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Kaye M. Ridolfi Ginger F. Mlakar Kristin Warzocha Senior Vice President of Advancement Senior Counsel & Director, Donor Relations Vice President of External Affairs The Cleveland Foundation The Cleveland Foundation The Greater Cleveland Food Bank [email protected] [email protected] [email protected] 216.615.7141 216.615.7187 216.738.2064
Organizational Endowments:
Recruiting Agency Endowments, Pitfalls, and
Approach
Sunday, October 19, 2014
Agenda
• Introduction
• Establishing and Growing an
Organizational Fund
• Benefits and Challenges
• Organizational Partner Perspective
3
What is an Organizational Fund?• Contractual arrangement between the foundation and a IRC Section 501 (c)(3) organization
• Established as either an agency account, fully accessible at any time for any reason by your Board, or as a true endowment
• Can be effectively combined with your efforts to build endowment or reserve fundsadditional contributions of any size can be made at any time with full tax advantages
6
Seed Money Agreement
Partnership
Establishing an Organizational Fund
5
Fund Growth
Investment Growth
Additional Contributions
Distribution
Seed Money
Fund Growth
Nationwide Data Summary► Data Sources:
● CF Insights Benchmark Data: http://cfinsights.org/Tools/BenchmarkingCustomReports.aspx. Approximately 240 organizations actively update data
● Individual foundation websites, annual reports or other publications
● Columbus Survey 2013 (For total foundation assets)
► Foundations focused on:
● From CF Insights focused on organizations listing endowment/agency data of $30 million or higher
● And/or top 20 foundations by total assets
► Findings:
● CF Insights shows 100+ organizations with organizational fund assets of $1 million or higher
● The foundation with largest assets found was Oklahoma City ~$165 Million, 300+ funds
● Cleveland Foundation Org Fund Assets = >$94 Million and 195+ funds. Fund sizes range from $10,000 to $40 million (Deaconess)
Benefits to an OrganizationPlanned Giving
• Helps sustain a nonprofit organization’s financial stability over the long-term
• Broadens donor giving possibilities
• Opportunity available to diverse group of potential contributors
Benefits to an OrganizationLeveraging Expertise
• Assigned donor relations staff person
• Being part of nearly 200 non-profit partners making a difference in Greater Cleveland
• Maximize long-term returns by contributing to larger investment pools exposed to the market
• Customized service
Benefits to an OrganizationIncrease in Options
• Acceptance of private stock, real estate and other unique assets
• Direct Giving through Cleveland Foundation website
• Educational forums
• Fund Marketing
Planned gift presentation and calculations
Website
Brochure
Benefits to an OrganizationFinancial Stewardship
Recordkeeping
Investment Oversight
Access to Online
Service
Gift Acknowledgements to donors
Summary of Partnership Opportunities
*build endowment funds that grow and benefit our community forever.
*offer donor involvement and help donors create an individual or family legacy.
*local organization meeting a broad range of changing local needs.
*provide a simple way to fulfill charitable interests, with low-cost administration.
*deliver personalized donor service that is flexible and responsive to unique needs.
*accept a wide variety of assets.
*offer maximum tax advantage.
*preserve donor intent even when community needs and organizations change.
*known for prudent stewardship and investment practices.
*offer full disclosure and transparency.
Challenges
• Competition• Other providers• Resistance to change• Fees
• Profitability• Increased staff time
• Agency vs. endowment funds
Organizational Partner PerspectiveGreater Cleveland Food Bank
Organizational Partner PerspectiveGreater Cleveland Food Bank
Who Are We?• Founded in 1979; Currently 100+
employees, $20 million budget
• Programs include mobile pantries, children’s nutrition initiative, summer food service, and SNAP outreach.
• Coordinates annual Harvest for Hunger campaign
• Largest hunger relief organization in Northeast Ohio; Serving six counties – Cuyahoga, Lake, Geauga, Ashtabula, Richland, and Ashland
• Provided access to nearly 45 million meals in 2014 through more than 750 partner agencies
Organizational Partner PerspectiveGreater Cleveland Food Bank
Why we affiliate with the Cleveland Foundation:
• Financial management expertise and guidance
• Planned giving and marketing services
• Reputation
Organizational Partner PerspectiveGreater Cleveland Food Bank
What has happened since:
Endowment Growth
2008 $229,002
2009 $243,222
2010 $344,696
2011 $440,356
2012 $444,161
2013 $606,119
2014 $965,919 (as of 6/30/2014)
Organizational Partner PerspectiveGreater Cleveland Food Bank
What has happened since:
Growth of Tomorrow’s Harvest Legacy Society
Currently 75 members (46 living, 29
deceased)
More than $600,000* in realized planned gifts in FY14
(*includes single estate gift of more than
$500,000)
Questions?
