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 KRidolfi@Clevefdn.org GMlakar@clevefdn.org kwarzocha@clevelandfoodbank.org 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?