The Cleveland Foundation

at Seventy-Five

An Evolving Community Resource

RICHARD W. POGUE

"Were American N ewcomen to do naught else, ourwork is well done if we succeed in sharing withAmerica a strengthened inspiration to continuethe struggle towards a nobler Civilization-through wider knowledge and understanding of thehopes, ambitions, and deeds of leaders in the pastwho have upheld Civilization's material progress.As we look backward, let us look forward. ))

-CHARLES PENROSE( 1886-1958)

Senior Vice-President for North AmericaThe Newcomen Society

for the study of the history ofEngineering and Technology

(1923-1957)Chairman for North America

(1958)

This statement, crystallizing a broad purpose of the Sodety, was first. readat the Newcomen Meeting at New York World's Fair on August 5,1939,when American Newcomen were guests of The British Government.

HActorum Memores simul affectamus Agenda"

This address, dealing with the history of The Cleveland Foun-

dation, was delivered at a "I989 Cleveland Meeting" of The

Newcomen Society of the United States held in Cleveland,

when Richard W. Pogue was the guest of honor

and speaker on June 8th, I989·

"Any group with a realistic vision of a way to enhance some

significant aspect of Greater Cleveland can approach the

foundation for assistance in realizing its dreams, whether

they be of mounting a world premiere opera ... or land-

banking abandoned lots to establish a midtown industrial

park."

-RICHARD W. POGUE

The Cleveland Foundation

at Seventy-Five

An Evolving Community Resource

RICHARD W. POGUEMEMBER OF THE NEWCOMEN SOCIETY

CHAIRPERSON

THE CLEVELAND FOUNDATION

CLEVELAND, OHIO

THE NEWCOM EN SOCIETY OF THE UNITED STATES

NEW YORK EXTON PRINCETON PORTLAND

Newcomen Publication Number 1326

Copyright, 1989THE CLEVELAND FOUNDATION

Library of CongressCatalog Card Number 89-61717

Permission to abstract is grantedprovided proper credit is allowed

The Newcomen Society, as a bodyis not responsible for OpinIOnsexpressed in the following pages

First Printing: June 1989

SET UP. PRINTED AND BOUND IN THE UNITED STATESOF AMERICA FOR THE NEWCOMEN SOCIETY OF THEUNITED STATES BY PRINCETON UNIVERSITY PRESS

INTRODUCTION OF MR. POGUE IN CLEVELAND,ON JUNE 8TH, 1989, BY MR. STEVEN A. MINTER,DIRECTOR OF THE CLEVELAND FOUNDATION

Members of Newcomen and guests:

Noorganization can be better than its governing board. What-ever prestige The Cleveland Foundation has attained in thephilanthropic field it owes in no small measure to the dedi-

cated, imaginative and, frequently, daring men and women who haveserved on its Distribution Committee over its seventy-five-year his-tory.

Reflecting on what sets nonprofit trusteeship apart from service on acorporate board, Brian O'Connell, president of Independent Sector,has observed: "Perhaps even more important [than financial contribu-tions and community outreach] is the degree to which voluntary orga-nizations look to individual trustees for leadership. Beyond all the es-sential procedures and participation to ensure accountability, the boardof the nonprofit organization has a substantial but rarely defined re-sponsibility for leadership."

The present members of our Distribution Committee-the Rev.Elmo A. Bean, James M. Delaney, John J. Dwyer, Henry J. Good-man, Jerry V. Jarrett, Adrienne Lash Jones, E. Bradley Jones, Lind-say J. Morgenthaler, Harvey G. Oppmann and Alfred M. Rankin-are leaders all, leaders in business, academia, religion, the arts andvolunteerism. Richard W. Pogue is a leader among leaders.

It has been a pleasure and a revelation to work with Dick these pastten years, the last four as chairperson of the Foundation's DistributionCommittee. The words that come to mind are passion and discipline. Itis a potent combination. Like many a transplant to Cleveland, he ispassionate in his enthusiasm for the community's assets and passionatein his concern about its deficits. Yet there is always a dispassionate eval-uative process, an attempt to master an issue from a factual base. WhenDick cares deeply about something-be it his law firm, his family, thepublic schools, his church, or downtown development-he sets aboutfinding a way to make it work, to make it happen, to make it excel.And he succeeds.

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Reviewing Dick's professional and civic accomplishments brings tomind a wonderful Hebrew word that figures prominently in the familyPassover observance: dayenu. Recurring throughout a long recitationof the wonderful things God did for the Jews, dayenu means "It would-have been enough."

Born in Cambridge, Massachusetts, Dick received his bachelor'sdegree from Cornell University and his juris doctor in 1953 from theUniversity of Michigan. After service in the Army's Patents Division,he joined the Cleveland law firm of Jones, Day, Cockley & Reavis in1957, and in only four years became a partner. He has served as man-aging partner since February 29, 1984, leading an aggressive expan-sion program that has taken Jones, Day from 335 lawyers nationwideto almost 1,000 worldwide, making it the second-largest law firm inthe United States. Among other professional honors, he has served aschairman of the American Bar Association's antitrust section.

Dayenu. For most people, it would have been enough. But in theearly sixties, Dick began an equally distinguished career as a volunteerin Greater Cleveland, acting as a sort of "big brother" to fatherlessyouths from an inner-city settlement house. Although he is now muchmore likely to be at the head of a volunteer organization than one of itsfootsoldiers, the personal commitment and the personal touch remain.

Many civic projects have benefited from his formidable talents andenergy. A partial list of his current commitments, in addition to hisservice as our chairperson, includes: president of the 50 Club; chair-man of the advisory council of Cleveland Ballet (of which he is a pasttrustee and chairman); a trustee (and former chairman) of the GreaterCleveland Roundtable; a trustee of the Kulas Foundation, UniversityHospitals, campaign chairman of the United Way, and, in his constantquest to be a well-rounded person, a trustee of the Rock 'n' Roll Hallof Fame and Museum.

Each of these organizations, I am sure, has profited from the integ-rity and vigor Dick brings to every task he tackles. At The ClevelandFoundation, he has brought us to an unprecedented level of cooperationand collaboration with government and the business community, help-ing to forge the public-private partnership that has contributed somuch to the city's recent progress. On his watch, we made the leadgrant-the largest in our history-to an ambitious but untried Schol-arship-in-Escrow program to help motivate students in Cleveland's be-

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RICHARD W. POGUE (L), CHAIRPERSON, DISTRIBUTION COMMITTEE, AND STEVEN A.

MINTER, DIRECTOR, THE CLEVELAND FOUNDATION

leaguered public schools. Under his tireless leadership the foundationembarked on a new economic development strategy that is widely ac-knowledged as a model for other community foundations.

To be sure, it took major efforts by many people to achieve thesefeats, but I can say with certainty that without Dick Pogue theywouldn't be as far along as they are today.

Dayenu. It would have been enough. But for Dick Pogue, there isno such thing as enough, and all of us in Greater Cleveland are wit-nesses. It is a pleasure to introduce to you RICHARD W. POGUE.

Fellow members of Newcomen and guests:

ITis indeed a great honor to be asked to share with such a distin-guished audience the story of The Cleveland Foundation, whichcelebrated its seventy-fifth birthday this past January.

The Cleveland Foundation was the world's first community foun-dation. For seventy-five years it has been a generally quiet but none-theless potent force for good in Greater Cleveland.

Tonight I would like to organize my remarks around five subjects-first, a thumbnail sketch of the foundation and its mission; second, abrief "in-house" evaluation of its role; third, mention of a bit of itshistory; fourth, notation of some of the foundation's recent significantaccomplishments; and finally, a few observations about the future.

T he FoundationFirst, what is The Cleveland Foundation? Technically it is a con-

glomeration of more than 650 trusts created by various donors over thedecades. The trust assets are held by five area banks: Ameritrust, BankOne, Huntington National Bank, National City Bank and Society Na-tional Bank. The income from the investment of these assets is distrib-uted in accordance with the intent of the donors. The distribution de-cisions are made by an eleven-member Distribution Committee, whosemembers serve without compensation for staggered five-year terms(subject in the case of each individual to a ten-year overall limit).

Backing up the work of the Distribution Committee is the finestprofessional staff I have ever encountered in a nonprofit organization.Steve Minter, the director, is a truly outstanding leader who deeplycares about people and the community and at the same time managesthe foundation in an efficient, businesslike manner. He is highly re-garded throughout the United States as a leader of community foun-dation executives. He is supported by Assistant Director Dr. SusanLajoie and nine other program staff members who are also remarkablyfine professionals-dedicated, fair-minded and effective. The qualityof the staff overall is, in my opinion, matchless. Much of the technicalexcellence of the institution is attributable to the special expertise in thetax and trust law fields of our long-time counsel, Malvin E. Bank ofThompson, Hine and Flory.

The foundation's assets, while modest in comparison with those of

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the largest private foundations in the United States, are nonethelessimpressive. At latest count, the market value of our endowment was inexcess of $500 million, making The Cleveland Foundation the secondlargest community foundation in the country. (The New York Com-munity Trust, a very fine organization with which we have much in-tellectual commerce, is first, with assets valued at more than $635 mil-lion.)

And where does the approximately $25 million in income generatedeach year by our endowment go? Disbursements are made to manygrantees in six principal areas of need-education, arts and culture,health care, social welfare, civic improvement and economic develop-ment.

The Cleveland Foundation is fortunate in that 40 percent of the in-come it disburses is completely unrestricted as to purpose, another 40percent is broadly restricted to general fields such as higher education,and only 20 percent is specifically designated by the donor. Thus, as aresult of our donors' wishes, The Cleveland Foundation can use theincome from assets of about $ roo million for designated communityprograms, while the income from $400 million, or 80 percent of thetotal assets, can be used for a combination of unrestricted and onlybroadly restricted purposes. This configuration allows us great flexi-bility in pursuing our stated mission: to improve the quality- of lifefor all citizens of Greater Cleveland.

An Internal AssessmentSecond, let's turn to an in-house assessment of the role of The Cleve-

land Foundation in a community whose time of greatness effectivelypeaked shortly after World War II. How has the foundation helped inrebuilding a city which endured a serious economic decline in theI960s and 197os, but which since 1980 has scored a remarkable come-back that Fortune magazine recently characterized as an "impressive,oddly moving experience"?

Please forgive our lack of humility in stating our conviction that TheCleveland Foundation's role has been pivotal in Cleveland's resur-gence. Those who live and work in the Cleveland area are extremelyfortunate that this great institution is located here, because it serves asa preeminent source of social venture capital. For example, our unwa-vering support of the Playhouse Square theater restoration project fromits humble beginnings, our early leadership of lakefront redevelop-

ment, our dogged collaboration with neighborhood rehabilitationgroups, and our recent championship of the unique Scholarship-in-Escrow program to help the city's public schools-to name but a fewof our many major grant programs over the last two decades-have allcontributed to the reemergence of Cleveland from the shadow of eco-nomic dislocation and municipal default.

I believe that the eleven concerned members of the DistributionCommittee and our staff have been fortunate to be able to playa mar-velously catalytic role in Cleveland's rebirth, although credit obviouslymust also be given to our many, many partners-such as the GundFoundation, BP America and TRW, and various governmentalunits-with whom we have leveraged funds many times over for theseand other revitalization projects.

Indeed, The Cleveland Foundation is a total community effort.Clevelanders established it and endowed it. Clevelanders run it. And,most importantly, all Clevelanders benefit from it. Any group with arealistic vision of a way to enhance some significant aspect of GreaterCleveland can approach the foundation for assistance in realizing itsdreams, whether they be of, for example, mounting a world premiereopera, converting an old building into independent-living quartersfor the disabled, or landbanking abandoned lots to establish a mid-town industrial park.

A Bit of HistoryThird, let's look at a bit of history.

The responsiveness to pressing community needs such as those whichI have just mentioned would, frankly, not have been possible at thestart of this century, when charitable trusts often exerted a strangleholdon vast amounts of capital because there was no way to break theiroutmoded provisions. Frederick Harris Goff, the father of The Cleve-land Foundation, was deeply troubled by the fact that so much wealthwas uselessly held in the icy grip of irrevocable wills-a phenomenonthat came to be characterized as "the dead hand of the past." Accordingto his wife, Fred Goff spoke so incessantly about the unfortunate reignof the dead hand that "it had a depressing effect upon the youngestmember of the family, who asked in a frightened tone to be told whereit was and what it did."

Goffs biography was recited at a Newcomen Society dinner here in

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Cleveland back in 195 I, and I will not repeat it this evening. Sufficeit to say that his law firm, Kline, Tolles, Goff & Morley (which, in-cidentally, was a predecessor of my present firm) was a leading corpo-rate firm in Cleveland around the turn of the century, and Goff wasregarded as a "super trouble shooter" within that firm.

Goff left his law practice in 1908 to serve as president of the Cleve-land Trust Company (today known as Ameritrust). As a lawyer and abanker Goff had been the administrator of many large bequests, and inthat connection he had observed firsthand how quickly posthumousgifts made to charity could become obsolete or even harmful.

The problem was not his clients' lack of sagacity. The problem wasthe lack of a speedy, sure and convenient way by which the living couldoverride the outmoded provisions of any bequest, no matter how largeor small.

When Goff pondered the question of how the assets of his own estatecould be used to benefit the community which had been so good to him,he found himself coming back to one compelling thought, which helater expressed to Collier's magazine as follows:

How fine it would be if a man about to make a will could go to apermanently enduring organization-what Chief Justice Uohn]Marshall called an "artificial immortal being"-and say: "Here isa large sum of money that I shall presently no longer need. I wantto leave it to be used for the good of the community, but I haveno way of knowing what will be the greatest need of the commu-nity fifty years from now, or even ten years from now. Therefore,I place it in your hands, because you will be here, you and yoursuccessors, throughout the years, to determine what should bedone with this sum to make it most useful for people of each suc-ceeding generation."

Not surprisingly, Goff came to the conclusion that the ideal "im-mortal being" which he sought was his own bank. Couldn't ClevelandTrust administer a trust set up for local charitable purposes as effec-tively as any other kind of bequest? Couldn't the Board of Directors bethe living hand needed to ensure that the community always receivedthe maximum benefit from such an endowment? In the fall of 19 I3Goff decided to propose to his fellow bank directors that the bank be-come the trustee for a single great endowment, created from the union

CLEVELAND ATTORNEY AND BANKER FREDERICK

HARRIS GOFF, WHO INVENTED THE COMMUNITY

FOUNDATION CONCEPT IN 1914

of many gifts, that would have the broadest possible charitable pur-poses but would be limited in geographical scope to serving the resi-dents of the Cleveland area. They would call it a community trust.

The income from the trust's combined bequests would be madeavailable for "such charitable purposes as will best make for the men-tal, moral and physical improvement of the inhabitants of the City ofClevelaad." While donors to the foundation would have the option ofdesignating a more specific use for the income from their bequests,their wishes would continue to be observed "only insofar as the pur-poses indicated shall seem to the trustee wise and most widely benefi-cial." With this provision, Goff had finally conquered the dead hand.

Once his plan was drafted, Goff sent copies to dozens of people,asking them to comment. One who responded was Livy S. Richard,an editorial writer at the Cleveland Press. Richard suggested that moneyintended for the use of the community should be controlled by com-munity leaders, rather than the bank. Goff eventually accepted thissuggestion and revised his plan to incorporate a new entity with the

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power to determine how the foundation's income should be distributed:a "committee to distribute," Goff called it.

The five-member committee was to consist of "residents of Cleve-land, men or women interested in welfare work, possessing a knowl-edge of the civic, educational, physical and moral needs of the com-munity." While two members were to be chosen by the directors ofCleveland Trust, Goff provided that a majority would be named bypublic officials, with the mayor of Cleveland, the presiding judge ofthe Probate Court of Cuyahoga County and the chief justice of theUnited States District Court each having one appointment.

I would like to note parenthetically that when the Distribution Com-mittee was increased to eleven members in the late sixties, the numberof public or quasi-public officials with appointing authority was ex-panded to five, so as to add to the original three public members thechief justice of the Court of Appeals, Eighth Judicial District of Ohio,and the president of the Board of Trustees of the Federation for Com-munity Planning. The five public authorities now appoint five mem-bers of the Distribution Committee, and we colloquially refer to thelatter five as the "public members." Another five members are ap-pointed by the trustee banks.

The eleventh member of the Distribution Committee is selected bythe five so-called "public members." In actual practice, once any of theeleven members is appointed, he or she acts totally independently as acollegial member of the Distribution Committee, without regard to theoriginal source of appointment.

The foundation recently amended its governing instruments to re-quire that henceforth any appointments must be acceptable to the Dis-tribution Committee; the purpose of that change is to help ensure thatthe calibre of the persons appointed will never be compromised and toencourage diversity of background in the members of the committee.

Having ensured this measure of public accountability, Goff pre-sented his Resolution and Declaration of Trust Creating the Founda-tion to the bank Board in late December 1913. On January 2, 19 14,The Cleveland Foundation was established by a vote of ClevelandTrust's directors.

The foundation was barely six weeks old when Goff informed theCleveland Press that "a great social and economic survey of Cleveland,

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to uncover the causes of poverty and crime and point out the cure," wasto be its first work. With this public announcement, made when theconcept of a charitable trust held for the benefit of an entire city wasstill nothing more than words on paper, Fred Goff revealed his consid-erable expectations for the role that such a trust could play in the life ofits community.

As events would have it, The Cleveland Foundation never under-took the comprehensive municipal survey which Goff had envisioned.Once the founder's plans for the new community trust were publicized,the foundation was approached from all quarters with requests that itconduct specific studies of a multitude of social evils. From the menuof problems which were presented, the foundation decided to select,over the course of its first decade in existence, eight topics which itdeemed sufficiently weighty to engage the spirited public debate re-quired to prompt reform. Each of these eight independent and largelyunrelated surveys was carried out by a team of national experts. Alltold, they cost more than $200,00o--a princely sum in those days thatGoff, his friends and Cleveland Trust itself underwrote with apparentgood cheer.

Several of the surveys yielded only modest fruit. But the three larg-est led to much-needed reforms in Cleveland's systems of public edu-cation, recreation and the administration of justice. Within ten years ofthe education survey's completion, more than ninety of its one hundredrecommendations were implemented in the schools. The major accom-plishment of the recreation survey was the creation of the "EmeraldNecklace," the enviable system of greensward and parkways that encir-cles Cleveland today. The Cleveland Foundation's crime survey, con-ducted by Harvard Law School Dean Roscoe Pound and a promisingyoung faculty member by the name of Felix Frankfurter, resulted in acomplete overhaul of the city's Dickensian law enforcement, justice andpenal systems that won praise as far away as England.

Interestingly, two of the eight surveys could have changed, dramat-ically and favorably, the course of Cleveland's economic development,but unfortunately, both came to naught at the time. A study of Cleve-land's lakefront aimed at turning it into a major recreational resourcein the midwest was proposed by the foundation's first full-time direc-tor, Raymond Moley, but it was shelved when he accepted a job as aPolitical Science professor at Columbia U niversity-a position thatlater led, incidentally, to his becoming a member of FDR's "brain

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THE CLEVELAND FOUNDATION'S EARLY SURVEY OF PUBLIC EDUCATION RESULTED IN THE

TRANSFORMATION OF THE CITY'S ANTIQUATED SCHOOLS INTO A MODEL SYSTEM

trust." The second was a survey of higher education; its principal rec-ommendation, that Western Reserve College and Case School of Ap-plied Science be merged into a great municipal university to rival thosein New York, Boston and Chicago, went unheeded. Itwould be left tolater generations of Cleveland Foundation leaders to undertake thelakefront's redevelopment and to assist in strengthening the finallymerged Case Western Reserve University. Nonetheless, the surveydecade, which ended in the mid-twenties, was critical in establishing aprecedent for the foundation to act as a civic agenda-setter and prob-lem-solver.

Fred Goff died in 1923. Bereft of the founder's vision and encour-agement, The Cleveland Foundation nearly went under. At the time,the foundation's endowment was generating less than $25,000 an-nually, and its subsidy from Cleveland Trust, with Goff gone, wouldsoon be limited to $5,000 a year. There was little room in such anaustere budget for exhaustive, expensive studies, and the higher edu-cation survey, which was completed in the fall of 1924, was the last ofthe surveys which had been contemplated originally.

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So while the concept of a community foundation had been announcedwith great promise in 1914, in Cleveland the institution itself lan-guished in the late 1920S.

Two events saved it.

The first was set in motion in late 1930, when the Board of Directorsof Cleveland Trust Company approved an amended charter for thefoundation with the rather imposing title of the Resolution and Decla-ration of Trust Creating the Multiple Trusteeship. That document al-lowed a prospective donor to name as trustee of his or her bequest tothe foundation the trust company with which he or she was accustomedto doing business. This development did not change the internal oper-ation of the foundation in any major way, but it did result in a newTrustees Committee composed of the presidents of the participatingbanks, who assumed the duties of managing the foundation's assets thathad previously been Cleveland Trust's alone.

The second providential event occurred in 193 I, when the founda-tion received its largest bequest up to that time. The donor was the lateHarry Coulby, a partner in the firm of Pickands Mather & Company,a major supplier of raw materials to the steel industry. Upon his deathat age sixty-four, the childless "Czar of the Great Lakes," as he wasthen known, left $3 million to the foundation, a godsend that skyrock-eted its income in 193 I to $250,000.

I was amazed to learn that The Cleveland Foundation's endowmentdid not reach the $lo-million level until 1946, and that it did not ex-ceed the $20-million mark until 1956. But during the last three de-cades, the foundation's assets have grown steadily. And with this in-crease in corpus came a change in the foundation's focus toward flexibleservice to donors. During this period The Cleveland Foundationpioneered in creating several innovative programs for donors that arenow industry standards. The Combined Fund was established to en-courage small gifts and bequests, which could be administered moreinexpensively as a single account. That particular fund now exceeds$23 million-a testament to the widespread appeal of the communityfoundation concept and the generosity of many non-affluent Cleve-landers.

And in the seventies, former Distribution Committee ChairmanJohn Sherwin, Sr. invented what is known today as a "supporting or-

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DURING THE DEPRESSION, THE FOUNDATION STAFF LED A MUNICIPAL SLUM-CLEARING

EFFORT THAT SAW THE COUNTRY'S FIRST PUBLIC HOUSING BUILT IN CLEVELAND IN 1937

ganization," when he and his wife Frances Wick Sherwin transformedtheir family's private foundation into the affiliated Sherwick Fund ofThe Cleveland Foundation. With assets of more than $ ro million, theSherwick Fund is the largest of what are now the foundation's sevensupporting organizations, each of which is allowed to maintain its owngrantmaking identity while taking advantage of the unparalleled ser-vices offered by the foundation's thirty-eight-person staff.

Some Recent AccomplishmentsFourth, let us contemplate a few of the foundation's more recent

major accomplishments.

For the foundation's first five decades its staff consisted of two per-sons: a director and a secretary. As more and more of their time wasconsumed in paperwork generated by the foundation's growing list ofannual grantees, the Distribution Committee had to leave to otherhands direct action on the city's most pressing problems. (One notableexception was staff leadership of a municipal slum-clearing effort thatbuilt the country's first public housing in Cleveland in 1937.) But the

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PLAYHOUSE SQUARE CENTER, A NEW PERFORMING ARTS COMPLEX, WAS MADE POSSIBLE

BY THE FOUNDATION'S UNWAVERING SUPPORT OF A DECADE-LONG CAMPAIGN TO RE-

STORE THREE MAGNIFICENT OLD THEATERS

turbulent,sixties brought new challenges for Cleveland and the nation.In 196 I the Distribution Committee decided to undertake a demon-stration project to strengthen the practice of philanthropy in Cleveland.In conjunction with the Ford Foundation and several local private phi-lanthropies, it created the Greater Cleveland Associated Foundation toconduct research on inner-city problems and to make grants toward thesolution of those problems.

Chaired by retired Lubrizol Corporation founder Kent H. Smithand staffed by Dr. James A. ("Dolph") Norton and Barbara HaasRawson, the Associated Foundation sought to remedy the lack of edu-cational, employment and housing opportunities which were fuelingunrest in the low-income areas of the city. When Dolph Norton be-came director of The Cleveland Foundation after the two organizationsmerged in 1967, less than a year after riots devastated the black neigh-borhood of Hough, he encouraged the Distribution Committee to con-tinue the work of the Associated Foundation. The Committee did so,and its courage in taking on the most inflammatory problems of the dayhelped to confirm The Cleveland Foundation as an institution directlyinvolved in civic affairs.

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In the seventies and early eighties the foundation solidified its re-newed commitment to community leadership. Under the guidance ofmy immediate predecessor, TRW President Stanley C. Pace, and thefoundation's sixth director, Homer C. Wadsworth, The ClevelandFoundation demonstrated what could be accomplished by providingconsistent direction and sustained financial support to a carefully chosengroup of important civic ventures. Among them was a $30-millioncapital campaign to restore three abandoned theaters in downtownCleveland's once-thriving entertainment district, Playhouse Square. Inaddition to nurturing the decade-long restoration project with a seriesof capital and operating grants totalling nearly $3 million, the foun-dation helped to persuade the city's fledgling ballet, opera and classicaltheater companies and its modern dance concert promoters to take achance on locating there. The Playhouse Square theaters have now beentransformed into a magnificent performing arts center and a major re-gional tourist attraction, luring hundreds of thousands of entertain-ment seekers downtown annually.

In 1982, the foundation's Playhouse Square Development Subcom-mittee, which I chaired, recommended that the Distribution Commit-tee take an extraordinary step. To ensure that the entertainment dis-trict's further redevelopment proceed as envisioned, we suggested thatthe foundation buy a strategically placed property-a run-down office-retail complex adjacent to the theaters which we feared was about to fallinto the wrong hands. With its $3. 8-million purchase of the Bulkley-Selzer buildings, The Cleveland Foundation became one of the firstcommunity trusts in the country to invest a portion of its assets in amanner that directly advanced a program objective. This type of so-phisticated philanthropic maneuver is referred to as a "program-re-lated investment," or by the acronym "PRI." The investment was agood one-the foundation stabilized the area and spruced up the build-ing, thereby enhancing redevelopment in the area. Five years later wesold it to a responsible buyer at a profit.

In the early eighties The Cleveland Foundation undertook anotherlandmark civic venture. It decided to assist Famicos, a housing reha-bilitation organization begun by the late Sister Henrietta, with a planto construct 183 rental apartments in Hough. Because no private de-veloper was eager to invest in one of the most devastated neighborhoodsin Cleveland, the foundation lined up the $ 14. I million required from

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twenty-eight separate public and private funders, including the City ofCleveland, various Cleveland banks and the Ford Foundation. Thecomplicated financing package was the masterwork of then-civic affairsprogram officer Steven A. Minter.

That project, known as Lexington Village, was the first market-ratehousing to be built in Hough in fifty years. Ground has since beenbroken for an additional ninety-three units, bringing the total to 276.Shortly after his appointment as the foundation's seventh director inJanuary 1984, Steve Minter initiated the foundation's first formal stra-tegic plan. It allowed for further fine tuning of the organization's roleand mission. Now the foundation has a written description of a set ofstrategic concerns to guide its grantmaking, which permits the Distri-bution Committee to target financial resources and staff time accord-ingly.

The strategic plan made explicit a commitment to a new programarea of particular concern to me-economic development-while at thesame time reinforcing the foundation's continuing interest in the tra-ditional program areas of education, health, social services, the arts andcivic affairs. Among the priorities that the strategic plan identified asmost important were four related to encouraging the city's economicrevitalization: (I) helping to improve the competitiveness of the city'smanufacturing sector; (2) promoting the development of new smallbusinesses and growth industries; (3) fostering economic opportunitiesfor minorities and women; and (4) providing a supportive environ-ment for economic development.

For reasons of time I will cite only one program as an example ofthose which we funded pursuant to those four priorities: the Center forRegional Economic Issues, or REI, which is now located at Case West-ern Reserve University's Weatherhead School of Management. Thefoundation helped to establish REI and kept it alive until it grew to apoint where it could effectively provide the public and private sectorswith qualitative data and analysis about the region's economy. The REICenter has developed one of the most comprehensive regional eco-nomic databases in the nation. That database has been used by a numberof vital community projects, including Civic Vision, the City of Cleve-land's master development plan; Cleveland Tomorrow's strategic plan;and the evaluation of Cleveland's science and engineering base that ledto the creation of Cleveland's new Technology Leadership Council.

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Recently, the Distribution Committee and staff decided that we hadto step up dramatically the scale-and, for that matter, the pacing-ofthe foundation's involvement in certain vital endeavors, which weretaking place at a critical time in Cleveland's history. Our communityfaced many problems-how could we help to prioritize them?

After months of thoughtful discussion and deliberation, the Distri-bution Committee decided to commit up to $ 10 million, over andabove normal grantmaking, to two new "Special Initiatives," whichwere announced in the spring of 1987. This action required a rarerequest for a principal distribution, which I am pleased to say thetrustee banks unanimously granted.

The first of the Special Initiatives resulted in the foundation's deci-sion to champion the Cleveland Initiative for Education, a campaignof the Greater Cleveland Roundtable to revitalize the Cleveland PublicSchools by means of student scholarship and employment programs.The now well-known "Scholarship-in-Escrow" component of thatcampaign, proposed by Cleveland School Superintendent Alfred Tu-tela, is based on the theory that a sense of hopefulness about the futurecan be engendered in disaffected students by rewarding them withmoney set aside for college education or post-secondary technical train-ing for each passing grade earned in core academic courses-${0 foran A, $30 for a Band $20 for a C. The foundation's lead grant of $3million to the unique Cleveland Initiative for Education program hasattracted more than $ ro million in additional funding to date, and sofar the enthusiastic response of the students, teachers, principals, par-ents and higher education providers have exceeded our wildest expec-tations.

Still in its formative stages, the foundation's second Special Initiativefocuses on rebuilding Cleveland's deteriorating neighborhoods. Onecomponent that the foundation has funded is the new NeighborhoodProgress, Incorporated (NPI), a coalition of corporate, financial, pub-lic and philanthropic funders headed by James Ross, chairman of BPAmerica which is interested in helping community developmentgroups maximize their ability to produce low- and middle-incomehousing and resuscitate commercial development in their neighbor-hoods.

Last year the Distribution Committee expanded its commitment toprojects of scale by announcing a third Special Initiative. To help com-

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plete the city's transformation into a regional convention center andtourist destination, the foundation will invest over the next three to fiveyears approximately $5 million on the recreational redevelopment ofCleveland's underutilized lakefront. As the funder of a 1976 study ofCleveland's lakefront parks, which the city had unfortunately allowedto fall into disrepair, the foundation helped to pave the way for theirtakeover by the State of Ohio, which has since expended $40 millionto fix them up. Edgewater, Gordon and Wildwood are now the mostheavily used parks in the state, with attendance averaging eight millionannually.

Encouraged by this success, the foundation next commissioned amaster redevelopment plan for the critical lakefront property adjoiningdowntown Cleveland. Planning has already resulted in the creation ofa new inner lake near Cleveland's Municipal Stadium called NorthCoast Harbor, which will be home to such future amenities as anaquarium, a maritime center, a hotel and related retail and residentialfacilities. The thrust of the foundation's third Initiative will be to en-sure completion of the master plan, which could result in up to $ Ibillion in new development.

The name "Cleveland" Foundation perhaps belies the fact that thefoundation's geographic reach extends beyond the municipal bounda-ries of the city of Cleveland. The foundation's activities and grantsextend throughout greater Cleveland, and last year we attempted tounderscore this outreach by establishing a Lake-Geauga Fund withinthe foundation's assets; the income from that fund is devoted exclu-sively to community needs in those two sister counties. I leave to mysuccessors the question of whether our name should be changed to TheGreater Cleveland Foundation, which would more genuinely reflectthe scope of our endeavors.

The FutureFifth, and finally, what about the future? In my mind the potential

future contribution of The Cleveland Foundation to this community istremendous. Fred Goffs original concept took decades to reach mean-ingful proportions, but today many would agree with Goffs assistant,Ralph A. Hayes, who went on to become the founding director of theNew York Community Trust, when he predicted more than six dec-ades ago in a speech to the City Club of Cleveland that the communityfoundation concept would come to be regarded as this city's most im-

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THE CLEVELAND FOUNDATION PLAYED A CATALYTIC ROLE IN THE CREATION OF NORTH

COAST HARBOR, A NEW RECREATIONAL AMENITY WHICH OPENED TO THE PUBLIC ON

CLEVELAND'S UNDER UTILIZED LAKEFRONT IN 1988

portant contribution to the ideas of the world. Since its establishmentin 1914, The Cleveland Foundation has served as a model for some320 community foundations in the United States, twenty-seven in Can-ada and twelve in England, and more are being started every year.

The concept of a community foundation has proved to be popular, Ibelieve, because it is as simple as it is ingenious. A community foun-dation is the means by which those with a common commitment to acommunity's well being can contribute to building a permanent andsubstantial pool of funds, the income from which is used exclusivelyfor local charitable purposes. Yet, because it is governed by a board ofvolunteers who have the independence to determine the best use of theincome, a community foundation is also highly flexible, able to respondquickly to a community's ever-changing needs.

Realizing that there is a new generation of potential philanthropistswho may be unfamiliar with the success of the community foundationconcept, The Cleveland Foundation has recently stepped up its activi-ties in the area of asset development. We asked a member of the Dis-

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tribution Committee to chair a new development effort, appointed afull-time development officer, composed needed documents, and spoketo groups of prospective donors or their lawyers, accountants or finan-cial advisors. Our marketing campaign has been low-key and digni-fied, but we now recognize that it is essential if The Cleveland Foun-dation is to retain its ability to respond effectively to the tremendouschallenges and diverse opportunities that will face our community inthe years ahead. In the process of our development effort, we believewe have educated many Clevelanders about what wonderful creaturescommunity foundations are.

As I try to envision the new directions in which The ClevelandFoundation will evolve over the course of the next quarter-century, Iam reminded of how far it has come. It took fifty years for the foun-dation's assets to reach the $20-million mark, during which time itdisbursed $20 million in total. Today our assets are twenty-five timesthat size and are growing steadily, and our grants far exceed $20 mil-lion every single year. I am also reminded that the key to the greatsuccess and value of the foundation is the fact that its future directionswill be determined not by me and my contemporaries but by futureDistribution Committees. In the words of our founder, it is they andtheir successors who "will be here. . . throughout the years, to deter-mine what should be done with this sum to make it most useful forpeople of each succeeding generation."

What a fabulous future the foundation, and the Cleveland areawhich it sustains, have in store!

It has been a great privilege to tell you the story of The ClevelandFoundation this evening. We thank and salute The Newcomen Societyfor affording us this opportunity.

THE END

"Actorum Memores simul affectamus Agenda!"

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THE NEWCOMEN SOCIETYOF THE UNITED STATES

INAPRIL 1923, the late L. F. Loree (1858-194°) of New York, then deanof American railroad presidents, establisheda group now known as "AmericanNewcomen" and interested in BusinessHistory, as distinguishedfrom political

history. Its objectives center in the beginnings, growth, development, contributions,and influence of Industry, Transportation, Communication, the Utilities, Mining,Agriculture, Banking, Finance, Economics, Insurance, Education, Invention,and the Law--these and correlated historical fields. In short, the background ofthosefactors which have contributed or are contributing to theprogress of Mankind.

The Newcomen Society of the United States is a nonprofit membership corp,o-ration chartered in I96I under the Charitable Law of the State of Maine, withheadquarters at 412 Newcomen Road, Exton, Pennsylvania 19341, some fivemiles east of Downingtown, Pennsylvania, and 32 miles west of the City ofPhiladelphia. Here also is located The Thomas Newcomen Memorial Libraryand Museum in Steam Technology and Industrial History, a reference collection,including microfilm, open to the public for research and dealing with the subjectsto which the Society devotes attention.

Meetings are held throughout the United States of America and across Canadaat which N ewcomen Addresses are presented by leaders in their respective fields.

The approach in most cases has been a life-story of corporate organizations,interpreted through the ambitions, the successesand failures, and the ultimateachievements of those pioneers whose efforts laid the foundations of the particularenterprise.

The Society's name perpetuates the life and work of Thomas Newcomen (1663-I729), the British pioneer, whose valuable contributions in improvements to thenewly invented Steam Engine brought him lastingfame in thefield of the MechanicArts. The Newcomen Engines, whose period of use was from 1712 to 1775,paved a way for the Industrial Revolution, Newcomen's inventive genius precededby more than 50 years the brilliant work in Steam by the worldjamous JamesWatt.

The Newcomen Society of the United States is affiliated with The NewcomenSociety for the Study of the History of Engineering and Technology, with officesat The Science Museum, South Kensington, London, S.W. 7, England. TheSociety is also associated in union with the Royal Society for the Encouragementof Arts, Manufactures and Commerce, whose offices are at 6 John Adam Street,London, W.C. 2, England.

Members of American Newcomen, when in Europe, are invited to visit thehome of Thomas Newcomen at Dartmouth in South Devonshire, England, andto see the Dartmouth Newcomen Engine working.

"The roads you travel so briskly

lead out of dim antiquity,

and you study the past chiefly because

of its bearing on the living present

and its promise for the future. "

-LIEUTENANT GENERAL JAMES G. HARBORD,K.C.M.G., D.S.M., LL.D., U.S. ARMY (RET.)

(I866-I947)Late American Member of Council at London

The Newcomen Societyfor the study of the history ofEngineering and Technology