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Organizational Endowments
1. Organizational Endowments:
Recruiting Agency Endowments,
Pitfalls, and Approach
Sunday, October 19, 2014
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
2. Agenda
• Introduction
• Establishing and Growing an Organizational Fund
• Benefits and Challenges
• Organizational Partner Perspective
3. 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 funds
additional contributions of any size can be made at
any time with full tax advantages
4. 6
Establishing an Organizational Fund
Seed Money Agreement Partnership
5. 5
Fund Growth
Investment
Growth
Additional
Contributions
Distribution
Seed Money
Fund Growth
6. 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)
7. Benefits to an Organization
Planned 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
8. Benefits to an Organization
Leveraging 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
9. Benefits to an Organization
Increase 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
10. Benefits to an Organization
Financial Stewardship
Recordkeeping
Investment
Oversight
Access to
Online Service
Gift
Acknowledgements
to donors
11. 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.
12. Challenges
• Competition
• Other providers
• Resistance to change
• Fees
• Profitability
• Increased staff time
• Agency vs. endowment funds
14. Organizational Partner Perspective
Greater 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
15. Organizational Partner Perspective
Greater Cleveland Food Bank
Why we affiliate with the Cleveland Foundation:
• Financial management expertise and
guidance
• Planned giving and marketing services
• Reputation
16. Organizational Partner Perspective
Greater 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)
17. Organizational Partner Perspective
Greater 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)