Kansas City, Mo. ? By Matt Campbell

Knight Ridder Newspapers

Kansas City, Mo. — The Kauffman Foundation has changed its bylaws to ensure that founder Ewing Marion Kauffman’s vision for nurturing the local community endures, Missouri Atty. Gen. Jay Nixon said Wednesday.

Nixon had issued a report in March recommending that the foundation, with $1.6 billion in assets, revise its structure to cement its ties to Kansas City. He gave it until Sept. 1 to respond.

At the time there were fears that the foundation would cease to fund local projects and might even move out of town — concerns that foundation leaders say were never valid.

At a news conference, Nixon said he was satisfied with the charity’s actions.

“This is a great day for Kansas City and for the Kauffman Foundation,” Nixon said.

“Over the past six months the foundation has addressed each of the recommendations we made, adopting nearly all of them to the letter. They did not agree entirely on every single issue, but I did not expect that they would.”

Bylaws amended

Specifically, the foundation has changed its bylaws so that:

• Charitable spending in the Kansas City area will remain consistent with historical levels, which has averaged about 50 percent of the foundation’s grants.
• The board of directors will be fixed at eight members, three of whom are to be residents of or have significant ties to Kansas City.
• The chief executive officer will live in the Kansas City area. Nixon said Kauffman CEO Carl J. Schramm complies with this requirement.

The foundation will remain headquartered in Kansas City unless the board votes unanimously to move.

The foundation also has strengthened its policies against conflicts of interest involving board members.

According to Kauffman records, organizations in Lawrence will receive more than $15,000 in grants from the foundation this year and share portions of another $1.1 million in grants.

The largest Lawrence beneficiary in recent years has been Kansas University’s School of Business, which uses Kauffman grants for its entrepreneurship program.

‘Foundation is stronger’

Foundation Chairman Tony Mayer said Wednesday that the board had always felt it was governing well. Mayer, however, said the board had begun to make changes and accelerated them along with the attorney general’s review.

“The foundation’s view of the process is that it has been useful, and the foundation is stronger for it,” Mayer said.

He acknowledged, however, that there had been concerns about the board’s commitment to Kansas City.

“They were never issues for the board,” Mayer said. “We’ve always felt a strong commitment to youth, to entrepreneurship and to Kansas City as a laboratory for many of the things that we do.”

Indeed, Nixon’s review found that 65 percent of the money awarded by the foundation in the previous five years had gone toward Kansas City area initiatives. The foundation reports it committed more than $140 million to the Kansas City area over the past two years.

Mr. K’s dreams

Kauffman, “Mr. K,” founded Marion Laboratories in 1950 and later became owner of the Kansas City Royals. He created his foundation in 1966.

Kauffman died in 1993 but left specific written and videotaped instructions concerning his wishes for the foundation.

The articles of incorporation failed to clearly state those purposes, Nixon’s review found. The review said it was clear that Kauffman intended the foundation to be national in reach but “to be a substantial and perpetual benefit to Kansas City.”

By Missouri law, the attorney general’s office serves as steward over nonprofits in the state and enforces regulations governing foundations and nonprofits.