Kentucky has 20,467 registered nonprofits.
In the late 1990s, Henry Heuser Sr., former president of the Henry Vogt Machine Company in Louisville, endowed $5 million to create The Vogt Invention and Innovation Fund. The fund was initiated to provide grants to scientists, entrepreneurs and engineers to help them create new companies and products. Heuser envisioned that these endeavors would benefit Louisville and the community’s economy.
This year, as it has for the past 20 years, The Community Foundation of Louisville (CFL) has overseen the fund as well as The Vogt Awards, where start-up companies compete to receive grants. Six companies were selected this year to receive $25,000 and a 10-week education program that includes coaching and mentoring.
The 2020 winning companies range from Stuccco, an online home design and staging platform, to Kare Mobile, a service that takes comprehensive dental care to patients.
Since The Vogt Invention and Innovation Fund’s inception, 84 locally owned businesses have received grants totaling more than $4.5 million.
Heather Cash, J.D., vice president of development and stewardship at CFL, explained that the power of a permanent endowment such as The Vogt Invention and Innovation Fund is that the initial gift is maintained and preserved.
“Over time, the distributions can be worth more than the initial gift,” she said. “Mr. Heuser started the fund with $5 million, and today we have distributed more than $4.5 million, but his initial $5 million is still there.”
What Is a Community Foundation?
Community foundations are bridges that connect philanthropies to individuals or organizations in need. They cover a defined geographic location—Kentucky has 15—and support nonprofits within that area.
Community foundations create a fund, grow it financially, and disperse the money. With millions of dollars in assets, these foundations work with huge sums, which result in helping thousands of people, either directly or through the work of nonprofit organizations.
The Community Foundation of Louisville is Kentucky’s largest, with $600 million in assets and managing 1,800 individual funds. Since its founding in 1984, the foundation has made annual grants to hospitals, schools and nonprofits, as well as students, entrepreneurs and artists.
A donor who wants to create a fund designates its purpose. There are specific IRS rules that must be followed, but Cash explained that, as long as it is charitable, the purpose is wide open.
“Our donors have created funds covering education, social justice, homelessness, hunger, or in support of a nonprofit organization their family cares about,” she said. “You can articulate your purpose, and we carry out that original intent for the life of the fund.”
Examples of How They Operate
The Community Foundation of West Kentucky was established in 1996. Originally focused on Paducah, the foundation has grown to include 18 surrounding counties and has $30 million in working assets, as well as $75 million in future gifts, such as wills and estate plans.
“We partner with our donors to help them set up perpetual giving to causes that matter to them,” Executive Director Tony Watkins said. “And it will continue long after they are gone.”
The foundation currently manages more than 180 charitable funds and each year distributes approximately $1.5 million in grants throughout western Kentucky. Donations from funds can be disbursed only to 501(c)(3) organizations, but those who establish the fund can specify which types of organizations they support.
As an example, Watkins cited the Merle W. Fowler Family Fund, which was created in 2008. Fowler and his daughters established the fund with a $1 million endowment prior to his passing later that year. The Fowler daughters distribute the earnings from the fund annually to arts organizations and art-related causes.
“They have a ball deciding where to distribute the money, and their father’s legacy lives on,” Watkins said.
The Foundation for the Tri-State Community supports the eastern Kentucky counties of Boyd, Carter, Elliott, Greenup, Lawrence, Lewis and Pike and a few counties in West Virginia and Ohio. This foundation got its start in the early 1970s in an effort to restore the Paramount Theatre in Ashland. After the historical theater was purchased and restored, the organizers realized the foundation could serve the entire community and take on additional community-betterment projects.
The foundation began to take on short-term projects where it could raise funds and see a project to completion.
“Our roots are so different from traditional community foundations,” said foundation President Kathryn Davis Lamp, J.D. “We have always had that bent to raise funds for projects in the communities we serve. It is what makes us unique.”
What started out as a venture to save a beloved theater now has approximately $28 million in assets, and in 2019 the foundation dispersed more than $1.9 million in grants.
In addition to projects such as creating and maintaining parks, building playgrounds, and planting trees, the foundation has a fund to support the flowers and hanging baskets that line the streets of downtown Ashland.
Another example of a small project that has great rewards is the Boyd County Animal Control Center Fund. It covers costs to spay and neuter animals at the Boyd County Shelter. The Pet Betterment Fund helps the shelter market animals for adoption and pays for vaccines and other medications. Lamp explained that funds such as this save the taxpayers thousands of dollars per year.
“People love to help but sometimes don’t feel comfortable giving money to a government organization,” she said. “If they give to a specific fund, they know their intent is honored.”