Annual Letter from the Trustees and Co-CEOs

The year 2013 was another strong year for the Otto Bremer Foundation. Our core investment, Bremer Financial Corporation, delivered solid performance with a corresponding increase in dividends. Our nonbank investment portfolio was also a contributor to increased growth. Consequently, we distributed a record $38.3 million in grants and program-related investments.

As stated in last year’s annual letter, the Otto Bremer Foundation is a “learning organization.” Continuous learning inspires change, and while change can be unsettling, it has also been a source of strength for the Foundation. Over this past year, we have clarified the trustees’ more active role in the management of the OBF, a unique organization that spans banking, investments and philanthropy. With the increased leadership of the trustees on a day-to-day basis, we have agreed upon an organizational change that realigns the Foundation under a new operating model. With this change, the position of Executive Director of Philanthropy is being eliminated. We have used this opportunity to see how all of the pieces fit together. We believe that a team approach will be effective in supporting the philanthropic work of the Foundation as the trustees work alongside our talented employees who do great work, day in and day out. This new operating structure will allow us to better serve as a resource to organizations that help strengthen Bremer Bank communities while continuing to be knowledgeable about their assets and issues.

This change would not be complete without expressing sincere appreciation for Randi Ilyse Roth’s work over the past six years. She has fostered a highly skilled team of program officers and administrative staff. In addition, she provided strategic leadership as the Foundation developed and implemented policies and processes to ensure that our grantmaking continues to build communities in which basic needs are met, mutual regard is prized and everyone has the opportunity for full economic, civic and social participation.

We are both inspired by—and challenged by—our growth. Our investment returns have provided increased funds to distribute. At the same time, both the needs of our communities and the number of organizations working on innovative solutions have increased. This increased dynamic demands that we continue to build upon our understanding of the existing and emerging issues and the viable projects and programs that address them to markedly strengthen the fabric of a community and surrounding region.

While financial support is the most recognized and tangible investment in communities that the Foundation makes, we have discovered other ways to increase our impact. Former president of the Council on Foundations and ambassador to South Africa, James A. Joseph, articulated the concept that foundations are in a position to leverage more than their financial resources, or Conventional Capital as he calls it, in achieving desired outcomes. Foundations have other forms of assets that include social, moral, intellectual and reputational capital as well. It is clear what financial investment looks like; the others may be less apparent.

Social Capital. Underlying the concept of Social Capital is the idea that, to quote Ambassador Joseph, “If philanthropy is to be effective, then the people affected must be included in both the planning and implementation. The old question what can we do for them, or about them, must change to what can we do with them, how can we work together.” It is through two-way conversations, between the Foundation and community members, that generally agreed-upon priorities and proven solutions can be identified and everybody’s contribution brought into play.

Moral Capital. Moral Capital speaks to the underlying values that shape our Foundation’s mission. We have an opportunity to bring attention to those values that we share with the community, providing the impetus to develop ways to work together and move the community forward with a common purpose.

Intellectual Capital. After more than seventy years of working with many communities and nonprofits across three states, the Foundation has accumulated knowledge about communities and their assets, broad issues and effective solutions. We also know that many organizations are a valuable information resource about their specific areas of expertise. Finding ways to share this information through meetings and an accessible communication network can provide a valuable tool for the Foundation and organizations to learn from each other for the benefit of all.

Reputational Capital. Over time, a foundation develops a reputation in the community. Once understanding this premise, it makes sense to intentionally leverage the Foundation’s reputation when, by doing so, we can give validity to an initiative or organization that can result in additional resources from like-minded funders or supporters.

There are multiple benefits when we understand and implement the spectrum of assets that we possess. We obtain deeper knowledge about both issues and solutions, we create partnerships with others in furthering common goals, and we ensure that those who are ultimate beneficiaries of the Foundation’s grants are given opportunities to be heard and to be actively involved in the work. With the knowledge we gain from deeper involvement in the communities and listening to perspectives coming from community leaders, our grantmaking decisions are made with greater understanding of the issues and viable solutions.

As we move forward, we will continue to look for additional ways to incorporate local knowledge and insights into our work. And with continued success of the Foundation’s investment portfolio, we can have the expectation that our grantmaking will truly move communities forward.

Charlotte S. Johnson
S. Brian Lipschultz
Daniel C. Reardon