Kansas City Community Fund Adopts a Customer-Service Approach

Janice C. Kreamer has spent most of the past decade preparing for the 21st century.

As president of the Greater Kansas City Community Foundation, she started revamping the fund eight years ago so it would be ready to respond to the new century’s donors: people who will demand more and more control over how their charitable dollars are spent.

Such donors pose a challenge for community foundations, which were founded early in the 20th century and today hold assets worth more than $25-billion. Community funds succeeded in large part by seeking bequests and other unrestricted gifts from people who were willing to let the funds decide what to do with their money, but Ms. Kreamer says she worried that community foundations could not expect continued growth with that practice. So she ordered everybody who worked at her foundation to stop focusing on grant making and start listening to what donors, whom she often refers to as customers, wanted from the foundation.

To underscore her message, she trained every member of her 38-person staff in customer-service principles borrowed from the corporate world.

The products that donors are being “sold,” Ms. Kreamer told her colleagues, are all the resources that donors need — legal and administrative help, plus plenty of other information — to make their own giving decisions. She urged employees to make clear in every transaction that the donor’s charitable ideas and interests are paramount.

Much of the work that her staff members do now involves setting up “donor-advised funds.” Such funds allow donors to say when and if grants will be distributed from their funds during their lifetime — and to recommend which charities receive the money. By the end of last year, the foundation had been given 455 such funds to administer — up from 110 at the start of the reorganization.

“With this approach, you do not solicit donors,” says Richard C. Green, a Kansas City businessman who was chairman of the foundation’s board during the organization’s overhaul. “You’re talking to donors about their own interests, not yours. The way you connect with people is very different.”

Many community-foundation leaders were skeptical about Ms. Kreamer’s customer-service approach, but much of their doubt has receded now, perhaps because it’s hard to argue with solid results. Under Ms. Kreamer’s leadership, the Kansas City fund received $132-million in contributions last year, representing an increase of more than 600 per cent over 1992. (The increase does not include the $75-million value of the Kansas City Royals, the baseball team that was donated to the foundation in 1993.)

In 1998, it raised more money than any other community foundation in the nation. One by one, more than 50 community-foundation executives have traveled to Kansas City to learn the secret behind Ms. Kreamer’s success.

The secret, Ms. Kreamer says, is to recognize the convergence of two trends: the vast wealth generated in the last half of the 20th century, and the aging of baby boomers who in coming years will possess billions of dollars they either inherit or earn themselves.

To capture some of that money, Ms. Kreamer says, charities must find ways to accommodate the wishes of baby boomers, who are more demanding — both as consumers and as donors — than their parents and grandparents.

In acting early to restructure her institution to serve donors, her peers say, Ms. Kreamer was prescient. As she was making changes at her fund, community foundations found themselves in competition with the corporate world — which was offering donors the same kind of customer service that Ms. Kreamer had been teaching her employees. The Fidelity Charitable Gift Fund, which allows individuals to set up and help manage their own philanthropic accounts, for example, was created in 1992; its assets now total more than $2-billion.

Though Ms. Kreamer’s predictions seem to have been on the mark, the changes at her institution did not come easily. It took five years to complete the overhaul, which involved the loss of 60 per cent of the staff, who either resigned or were let go during the restructuring period.

“We were taking a service position, following the lead of the donor,” Ms. Kreamer says. “We had to move from being the expert grant makers to not being in a power position in the community. That was a change some people could not make.”

No matter how much money Ms. Kreamer has helped raise, some of her colleagues at community foundations across the country still question her approach.

While many community foundations offer donor-advised funds, some fear that if they receive too many donations in that form, they could end up catering to donors’ whims — at the expense of being able to make community-foundation grants to fill other local needs. Such needs may not be popular among wealthy donors but could still be worthy of support.

In response to such fears, Ms. Kreamer points to donors like Barnett C. Helzberg, Jr., former president of Helzberg Diamonds, who sold his family business to Berkshire Hathaway a few years ago.

“I’m the first to admit I got into this for totally selfish reasons,” says Mr. Helzberg, who acknowledges that his first gifts were made solely to defray taxes. Now, several years later, Mr. Helzberg is leading a group of donors and investors, many of whom he met through the community foundation. They are starting a charter school for students from poor families, scheduled to open next fall.

People like Mr. Helzberg, says Ms. Kreamer, illustrate how community foundations can serve donors and, in the process, expose them to local needs that meet their interests — thus getting them more involved in civic affairs. That, she predicts, will ultimately produce cash and other resources that otherwise would be unavailable in philanthropy.

“With this approach, community foundations have a chance to make this country more vital in the 21st century,” she says. “This is a way of doing business that will be good for the donor and for the country in ways we never dreamed possible.”