Published In: Puget Sound Business Journal on May 22nd, 2015
Author: Sean Myers
“It was hit or miss. We felt that we ought to be doing more, but we hadn’t really figured it out,” says Tom Varga, CFO Selections’ CEO.
CFO Selections got serious when it launched a foundation in 2007.
“We wanted to make our giving program part of who we are, day-to-day. We wanted to find out what it means to be a good corporate citizen,” he says.
First came a mission statement, which was “to give our time, talent and treasure to Washington children in need.” In 2012, the company developed a five-year plan and further refined the mission to target foster care and a few other critical needs.
“We felt we could make a huge difference by focusing our efforts. It makes no sense to have a million people doing a million things,” Varga says.
Focus yields synergy, he adds. “We’re pretty bullish on the importance of collective impact.”
CFO Selections explored several options for setting up a foundation, including the possibility of a full-bore, federally registered nonprofit. Few companies are better equipped to launch and administer a legally intricate private foundation than CFO Selections, which has the stated goal of “improving our clients’ ability to collect, manage and report financial and operational information.”
But the company instead opted to establish a 501(c)(3) donar-advised fund through Seattle Foundation, in part to reduce time spent on compliance issues. Next was formation of a 10-person foundation board, which proved to be the biggest challenge.
“Not everyone is a good board member. Chemistry is important, as is experience,” says Varga.
CFO Selections’ board includes three employees – one from ownership, one from professional staff, and one from its Portland office. The remaining seven board members are “smart, successful, educated people recruited from the community,” says Varga, with an emphasis on CPAs, CEOs, and other experts who can quickly address the inevitable challenges of running a foundation.
A community-dominated foundation board might not be the best approach for a young technology company, for example, which might want to enhance recruiting efforts by having more employee representatives, he notes.
“We didn’t want to make it appear that the foundation was a marking arm of our company. The board puts a wall in place,” says Varga.
Ownership meets each January and sets an annual giving target based on expected profits and each of CFO Selections’ three offices contribute monthly to that target. Thus far it has always met, and sometimes exceeded, targets. Each of the offices has input appropriate to profits generated. “The targets are a floor, not a ceiling,” says Varga.
About 85 percent of CFO Selections’ giving goes to children, with the remainder kept available for other causes employees are interested in, or for emergencies, such as the earthquake in Nepal. “We have a client that operates there, Sherpa Gear, and we wanted to show our support,” says Varga.
The earthquake had Varga devoting two days of a recent week to foundation matters, but overall a couple of hours a week is enough to keep things running smoothly. Initially it took about six months to establish the foundation, requiring the labor equivalent of one employee working quarter-time.
When organizations approach CFO Selections for funding, “I direct them to our website, where they can click a button that takes them to the foundation. I say, “if what you’re doing looks like it would fit with what we’re doing, shoot me an email,” says Varga.