Foundations give money. Ministries receive money. Development professionals run back and forth between them. The rules are clear. The game is well-defined and you can only wear one uniform at a time. It's that simple and we're all clear on which side of the table we are sitting. Right?Well, it used to be that simple until a number of foundations started being formed whose principals wanted to start a new game, a game that looked more like the way they made the money in the first place. It's a game where you play any number of roles and you and you need to be both focused and comfortable with ambiguity. It's not for everyone but it is an option for an increasing number of people in The Gathering. We recently interviewed Randy Samelson, the founder of Counsel and Capital in Colorado Springs, Colorado, about the work of his new foundation.
Gathering: Randy, what is the mission and purpose of Counsel and Capital?
Randy: The mission of Counsel and Capital is, "To build bridges of trust and accountability between evangelical Christian ministries and donors." Our purpose is to help create an efficient movement of funds from donors to ministries. In other words, we hope to replicate what certain investment banking firms, such as Morgan Stanley, have done in the for-profit world. Through the efforts of those firms, the flow of substantial funds between astute investors looking to make wise use of their funds, and corporations in need of capital for worthwhile and significant expansions has been greatly facilitated. All too frequently a gulf exists between ministries that need money and donors who want to give wisely. Some ministries do not equally yoke passionate, visionary leadership with administrative disciplines. However, as we read the Scripture's accounts of Joseph, Daniel and Nehemiah, in each case we note that the gifts of administration and governance are firmly demonstrated in these men prior to the ministry impact for which they are most widely known. There is an increasing desire among all of us who are foundation donors to support those ministries that evidence both vision and discipline.
Gathering: But investment bankers like Morgan Stanley have made their money both in fees and having a piece of the transaction. Are you planning on charging fees to the ministries just like a fund-raising firm or are you planning to be paid by the donors?
Randy: Neither. We will not charge any fees or be paid by either party. In that way we are different from an investment banker. Our "pay" is assisting a ministry to attract capital and assuring a donor of an effective and productive investment. We are a non-profit organization that, without charge, serves both ministries and donors. That is one part of our contribution but not the most important part.
Gathering: What do you mean by that?
Randy: For-profit corporations and investors benefit from an investment banking system that, prior to the movement of capital, (a) offers counsel to corporations that prepares them for success, (b) creates trust between their corporate clients and investors, and (c) assures proper flows of comprehensive information (i.e., prospectus/disclosure document). We believe ministries and donors have a similar need, and that the role of the investment banker ought to be transplanted into the Christian world. During this century, extraordinary economic progress has occurred. One of the main reasons is the investment banking system has provided an improved process by which money is moved between Main Street and Wall Street. The hallmark of the investment banker is counsel and trustworthiness. Both the corporate clients and investors learned to trust in the advice of Morgan Stanley and other similar firms.
Gathering: So, how does Counsel and Capital differ from a traditional grant making foundation's due diligence prior to a grant?
Randy: By providing both counsel and capital. Most foundations understandably restrict their activities to the important function of reviewing and making grants. If our ministry clients, who will receive from us either a Comprehensive Review of their operations or a Project Review that is focused on a particular initiative, choose to adopt our recommended plans, the potential improvements in their operations might increase the likelihood of a favorable review of the ministries grant requests. As well, we make a significant commitment of our own capital if they adopt the recommended plan for improvements. If we have confidence in the ministry we are anxious to share in the funding of the venture.
Gathering: What do you mean by "full disclosure?"
Randy: It is simply telling the whole story ahead of time. It always includes a history of the company's management, the purpose of the business, the planned use of the proceeds, complete financial information, areas of weakness and an explanation of the risk factors. Many foundations do not receive "full disclosure" information. So we started asking, "Where in the evangelical world is a Morgan Stanley type firm?" We wanted to know who is providing counsel to ministries to enhance their ability to access substantial investment funds based on the same criteria Morgan Stanley would use. Where are the disclosure documents? Where is the quality, the integrity, the trustworthy counsel and endorsement that have been so key in the enormous economic growth of this century? Foundations have more funds than ever to give and ministries have more opportunities but what is lacking is the role played by the investment banker. A disclosure document that carried the name Morgan Stanley virtually assured adequate funds for the corporation and successful experiences for the investor. We want Counsel and Capital to have that same imprimatur among evangelical donors and ministries.
Gathering: What has been the response to Counsel and Capital from ministries and other foundations?
Randy: The responses from both donors and ministries have been very favorable, and are, we believe, God's affirmation that the vision and concepts of Counsel and Capital should be pursued. Already, staff and volunteers have begun serving as catalysts to help bring ministries and donors together for enhanced effectiveness, and we are seeing positive results. One large international ministry was able to retire all their bank debt in two years. In addition, they funded their designated program liability, closed an outdated pension plan, established policies to guide their endowment management, and restored adequate internal working capital to the ministry. A donor to a Christian school has told us that without our being involved he would have never gained the confidence that caused him to give $4,000,000 for a new middle school expansion. A major scripture distribution ministry told us that the "risk-sharing" feature of our project financing gave them the courage to try new projects.
Gathering: One final question. What are Counsel and Capital's most important needs right now?
Randy: Two things. First, individuals with experience in administration and corporate governance who will help us provide top quality counsel to ministries thereby expanding the number of ministries served. Second, increased contact with major donors who are willing to communicate with us regarding their most pressing concerns and what might help increase their willingness to expand their giving.