744 or 6 percent of the funds, the annual report states.
The foundation approved 70 grants totaling $20,892,955 from its first grants in August 2003 through its latest ones in July. The majority of the grants over the two years -- 35 -- were for welfare but the total funds approved were virtually equal for the three categories -- 36 percent for welfare, 34 percent for health and 30 percent for education.
The Harvest Foundation was created from the proceeds of the sale of Memorial Health Systems to Province Healthcare in 2002. The hospital board, which legally owned the facility, became the foundation board.
The board approves all grant applications after they have been reviewed and refined by the foundation staff.
Cerino said 70 to 75 percent of the proposals for foundation funds were approved. "We don't turn down a lot; we're pussycats," he said, adding that, in the future, fewer grants probably will be approved as some funds are committed to multi-year projects.
The foundation and its subsidiaries finished the year ending Dec. 31, 2004, with $202.4 million in total assets, the annual report states. That was an increase of about $11.3 million from the prior year, it added.
The foundation's goal is to earn 8-8.5 percent return on its investments and spend 5 percent of that, or $10 million, a year, Cerino said. That would grow the foundation's principle funds by 3-3.5 percent, he said, adding that such returns depend on the stock market's performance.
In the annual report and an interview Tuesday, Cerino explained the reasoning for the grants and the foundation's directions for the future.
The grants were a "blend of charitable grants to help alleviate some of the immediate needs of families in distress," he stated in the report.
For instance, the foundation gave the United Way of Henry County and Martinsville $252,500 in 2004 to help area nonprofit organizations respond to the needs of people experiencing a personal financial crisis. Cerino explained that the United Way and groups such as SafetyNet already are set up to help people in need, so there is no need to duplicate their work.
The foundation also funded "public policy grants that have the potential of transforming the region over the long term," the annual report states.
Cerino said such grants include $2.4 million for the Martinsville-Henry County Economic Development Corp. and $50,000 to the Southern Environmental Law Center to launch an organization to maximize development of the area's environmental resources to increase the community's wealth and jobs.
It is important that a group such as the foundation balance serving the needy and exploring options for community improvement, the annual report states. "In one way, we act with our heart for those who are suffering and in another with our brain for seeking creative solutions to pernicious problems that have become entrenched over decades," it adds.
Some grants address both immediate needs and policy issues, Cerino said. For instance, the health care initiative, which was funded this year based on groundwork provided in 2004, will address immediate health and welfare needs as well as long-term issues such as the area's high levels of obesity, diabetes and stroke, he said.
The $100,000 grant to study the possibility of a sports complex in the area also addresses both immediate and long-term issues, he said. Such a complex would encourage fitness but it also could "transform the community" and make it a destination for people in the region to attend soccer and other tournaments. While here, they would spend money on gas, food and other items, thereby helping the community.
The foundation wants to "reach beyond a culture of poverty to effect substantive change. Foundations can provide a valuable service by helping to serve as a ?research and development' function for the civic sector by testing new models, bringing in fresh outside ideas, exploring state-of-the-art programs and connecting the area to broader statewide and national networks," the report states.
"We get beaten up for funding studies," Cerino said, but he takes issue with that.
"What we fund are blueprints for change," not studies, he said. "Something has to have the prospect of leading to an action. If not, we would not do it."
That fits with Cerino's vision of the foundation providing venture capital for initiatives that could improve the community, such as the EDC.
"By providing venture capital for social change, Harvest will be more likely to help the region's institutions achieve informed, planned reforms. The more new things are known, the better will be the decisions that affect the public," he wrote in the annual report.
One of the foundation's most visible efforts in 2004 was its $50 million challenge grant to the state to open a college in Martinsville or Henry County within two years. Cerino said that effort now is being pursued by a planning committee.
"I remain optimistic," he added. "Harvest does not see a university in Martinsville as a panacea but rather as another element to assist the rebirth and redefinition of our area," he wrote in the annual report.
The Harvest Foundation wants to be a facilitator in that rebirth, Cerino said, adding that in the next year it likely will fund some recommendations and priorities that the community defined during the Market Street economic assessment and strategy. But the area's direction or vision for the future will be determined by the area's leadership and the "will of the folks," he said.
In the annual report, he noted that there are different opinions on the community's future -- should it embrace new technology or try to recreate a vanishing industrial base? Should it take a high-tech research path or build on unique local assets?
"It is premature to know where these divergent roads may lead. A community with limited resources cannot follow multiple roads simultaneously," he wrote.
" ... To a certain extent, we can create the future we want by the decision we make today. The path we decide to select over the next year or so and the decisions the community makes on the investment of its limited resources will be instrumental in determining the type of future we will have," he added.
Reflecting on the past year, Cerino said he "takes full responsibility" for the foundation's lack of public relations, saying he never had been in a position where that was needed before.
"Clearly it became a major gaff," he said. "In the future we will be making an effort to tell our story ... what people getting the money are doing with it."
Asked what he is most proud of in his work here, Cerino said it is the organization he has built. And "the grants speak for themselves," he added.
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