Hal Cato, CEO, Community Foundation of Middle Tennessee
In an interview with Invest:, Hal Cato, CEO of the Community Foundation of Middle Tennessee, highlighted the organization’s critical role in addressing Nashville’s most pressing challenges, from affordable housing to social fragmentation. “Strong communities depend on strong interpersonal connections, and you can’t leave that to chance,” he said.
What were some significant milestones for the organization over the past 12 to 18 months?
In 2024, the Community Foundation achieved significant milestones. We grew by 30%, adding $225 million in assets under management. We revised our grant-making strategy, increasing the average grant size to nonprofit partners by over 200%. Our headquarters, now referred to as “The community’s clubhouse”, welcomed more than 17,000 people for meetings and convenings. We launched a $70 million catalyst fund in partnership with the city to help preserve affordable housing. Additionally, we helped establish the Nashville Early Education Coalition to address the child care crisis by uniting multiple sectors.
What recent partnerships has the Foundation formed, and what impact have they made?
The Catalyst Fund is a collaboration between Metro Nashville, the private sector, and philanthropy to build a new tool for affordable housing preservation and creation. We’ve had 13 different founding investors in that: almost every major bank, Vanderbilt University, a couple of foundations, and Metro.
Then there’s the collaboration around early childhood education that we’re co-leading with United Way. Other key partners include the State Department of Human Services, Metro, nearly every major foundation in town, our nonprofit service providers, and the Chamber of Commerce.
Our partnership with the mayor’s office will continue the work from Imagine Nashville. Our key anchor partners will always be Metro Nashville, the mayor’s office, the chamber, and United Way. I see us four as the legs of our city’s civic table, representing business, nonprofit, philanthropy, and government, which keep the city a true community.
Beyond affordable housing and child care, what other urgent community needs are you seeing, and how is the organization responding?
The last 90 days have turned the apple cart over in terms of community needs. I don’t think any of us had any idea how quickly things would change. Within 30 days, suddenly, you’ve got a community wondering about an economic recession. You’ve got nonprofits losing funding. You’ve got a city trying to stay on its toes just in terms of balancing its own budget and financial outlook. It’s been a game-changer. Meanwhile, we still obviously have what I’ll call an affordability crisis because it impacts everything. Some days it is overwhelming. When you consider that half of Davidson County has a household income under $50,000, it paints a stark picture of who is thriving versus who is just trying to survive.I love all the growth and everything, it’s great, but the growing divide between this proverbial tale of two cities, where we have those who are thriving and those who can barely survive here, is concerning. Yet our well-being is contingent upon everyone not just surviving, but thriving.
What trends are you seeing in donor behavior, and how are they shaping your approach?
We’re seeing more willingness for philanthropists to pool funds and address issues jointly. The challenges are too great for any one foundation, nonprofit, or elected official to solve alone. Now it’s common for four or five foundations to fund a single project, which didn’t happen before.
There’s more willingness to make unrestricted operating grants, trusting leaders to invest funds where needed. That’s the best thing for nonprofits. We’d never micromanage personal purchases that way, yet we’ve done it to nonprofits for decades.
The explosion of donor-advised funds (DAFs) is huge nationwide. Fidelity’s DAFs pushed out $50 million last year, making them Nashville’s largest funder. Nonprofits are figuring out how to engage these DAF holders.
Individuals still drive 60% of charitable gifts, more than double the government’s 29%. Unlike COVID’s unifying effect, current challenges divide us. With government resources decreasing, preserving safety net services is confusing but essential for our community.
How is the Foundation leveraging technology to strengthen donor engagement, track impact, and inform strategic investments in the community?
We’ve recently invested in a significant upgrade to our system, which is the backbone that runs the organization, to create a more robust platform that allows us to do a better job of tracking what our donors are supporting. This helps us be more effective in connecting them with opportunities that match their interests.
We have a platform called Giving Matters that is the most comprehensive database of nonprofit organizations in Middle Tennessee. We’re upgrading it and embedding it with AI capabilities that allow donors to use simple queries to find specific information quickly, such as which nonprofits are working on breast cancer in certain counties, particularly those with smaller budgets.
What are your top priorities over the next few years?
The most important word in our name isn’t foundation, it’s community. We’re facing a crisis of connection – too much time alone, too little with people different from us. Strong communities need strong interpersonal connections. We can’t leave that to chance. We’ll make relationship-building core to our investment strategy, creating a stronger culture of connection. This means investing in social capital like never before.
Second, we must connect better with our 1,000-plus fund holders. They want more communication about what we’re seeing and thinking. As leaders, we’ll connect donors to co-investment opportunities and introduce them to effective community leaders, often from smaller organizations doing vital work, that gets overlooked.
Third, we’re investing in nonprofit capacity building, leadership development, better salaries, technology, and making organizations more robust.
