Oklahoma Town and Community Fund Rally Together to Survive Tough Times

When one of Tulsa’s largest employers, Williams Companies, was facing possible bankruptcy this summer,

a group of local residents, including Phil Lakin Jr., hatched a plan. Mr. Lakin, executive director of the Tulsa Community Foundation, helped gather 500 local charitable executives, business leaders, and community members for a surprise pep rally at the struggling energy giant’s offices.

A financial crisis might not be cause for celebration in most towns. But Tulsa residents wanted to show support for Williams Companies, which has given generously to local charitable causes, including donations of more than $5-million to help start the Tulsa Community Foundation in 1998.

“We all believe in the management at Williams because they’re our neighbors, and people trust their neighbors here,” says Mr. Lakin. “Plus, we wanted to thank them for being so loyal in supporting nonprofit groups.”

Williams Companies’ high-profile endorsement of the Tulsa Community Foundation has helped encourage other companies to donate to the foundation, and led many nonprofit groups to house their endowments at the fund. As a result, donations to the Tulsa Community Foundation increased 360 percent, to $135.5-million, last year. Even though the Tulsa fund was formed just three years ago, it raised more money in 2001 than all but two other community foundations in the United States.

Tulsa’s growth comes at a time when many other community funds are having a tough time raising money. Twelve of 25 community foundations on the Philanthropy 400 experienced a 10-percent or greater decrease in private donations between 2000 and 2001.

Exodus of Donors

Although the Tulsa Community Foundation has benefited from substantial donations from individuals, the organization’s fast growth is more a reflection of the city’s coming together during tough times to try to preserve its long-term economic health, according to Mr. Lakin.

Metropolitan Tulsa, with about 800,000 residents, has been a magnet for economic distress since the late 1980s, when many large, locally based oil companies relocated their corporate headquarters to Houston. The departures meant the exodus of many of the city’s largest donors and fears of a subsequent crash in social services, says Paula Marshall Chapman, a lifelong resident and chief executive officer of Bama Companies, one of the country’s largest bakers of pies and biscuits.

“You start picking off a few of these people who give a lot, and it gets very scary — maybe you can’t fund the United Way campaign, or a drug and alcohol program, or the schools,” she says. “With the ebbs and flows of the business world we live in today, and with a lot of the wealthy oil families here getting older and dying off and a lot of their kids not living here anymore, you could see where you might look up 10 years from now and Tulsa wouldn’t be the same place. We didn’t want that to happen.”

As a preventive measure, George Kaiser, president of Kaiser-Francis Oil Company, dreamed up the idea for a community foundation that would help keep Tulsa’s remaining corporate and individual wealth in the city, according to Ms. Chapman.

The community foundation has attracted a blue-chip board of directors, including the mayor of Tulsa, the president of the chamber of commerce, and chief executives from large, locally based companies such as QuikTrip Corporation, a convenience-store chain, and Dollar Thrifty Automotive Group, a car-rental company.

The board has led the way in fund-raising efforts, says Mr. Lakin. About 75 percent of the money that has been raised is a direct result of board members’ efforts in soliciting donations. Mr. Lakin and members of his board visit organizations or individuals up to seven times on average before obtaining gifts, he says. With no budget for direct marketing or advertising, Tulsa Community Foundation attracts money by developing or tapping personal relationships. “This city has a very small-town feel,” Mr. Lakin says. “It’s expected that we make personal solicitations.”

Almost every board member who works for a local business has persuaded his or her company to create a donor-advised fund or charitable endowment through the community foundation, Mr. Lakin says. Joe Cappy, chief executive officer of Dollar Thrifty, persuaded his company to set up an endowment fund before the travel industry was “decimated” by September 11, he says. Now that times are tough, the fund has allowed the company to continue to match employees’ charitable donations dollar for dollar.

Mr. Cappy also moved his personal donor-advised fund from Fidelity Investments’ Charitable Gift Fund to the community foundation. “It’s frankly a better financial arrangement,” he says. “The service fees are considerably less, and for me it was worth a lot of money.”

Ms. Chapman also set up a personal donor-advised fund through the community foundation, persuaded her mother to start one, and arranged for the family-owned Bama Companies to create a corporate donor-advised fund. Bama gives $300,000 to $400,000 a year, she says. Ms. Chapman also sits on boards of several other nonprofit organizations, and has convinced them to place their endowments at the community foundation.

In all, the Tulsa Community Foundation has tapped 128 nonprofit groups to transfer all or some of their endowment funds to the community foundation. The community foundation charges a small annual fee — one-quarter of 1 percent of the market value of the fund — to manage the endowments.

“We’ve really helped to focus nonprofits in the community on the significance of having a safety net or endowment fund for difficult times like these we’re in now,” Mr. Lakin says.

Family Foundations

Another major fund-raising priority for the Tulsa Community Foundation: private foundations. Many local families administering private foundations created with oil money have grown tired of managing the foundations, Mr. Lakin says. The Tulsa Community Foundation has persuaded several of those families to close the foundations and open donor-advised funds at the community foundation or dedicate a percentage of the principal in their private foundations to the community foundation, Mr. Lakin says.

Although that has helped the Tulsa Community Foundation continue its strong growth through 2002, the faltering local economy concerns Mr. Lakin. “The problem is not just that the community isn’t generating any new wealth,” he says, “but we’re really starting to lose wealth.”

Tulsa’s mainstay industries — oil, energy, telecommunications, and travel — are some of the most distressed of any right now. WilTel Communications Group and WorldCom, each of which employs more than 2,000 people in Tulsa, both filed for Chapter 11 bankruptcy protection this year. Since the terrorist attacks on September 11, 2001, the local economy has suffered 4,900 layoffs, according to the Tulsa Workforce Investment Board.

As difficult a time as Tulsa continues to face, a silver lining exists, says Ms. Chapman. “At least we’ve planted the seeds in the community foundation,” she says. “If anything happens now, we won’t lose the system of funding.”