Two venerable Bay Area community foundations recently agreed to merge, creating one of the nation’s largest such foundations, with assets of more than $1.5 billion to serve local communities.
The merger of the Peninsula Community Foundation and the Community Foundation Silicon Valley will create the fourth largest community foundation in the country after the Tulsa Community Foundation, with $2.3 billion; the New York Community Trust, with $1.9 billion; and the Cleveland Foundation, with $1.7 billion.
But for the two Bay Area organizations, a merger wasn’t simply about being bigger, but whether the resulting entity could better serve local communities.
And that’s where the Hewlett Foundation realized it could be a good neighbor.
Joining equally with the Packard, Irvine, and Skoll foundations, and the Omidyar Network, the Hewlett Foundation helped underwrite research by management consultants McKinsey & Company to enable the two organizations to investigate the merger idea. After interviews with more than ninety donors, grantees, community leaders, board members, and staff, and surveys of more than sixty professional donor advisers, McKinsey concluded that a combined entity could be more effective.
The new foundation, to be called the Silicon Valley Community Foundation, is expected to benefit from a broader reach by eliminating administrative duplication and by being able to take on larger projects than either organization could on its own. It also combines the strengths of two entities with strikingly different profiles. Most of the assets of the Community Foundation Silicon Valley consisted of individual family and corporate funds that it administered on their behalf with the donating families and corporations deciding how the money would be spent. The Peninsula Community Foundation, on the other hand, had a larger pool of funds donated directly to it that it could use as it saw fit to make grants.
The Community Foundation Silicon Valley, based in Santa Clara County, administered more than 650 charitable funds on behalf of local corporations and families, its assets totaling $919 million. The Peninsula Community Foundation in San Mateo County managed assets of $612 million, including more than 750 charitable funds.
Since agreeing to merge, the new board named Emmett Carson, currently the CEO and president of the Minneapolis Foundation, as CEO. Mr. Carson is expected to bring a vigorous interest in serving disadvantaged communities.
The new foundation will maintain the current commitments of each of its predecessors and direct its efforts regionally toward such issues as literacy, affordable housing, and narrowing the gap between rich and poor.
“We did not press for the merger, but saw a moment of opportunity to allow the two community foundations to explore whether this made sense for them and the communities they serve,” said Hewlett Foundation President Paul Brest. “We support their decision and believe that it will make it easier to address regionwide problems.”
Mr. Brest said the Hewlett Foundation and fellow underwriters of the McKinsey research would help with post-merger costs such as legal expenses and the move to a new headquarters.
The new foundation will have its offices either in Palo Alto or East Palo Alto, and will keep branch offices in San Mateo and San Jose.