July-September 2005

Dear Friends,

When our Board of Directors recently approved $3.8 million in grants to nine California community foundations as part of our second Community Foundations Initiative (called "CFI II"), it demonstrated Irvine's long-held belief that community foundations play a tremendously important role in communities across California and that they can serve as strategic partners to private foundations such as Irvine.

California is fortunate to have a vibrant network of more than 30 community foundations that steward assets exceeding $5.2 billion, according to the League of California Community Foundations. Together, these community foundations distribute more than $500 million each year to nonprofit organizations of all sizes, working across a range of program areas. They know well - and reach deeply into - the communities they serve. As a result, for larger private foundations such as Irvine, it makes sense to work closely with community foundations as partners.

The Community Foundations Initiative II (CFI II) - anticipated to be a $10 million investment over the next five years - is designed to develop philanthropic resources in regions of California that have been traditionally underserved by organized philanthropy, particularly in inland regions of the state. Building upon the lessons learned from Irvine's first Community Foundations Initiative, which concluded in 2003, CFI II works with a new cohort of community foundations - institutions that are "emerging" in terms of their asset size and development and that are located in more rural, predominantly inland, regions of the state. The initiative will enhance the growth, visibility, and services of each organization, helping them to broaden their base of donors, increase assets, and assume greater leadership roles in their communities. The grants are tailored to the specific needs of each participating community foundation, and also include technical assistance for participants, connecting the organizations to external resources and experts that can help them take advantage of current best practices in operational effectiveness, board governance, marketing, and forecasting asset growth.

Another way in which Irvine is working in partnership with community foundations is through the Communities Advancing the Arts (CAA) initiative, as part of our Arts program. The Foundation has a longstanding commitment to the arts, and the CAA initiative - launched with a set of grants to eight community foundations in December 2004 - has invested $3.5 million for a combination of regranting to arts organizations and to develop each community foundation's capacity to expand philanthropic investments in the arts. These grants, payable over three years, also include matching requirements to ensure that participating community foundations could leverage local resources for the arts from new donors.

Community foundations play a vital role throughout our state by engaging local donors in effective and meaningful philanthropy. They also help foundations such as ours to extend the reach of our grantmaking through regranting programs that ensure that Irvine resources can meet local needs in communities across the state. Our view is that as the effectiveness of our local philanthropic partners grows, so does Irvine's.

As always, I welcome and appreciate your comments and suggestions about this update or any aspect of our work.

Sincerely,

James E. Canales
President and CEO

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