Investing in Community and Getting Better Returns than Wall Street

By Les Firestein   |   January 12, 2021

Tom Parker has been marinating in Santa Barbara philanthropy since the 1950s when, as a kid, he and his dad would distribute food to Santa Barbara’s homeless through the local Kiwanis Club. Tom says philanthropy has always been woven into Santa Barbara’s fabric because it’s a small enough place where it’s easy to see the impact of one’s good deeds – and enjoy the gratification that comes with it. 

“Very few businesses give you the kind of feeling of fulfillment a nonprofit can,” says the third-generation Santa Barbaran and president of the Hutton Parker Foundation.

The Hutton Parker Foundation primarily focuses on supporting Santa Barbara nonprofits, especially in the areas of Education, Health & Human Services, Civic & Community Development, Youth & Family Services, and Arts & Culture. The Foundation was started by Tom and his aunt-in-law who are sort of a riches-to-rags-back-to-riches story – with many valuable life lessons learned along the way.

Parker did well in real estate investing as a young man, so much so that when the real estate portfolio of his wife’s beloved aunt Betty Hutton became distressed in the 1980s, Tom had the flexibility – and wherewithal – to move his family to Orange County to work with Betty for quite a few years whilst turning around her ailing business and her underperforming assets.

As with Parker, philanthropy was always a priority for aunt Betty. So as soon as Betty’s financial ship was righted and the family had “enough,” Tom and Betty funneled the rest of their assets into their newly formed Hutton Parker Foundation. “You get to a certain point where it feels better to give back than to consume. If you are fortunate in life, that’s not just an obligation, it’s an ingrained part of you.” Not surprisingly, Parker is grooming his sons Christopher and Jess to take over the foundation and carry on the family legacy.

Parker’s philosophy as a philanthropist is that most of the charities he focuses on are great at their primary mission, but their good deeds could go further if these nonprofits ran better, leveraged assets, and found productive synergies. To this end Tom sees himself as more of an aggregator and super connector rather than a micromanager. He uses lessons learned streamlining his aunt’s businesses and has innovated a system whereby multiple nonprofits pool resources and invest in local real estate, and frequently (with Tom’s help) buy the buildings where they operate.  

“The local nonprofits don’t just need monetary funding; they need entrepreneurial support, innovative ideas, and energy. All these charities do great work, I just try to help make sure their business plans are sustainable.”

– Tom Parker

To facilitate its mission, the Hutton Parker Foundation makes below market loans to nonprofits, buys buildings, and has housed 55 nonprofits in 17 renovated Santa Barbara structures, not just saving these organizations millions in operating expenses, but greatly benefitting the larger community of Santa Barbara. “The local nonprofits don’t just need monetary funding; they need entrepreneurial support, innovative ideas, and energy. All these charities do great work, I just try to help make sure their business plans are sustainable.”

Parker says the key to his system is identifying and sometimes synthesizing collaborations, or as he likes to say, “Whatever you do, try to make sure everybody wins.” By maximizing symbioses, Parker scores a quintuple win for nonprofits, the people they serve, other nonprofits they partner with, and the communities where they’re located. 

Parker’s system (known as “tenant equity”) has been so successful there’s even a book about it: The Hundred Million Dollar Secret: Why and How Foundations Should Invest in Community Instead of Wall Street. Parker says he wrote the book because he was a “boring lecturer.” Although that is likely a fiction, Tom’s book in fact proves that foundations can yield superior returns by investing locally rather than in an ordinary portfolio of stocks and bonds. 

Parker is also a big believer in the utility and importance of data: that how a place (or group) is doing can be measured, providing data that’s invaluable in terms of allocating resources and focusing efforts. This is one of the reasons Hutton Parker is a main underwriter of UCSB’s “Indicators Project” – which literally measures leading indicators in a multiplicity of categories, showing how various aspects of a hyper local community is doing or at least trending.

As recently as this year, Tom “reused” data collected by the United Way during relief efforts for undocumented residents in the 2018 debris flow to spearhead a new outreach to undocumenteds today, during the pandemic. “Investing in our local communities is like watering a thirsty plant – you can see the local communities springing back to life,” says Parker.

For his achievements in philanthropy Tom has been awarded Santa Barbara County’s Philanthropist of the Year Award, the Santa Barbara Chamber of Commerce Founders Award, the Anti-Defamation League Distinguished Community Service Award, the Women’s Economic Ventures Man of Equality Award, and countless others. More importantly, Tom Parker has won the respect and gratitude of thousands of Santa Barbarans, though it is very clear this is not why he does it.

“For me, it’s the ‘teach a man to fish’ thing,” says Parker. “Helping nonprofits work better and sustain over the long haul is much more satisfying – and ultimately more useful – than simply writing a check.”

 

Santa Barbara Foundation

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For over 92 years, the Santa Barbara Foundation has been a catalyst for change. We analyze issues to identify challenges that burden people every day in Santa Barbara County. We convene community stakeholders to build coalitions and partner with nonprofits and other leaders working on the front lines. Together, we chart a direction and mobilize people like you to support the dynamic initiatives that makes this a better place, now and for generations to come.

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The Santa Barbara Foundation leads the effort to bring people and resources together to work for large scale, sustainable improvements in the community. We do that by facilitating dialogue among stakeholders- business leaders, government representatives, leaders of nonprofit organizations, residents and funders who want to create positive change. We look for the chance to form strategic partnerships to leverage our collective strengths and maximize the power of our donor’s dollars. Because we do extensive research into the greatest needs of the community and the people who deliver services, we are positioned to champion specific causes and organizations. We then advocate for the funding to transform innovative ideas into reality. Learn more about our work within the community.

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There are approximately 1,900 nonprofits in Santa Barbara County. Even the most diligent donor would find it daunting to try to learn about all of them and vet their work. In partnering with the Santa Barbara Foundation, donors can be assured that we award our grants through a rigorous process of research, planning, due diligence and evaluation. We work to identify and prioritize critical needs for strategic grantmaking requiring special focus and additional organizational resources. Once funded, we monitor and evaluate these initiatives for impact. We are committed to working with providers to maximize their effectiveness. Learn more about our grantmaking.

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SUPPORTING THE SOCIAL SECTOR

The Santa Barbara Foundation believes a healthy, high-achieving, creative social sector enables our county to fulfill its potential. To help make our nonprofits stronger and more resilient, we share knowledge through a series of capacity building workshops, leadership development, and technical assistance programs. We engage with practitioners to develop successful approaches for improved outcomes in the community. We connect them with funders and other nonprofits to make their efforts more powerful. Since this can be a demanding line of work, we recognize and reward hard work and excellence of those working in the social sector. Learn more about the Collaboration for Social Impact.