#93 How Private Donations Can Successfully Leverage Public Funds, with Peter Stangel, Chief Operating Officer of the U.S. Endowment for Forestry and Communities

Sep 05, 2022

How can we successfully leverage public funds as private donors? Peter Stangel joins Sybil and explains how to distribute funds in the right places and how donors can strategically use their dollars to strategically leverage public funds and maximize impact. 

Episode Highlights:

  • How can we successfully leverage private and public funds for the causes that we care about
  • Peter’s personal journey to ultimately become Chief Operating Officer of the U.S. Endowment for Forestry and Communities
  • How to navigate the federal grant bureaucracies for maximum impact

If you enjoyed this episode, listen to these as well:

 

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Full Transcript

Peter, I am so happy you're on my podcast today. I interviewed you a while ago for a project I was doing for the Hewlett Foundation as a consultant. I was thinking, and interviewing folks who were working on wildfire issues, and when I interviewed you back then, I was just so interested in the work you did with the US endowment for forestry and communities and the fact that you are very important as an intermediary, leveraging public dollars and private dollars to then really work on an issue that we all care about, I thought my donors would be interested in understanding the mechanics of how you do this. Because it is a question that comes up often, how do we leverage public dollars effectively?

And also, Peter, you were telling me before we started the interview that you have birds singing in the background, and I can hear them It's great. Though I love it, it adds flavor to it.

Yeah, it's the sounds of nature.

So, Peter, before we get into, you know, your words of wisdom and advice for us, in terms of how we can do even a better job at leveraging public dollars as private philanthropists, and as well as anything else you want to ask me about, you know, what got you into this line of work and why are you so passionate about what you're doing?

Well, first of all, thank you. It's great to be with you. It's a treat to have the opportunity to speak with you, and I am very grateful for the work you did for the Wildfire funders group, summarizing all our various activities. So, thank you very much for doing that.

I've been interested in nature my entire life. My passion is birds. My dream was to grow up to be an ornithologist at a university. And I teach ornithology and do research. So, I enrolled in graduate school to pursue a Ph.D. So, I could follow that path, and about midway through graduate school, I had an epiphany and realized that what interested me more was conservation than science. And so, I began to pivot, looking for a job that would allow me to have a bigger impact on conservation.

And so, after getting my graduate degree, I went to work immediately for a foundation called the National Fish and Wildlife Foundation, based in Washington, DC, and I spent 20 years with them and then the past 12 years in the US endowment for forestry in communities.

That's great. I love that summary. It's so succinct and exact. It's wonderful, and Peter and Kniffel have an amazing foundation. Also, I'm hoping to interview some of the folks that work there now. Christina Wolny Akowski is a dear friend of mine, and she runs the West Coast region of Niff. For a while 

We were contemporary, yeah. They do fantastic work and have created a whole new financial force for natural resource conservation.

Nice. Well, so now let's talk about what you're doing now. You're the Chief Operating Officer for the US Endowment for Forestry and Communities. And can you talk to us first about, like, how do you and what do you do to make sure that funding is going to the right places?

And talk to me about some of the successes of working with public funds to get them into the right places as this intermediary.

And then we'll talk about, you know, what are some things donors should think about from the private philanthropic world about how we can engage with people like you to make sure we're leveraging public dollars in the right way to support communities?

Great. OK, well, let me give you a touch of background about the endowment. So, we're, we're teenagers. We were created in 2006 as a result of a settlement between the US and Canadian governments. So, we were created with a one-time infusion of $200 million that we will manage in perpetuity.

Hey, Peter, Peter, hold on a second because I think you just skipped over something that's a really interesting story, which is that there's a settlement between the US and Canadian governments. That funded the course with that, and why did that happen?

Why was there a settlement there and then you guys got this money to then take that?

Absolutely. It's an intriguing story, and most people are not familiar with it. Of course, the US and Canada are huge trade partners, and there's a lot of trade in forest products, particularly lumber.

But there have been longstanding disputes between the two countries about the prices for lumber that's charged, particularly coming from Canada. Most Canadian wood is grown on government or crown lands, and many US producers have long complained that this would have been grown with government subsidies. So, there's been a trade war for decades over the price of wood coming in from Canada. The US charged tariffs and collected a lot of money in 2000.

Six, there was a multibillion-dollar settlement. A lot of money was returned to Canada. Some of the money went to forest products companies, but several hundred dollars were set aside for what they called "meritorious initiatives. Some money went to Habitat for Humanity, some went to the American Forest Foundation, and then $200 million was set aside to create the US endowment for Forest Green Communities.

OK, great. Thank you for backing up on that because I remember when that was happening. It was a very intense and interesting story and a lot of people, including my colleagues, had a lot of stakes in the outcome was there.

So essentially, then you were created by this settlement, and you were created by public dollars It is what it sounds like Well, they were. They were tariffs paid by private companies.

Ah, good point. Yeah, yeah. But the point of that was that we're so small. Our corpus has gone up and down. Right now, it's worth about $250 million. We are not a private foundation or a public charity We were not required to do the 5% payout and that was very intentional on our part because public parties are required to derive a significant proportion of their revenues from outside sources, public sources. And so, part of the reason we did that was to help foster an atmosphere of partnership-building.

And so, in a typical year with a $250 million corpus, we end up spending 8 to 10 to $12 million of our own money for grants. And our mission is to benefit the entire forest product sector, from traditional wood to ecosystem services to recreation. And so, 8 to 10 to $12 million doesn't go very far.

Right.

As a result, we were founded in an environment of attempting to leverage money from others, particularly federal agencies but also other foundations and corporations, to generate more money for natural resources.

So how can we take a dollar of our money and leverage it with two or three or four dollars of other people's money, all for our benefit of us?

Yes, and this is exactly why I want to talk to you. How can we do that, Peter? Explain. Tell us how you do it.

And you know, we're not unique in that capacity. The National Fish and Wildlife Foundation you mentioned is very good at it. What we find is that not a lot of other smaller, particularly private or family foundations, do it, in part because there's a lot of work involved.

So, in my typical work week and that of the other program officers at the endowment, we probably spend as much time fund-raising as we do disburse funds to our grantees.

And so, what we'll typically do is come up with an idea or get an idea from someone else to do a particular project, decide that it's important for us, it supports our mission, and then we immediately begin looking for others who might be interested in contributing to that fund to help it get bigger.

Peter, could you tell me about how you created this fund, which takes a long time? Can you give me an example of a situation where it's worked out well and you feel like you can use your money? I know it's not your money but the endowment money, public money, and private money to upscale a project on the ground to support it. The timber products industry and also natural resources and conservation.

Sure. It's just wrapping up. Let me give you an example. One of the ecosystem services that we've focused on is water because about 2/3 of all the fresh water in the US originates in forested areas.

And it's well known that force does a great job of cleaning and storing water. And so, the healthier a forested watershed is, the cleaner the water that comes out is, and the less it costs to treat, transport, and store that water. So, it's in everyone's best interest to keep forested watersheds healthy. So, we decided that water was going to be a focus for us and that

We wanted to do what we could to help local communities protect and better manage their forested watersheds. That's an expensive proposition. Our board agreed that this was a good purpose. They allocated about $1,000,000 of our funding that we could then use to go out and prospect to attract other partners. We immediately went to some of our federal agency colleagues and identified the US Department of Agriculture's Natural Resources Conservation Service as a good ally, they ended up matching the funds that we put into it, and then about that time, we also received a request for proposals. from the Environmental Protection Agency to run what they call the Healthy Watersheds Consortium grant program. 

Most people see the EPA as the agency that comes in and cleans up after something bad has happened, but they also have a branch that focuses on proactive protection. So how do you keep a watershed healthy so that it won't require it?

expensive restoration. We applied for that grant program, so we filled out an application like everybody else, offered our resources, were selected to run the program, and received about a 3 1/2 million dollar grant from EPA to run that program Our board felt strongly enough about the situation that they increased the endowment's commitment to three and a half million.

We went back to NRCS and said, "Hey, why don't you be an equal partner? They committed 3 1/2 million. So, we then had a grant pool of a little over $10 million that we used to run competitive grants for local entities. looking to undertake watershed protection.

And then, once we began to give those awards, we looked for regional or state-level private foundations that could also come in and match funds.

That is a terrific story. The folks that listen to this podcast are donors who want to do this kind of work. They may or may not be interested in natural resources and environmental work. So, some of them might want to reach you directly, and in our show notes, we're going to have links to your website and contact information so people can get in touch with you. It feels like, with all of your experience, there could be some advice that you might want to give to us donors no matter what issue we work on in terms of how we can find someone like you and your organization that's working in an area that the donors care about no matter what the issue is.

Well, and that's a great question. That's a good point. I think one thing to realize is that donors don't necessarily need to develop their relationships with federal agencies and others I mean, as you know, it takes a lot of time to build relationships. There are a lot of nonprofit entities out there that already have outstanding relationships with federal partners who can work as intermediaries or act as a kind of middleman and build a relationship with agencies.

Great point.

And so, I think for a lot of donors, it may be as simple as going to the nonprofit partners that are typically their grantees and saying, "Hey, we'd like to expand our reach and begin to talk to some of these federal agencies directly or see what opportunities there are to learn. 

Merge funds because that's something that most grantees do anyway, and it’s common practice for a grantee to get an award from a foundation and then either be required to match it or look to match it from others.

And that's the same thing that donors can do if you've got a chunk of money set aside for a particular purpose. You can go to a federal agency, another donor, or a corporation with similar interests and look for matching funds.

Although there's friendly pushback to that, I think that's wonderful advice, but some nonprofits I'm thinking about that my clients support, they're sort of, they're too small to be able to apply to federal agencies for grants. The federal process of actually getting funds can be very complicated and can require special expertise. I'm not meaning to be negative. I'm just sort of thinking about that out loud and my experience there.

 And so, if I was a donor and I was talking to some of my favorite nonprofits about how they're leveraging public dollars and how the grants that we give can support them in that, I'm wondering about how we can also think through that so that as donors, sometimes when we say things, you know, we can acknowledge that power imbalances are a problem and we can be like, "Well, how are you going to do this and that and then the nonprofit is Yes, we will.

OK, we'll try, but then they're just way under-resourced to be able to navigate the federal bureaucracy of grants to get them. So, I just want to know how you've navigated that a little bit. It sounds like you've got a whole shop set up to be able to do that.

You talked to the agencies, and your success story there is a great one where you really worked with different agencies and leveraged more dollars and then worked with private philanthropy.

But I just wanted to pose the question, and I think it's time to think about it.

An excellent point, and I perhaps didn't make my previous point very clearly, but I think that that's a role that we take on sometimes, helping navigate a complex federal agency and making it simpler for our on-the-ground grantees.

So, in the case of the Watershed project that I mentioned a few minutes ago, the EPA doesn't have a system. In this case, it's for getting money for a small nonprofit. We stepped in and assumed that role, so we took on the reporting requirements and other requirements from EPA and then were able to package their money with our money and NRCS money and make it easier for smaller nonprofits to get; yeah, and so we took a larger chunk of money, broken up into smaller pieces. That benefited the local community.

Well, that's great, Peter. Thanks for bringing that up. And while you're talking, I'm thinking about sort of some of my own experiences with this too, where you know, sometimes the state and federal governments recognize this, and they have special programs that provide money and resources for capacity building to organizations such as watershed councils or others, as well as staffing or expertise to help fundraise and write grants.

I'm remembering when I was at a nonprofit. I was applying for a federal grant, and I usually applied for private philanthropic grants, and I was doing a proposal on the federal side, and I was on my way. I was overwhelmed when I was here ages ago. Now I have a little more experience, but.

It was quite something, and so I just sort of what I was thinking about there. So, it's fantastic that organizations like the EU, the S. Endowment, and you exist. All of us are there to navigate that so that you can allow the folks who are doing the work on the ground to make a difference. And so, it's a great thing for donors to sort of start seeking out some of these kinds of intermediaries like you on the issue they care about here. Do you have anything else to tell my listeners about this now that we've been talking for a while? Because I think this conversation is fantastic and you were very clear in everything you said about how we should think about these kinds of issues. Please offer any other words of wisdom You might have one for us today.

Well, two small things. One is to remember that there's a cost to doing all this. Not necessarily a financial cost, but a cost in terms of how you manage your time.

Perfectly fine.

And so, for example, though we only have 12 employees, a significant portion of our personnel are in our financial management department because it's very complex to manage federal funds. And so, we devote a lot of time to very high-quality fiscal management. And so, it's important to keep that in mind. But you know, there are also an increasing number of entities out there that are kind of trusted middlemen in these programs. For example, we're starting a new effort right now to try and tap into state revolving funds. tourists to secure funding for green infrastructure. State revolving fund applications are very complex; it takes a lot of time to understand them, and we've connected with a nonprofit that specializes in working on complex issues like that.

We are providing funding to them. Their goal is to train people to go out into the community and work with local nonprofits to gain access to state revolving funds. Once you decide that there's value in playing that role of trying to make some of these larger, more complex chunks of federal money easier for smaller grantees to get, there are a lot of different ways to figure out solutions.

That's wonderful, Peter. And if anyone wants to get in touch with you or learn more about the endowment, can you talk to us? It'll be in the show notes, but for anyone who's multitasking, running around, listening to this, why don't you tell my listeners how to get in touch with you?

We would love to talk with folks because, you know, we think there are a lot of benefits to this approach. You can reach me by e-mail at [email protected] or I welcome a phone call as well, 404-915-2763.

That's great, Peter. Thank you for being so approachable and for your wonderful words of wisdom and conversation. Best of luck to you.

Thank you.