Organizational Endowments

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Kaye M. Ridolfi Ginger F. MlakarKristin Warzocha Senior Vice President of Advancement Senior Counsel & Director, Donor Relations Vice President of External Affairs The Cleveland Foundation The Cleveland FoundationThe Greater Cleveland Food Bank 216.615.7141 216.615.7187216.738.2064 Organizational Endowments: Recruiting Agency Endowments, Pitfalls, and Approach

Sunday, October 19, 2014


Introduction Establishing and Growing an Organizational Fund Benefits and Challenges Organizational Partner Perspective23

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


Seed MoneyAgreementPartnership

Establishing an Organizational Fund45

Fund GrowthInvestment GrowthAdditional ContributionsDistributionSeed MoneyFund Growth5

Nationwide Data Summary Data Sources:CF Insights Benchmark Data: Approximately 240 organizations actively update dataIndividual foundation websites, annual reports or other publicationsColumbus Survey 2013 (For total foundation assets) Foundations focused on:From CF Insights focused on organizations listing endowment/agency data of $30 million or higherAnd/or top 20 foundations by total assets Findings: CF Insights shows 100+ organizations with organizational fund assets of $1 million or higherThe foundation with largest assets found was Oklahoma City ~$165 Million, 300+ fundsCleveland 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 organizations 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 OptionsAcceptance of private stock, real estate and other unique assets Direct Giving through Cleveland Foundation websiteEducational forumsFund MarketingPlanned gift presentation and calculationsWebsiteBrochure

Benefits to an OrganizationFinancial Stewardship

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.

ChallengesCompetitionOther providersResistance to changeFees

ProfitabilityIncreased staff time

Agency vs. endowment funds

Organizational Partner PerspectiveGreater Cleveland Food Bank

Organizational Partner PerspectiveGreater Cleveland Food BankWho Are We?Founded in 1979; Currently 100+ employees, $20 million budgetPrograms include mobile pantries, childrens nutrition initiative, summer food service, and SNAP outreach.Coordinates annual Harvest for Hunger campaignLargest hunger relief organization in Northeast Ohio; Serving six counties Cuyahoga, Lake, Geauga, Ashtabula, Richland, and AshlandProvided access to nearly 45 million meals in 2014 through more than 750 partner agencies

Organizational Partner PerspectiveGreater Cleveland Food BankWhy we affiliate with the Cleveland Foundation:Financial management expertise and guidancePlanned giving and marketing servicesReputation

Organizational Partner PerspectiveGreater Cleveland Food BankWhat has happened since:Endowment Growth2008$229,0022009$243,2222010$344,6962011$440,3562012$444,1612013$606,1192014$965,919 (as of 6/30/2014)

Organizational Partner PerspectiveGreater Cleveland Food BankWhat has happened since:Growth of Tomorrows Harvest Legacy SocietyCurrently 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)