|
In his essay on collaboration, John Murphy cites two large committees of leaders convened to help shape Arizona's agenda in the biosciences as well as regional arts and culture. This is merely the proverbial tip of the iceberg.
More than 300 people have participated in strategy sessions led by Foundation staff and consultants in the past year. Their suggestions and enthusiasm underscore the widespread interest among Arizonans in building a new economy and getting it right.
 We are most appreciative of the personal time and energy they commit to building future directions for the Foundation and the state. The names of the committee members appear on the page Participants: Bioscience and Arts Committees, along with co-chairs of six important bioscience workgroups. There is insufficient space to list all of the individuals who have generously provided their ideas and good counsel over the past year.
Convening forums and inviting the input of diverse Arizonans is an example of the Foundation's activity beyond the awarding of grants. In recent weeks, we faced a serious threat to our ability to continue these activities.
A bill in Congress proposed altering the little-known provision in federal law that requires private foundations to distribute annually a minimum of 5 percent of the net value of their assets. Current law allows a foundation to satisfy that requirement through a combination of grants and administrative or operating expenses. The legislation had proposed to exclude administrative expenses from the required distribution. Seen as a way to boost charitable giving, the bill would have placed an unforeseen burden on proactive, professionally run foundations, such as the Flinn Foundation and others in Arizona and nationally.
 In addition to invading the endowment to pay routine operating expenses such as rent, utilities, salaries, and investment and auditing costs, Flinn and other foundations would have needed to curtail "direct charitable expenses." For Flinn, these include the costs of coordinating meetings with local leaders to address a particular problem; hiring consultants to provide technical assistance to grantees; or producing a publication that defines an issue or need, such as Arizona's Bioscience Roadmap or The Arts in Arizona.
Grants comprise by far the largest share of the Flinn Foundation's annual distribution. But it takes additional funds to pay staff, to travel the state learning about needs and helping grantees to succeed, to maintain a Web site as the principal reference portal for those interested in building Arizona's future economy in the biosciences, or to cover the costs of providing pro bono meeting space to many of Arizona's nonprofit organizations. Such charitable expenditures are consistent with federal laws authorizing the formation of private foundations, and essential to fulfilling the objectives the Board has adopted for the Foundation.
 Fortunately, members of Arizona's Congressional delegation were helpful in supporting a compromise bill that retains most charitable costs in the 5-percent formula. Senator Jon Kyl and Congressmen J.D. Hayworth and John Shadegg showed particular interest in understanding the bill's potential ramifications and helping to ensure passage of responsible legislation. The inclusion of the more onerous provisions in the original legislation serves to highlight how poorly the role of foundations is understood in communities across the nation, and the need to tell our story more widely.
The foundation sector should welcome efforts to examine its performance and justify its tax privileges. But it should also defend its capacity to provide vital services and resources to society that other sectors cannot deliver. The Board of Directors is pledged to ensure that the Foundation continues to proactively address vital issues in a manner that will yield the greatest benefit to the state and its citizens, as Dr. and Mrs. Robert S. Flinn had wished.
| 
