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efrazier@charlotteobserver.com

Nearly a year after it created a pool of money to help the homeless and hungry, Foundation for the Carolinas is launching another initiative to help the city's struggling nonprofits.

It's called the Community Catalyst Fund, and like last winter's critical needs initiative, it is based on a $1 million challenge grant from the Leon Levine Foundation.

However, that's where the similarities end.

The new effort, which is expected to reach $5 million in coming months, won't pay for food, utilities or rent. Instead, it will be seed money to come up with strategies that rethink the way nonprofits do business, including innovative ways to raise revenue, create partnerships or implement mergers.

Another big difference: Science and art agencies are welcome to apply for grants, the first of which will be issued Dec. 12.

"From my perspective, the Catalyst Fund is the perfect complement to the Critical Need Response Fund," said Cathy Bessant, a Bank of America executive and chair of the committee of 17 community leaders who spearheaded the creation of the new effort.

"The critical need fund addressed immediate, dramatic needs, and yet we didn't cause operating models to change," she said. "This fund is about making the models more efficient and effective, with less duplication."

Those themes came up repeatedly during recent community meetings sponsored Mission Possible, a media coalition seeking solutions for the area's nonprofit crisis.

The same set of goals also appealed to Levine Foundation co-founders Sandra and Leon Levine, who have given millions in the past year to local charities dealing with increased demand.

"This is about helping nonprofits become stronger for the future," said Leon Levine. "We are delighted to be able to make an investment in the long-term growth and stability of this sector."

A study commissioned by the foundation this year revealed nearly 800 nonprofits have the potential for collaborations, partnerships and mergers.

It's those groups that the Catalyst Fund will reach out to, including invitations to attend seminars that will explain the possibilities. The foundation stressed that it isn't trying to force changes - read mergers - on nonprofits.

"Mergers are not the answer to every problem we face, and I think this response allows organizations to bring their own solutions," said Brian Collier, senor vice president of community philanthropy for the foundation. "It also allows us to bring some national best practices to the table and say: 'Can we make this a Charlotte solution?'"

Some local nonprofits have recently unveiled projects that are cited as examples of what the new money seeks to inspire. These include the merger of the Uptown Shelter and the Emergency Winter Shelter and a decision by Habitat for Humanity to save money by buying and repairing foreclosed homes, rather than building new ones.

Most local nonprofits are operating this year with vastly trimmed programs because of the recession, including an average of 40 percent cuts from United Way.

It's that money shortage that prompted the creation of the Community Catalyst Fund, which will be managed at no charge by the foundation, in collaboration with United Way and the Arts & Science Council. All told, it's estimated the community's large charities will face cuts of about $190 million this year.

"This (fund) is important because that gap is not going to be filled in traditional ways," said Laura Meyer, executive vice president of the foundation. "We are not in any way, shape or form going to be what we were before. But we do believe in the concept of hanging a lantern on a problem and attacking it."...

I love this idea - similar cities have launched this strategy in the past...it gives nonprofits another voice in the discussion.

Journal Photo by Lauren Carroll

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