Post-Gazette Article

Pittsburgh Foundation offers a sheltering roof to small family foundations concerned about costs and survival

Tuesday, February 08, 2011
By Joyce Gannon, Pittsburgh Post-Gazette

Robert M. Thompson Jr. in his geodesic dome home in Murrysville. Mr. Thompson took a foundation he started independently and moved it under the Pittsburgh Foundation’s umbrella in part to ensure that it would continue should his heirs have no interest in running it.

While in his late 20s, Robert M. Thompson Jr. became a multimillionaire through the sale of Redshaw, the Pittsburgh software company he founded with his parents.

For about seven years after the 1983 sale, he stayed on to run the business under its new owners, then made a dramatic career change and launched a chain of Italian restaurants in Florida. When he sold the eateries 14 years ago, Mr. Thompson focused on being a full-time father to his son and daughter and took on the task of managing his own investments at home.

In the course of planning for the future direction of a private foundation he had established when he worked at Redshaw, Mr. Thompson, now 56, said he became concerned about how the foundation would be administered if his teenage children were not interested in running it as adults. Overseeing the fund on his own also cost him hefty taxes and administrative fees.

So last year, he converted it into a fund at the Pittsburgh Foundation, where the foundation staff will continue his goal of using the money to support initiatives in science, technology, engineering and math education.

The Robert M. Thompson Jr. Family Fund, with assets of about $300,000, was one of several funds established during a year in which Pittsburgh Foundation officials said gifts from living donors tripled to more than $10 million despite the sluggish economy. Overall, the foundation raised $52.1 million in 2010, up from $27.4 million in 2009. Much of that increase resulted from unusual events, however. The foundation added nearly $16 million through its merger with the Community Foundation of Westmoreland County and $10 million as the first installment of a $50 million gift from the estate of Charles Kaufman, a local engineer who established funds at the foundation for scientific research and other causes before his death in September.

“In the midst of what has been such a difficult economy, to have the year we just had was extraordinary,” said Grant Oliphant, president and CEO of the foundation that manages a range of endowment funds that support social, cultural and community causes. Its assets exceed $750 million.

It wasn’t a fluke the foundation saw a spike in the creation of new funds like Mr. Thompson’s last year.

The Pittsburgh Foundation pursued a strategic objective to encourage individuals to convert private foundations of $5 million or less to foundation funds, said Yvonne Maher, vice president of development and donor services. “With the downturn in the economy, they took a hit, and we realized there was an opportunity to relieve them from the administrative burden and still maintain relationships with their investment managers and advisers. … It resonated incredibly well with them.”

The foundation used “an aggressive strategy with a soft touch” that included mailings to all private foundations with assets of $5 million or less in Allegheny County and outreach to the attorneys and investment advisers who managed them. Among those who responded, Ms. Maher said, were a number of people who had created their private foundations 25 or 30 years ago and were becoming concerned about carrying on their legacy of giving because their children are scattered around the country.

“Charitable giving is all we do,” she said. “We don’t get a commission. All we want to do is capture their donor intent … and continue philanthropy in perpetuity.”

Mr. Thompson’s move to convert his private fund was a natural step since he already had a relationship with the Pittsburgh Foundation. After his mother, Janet Thompson, died of breast cancer in 1992, his family launched a $20,000 research fund in her name at the foundation to focus on diseases of aging, such as Alzheimer’s. Through his regular communications from the Pittsburgh Foundation, he learned about its effort to attract private foundations and decided to act.

“I saw that the costs were less, and they provided succession and backup if I died and my children became” uninterested, he said.

The Carnegie Science Center is the biggest benefactor of Mr. Thompson’s fund, and he hopes the foundation can identify “innovative charities that are doing some new kinds of things” with STEM initiatives for students in grades K-12.

His own passion for science dates to time he spent as a child at the Buhl Planetarium. He earned a physics degree from Carnegie Mellon University and in 2007 finished building a solar- and geothermal-powered home in Murrysville where he resides.

Besides its merger with the Westmoreland foundation and assorted sizable gifts, the Pittsburgh Foundation last year benefited from the early stages of the economic recovery, especially the uptick in the stock market late in the year, Mr. Oliphant said. “People felt a little better at the end of 2010 than in 2009. There was a better sense of confidence in response to the economic upturn, and they had some appreciated stock to donate.”

A steady increase in charitable giving could continue through 2011 according to recent reports.

In a survey last month for Dallas-based charity consultant, Dunham & Co., 18 percent of households said they planned to increase their giving this year. That’s up 29 percent over the number of households that planned to increase their contributions in 2010. Of the 1,000 adults surveyed, another 20 percent said their charitable contributions would stay the same.

“After three years of Americans indicating a weakening support for charities, it is very encouraging to see such a significant jump in the number of households that say they plan on increasing their giving to charity,” said Rich Dunham, CEO of the consulting firm.

The most recent giving index from Blackbaud, a South Carolina firm that provides business services to nonprofits, said giving rose slightly, 0.3 percent, for the three months ended in November last year compared with the same period of 2009.

“With the elections behind us, and the economy and markets improving, fundraising results have started to stabilize,” said Chuck Longfield, chief scientist of the Blackbaud Index.


Joyce Gannon: or 412-263-1580.
First published on February 8, 2011 at 12:00 am