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Jewish Foundation Trends

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Jewish Federation of Greater MetroWest trends for 2017

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Jewish Foundation Trends

  1. 1. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  2. 2. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  3. 3. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  4. 4. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  5. 5. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  6. 6. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  7. 7. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  8. 8. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  9. 9. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  10. 10. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  11. 11. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  12. 12. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  13. 13. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  14. 14. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  15. 15. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  16. 16. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  17. 17. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  18. 18. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  19. 19. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  20. 20. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  21. 21. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  22. 22. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  23. 23. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  24. 24. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  25. 25. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  26. 26. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  27. 27. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  28. 28. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  29. 29. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  30. 30. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  31. 31. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  32. 32. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  33. 33. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  34. 34. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  35. 35. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  36. 36. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  37. 37. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  38. 38. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  39. 39. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  40. 40. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  41. 41. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  42. 42. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  43. 43. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  44. 44. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  45. 45. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  46. 46. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  47. 47. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  48. 48. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  49. 49. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  50. 50. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  51. 51. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  52. 52. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  53. 53. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  54. 54. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  55. 55. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  56. 56. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  57. 57. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  58. 58. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  59. 59. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  60. 60. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  61. 61. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  62. 62. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  63. 63. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  64. 64. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  65. 65. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  66. 66. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  67. 67. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  68. 68. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  69. 69. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  70. 70. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  71. 71. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  72. 72. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  73. 73. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  74. 74. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  75. 75. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  76. 76. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  77. 77. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  78. 78. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  79. 79. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  80. 80. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  81. 81. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  82. 82. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  83. 83. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  84. 84. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  85. 85. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  86. 86. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  87. 87. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  88. 88. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  89. 89. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  90. 90. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  91. 91. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  92. 92. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  93. 93. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  94. 94. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  95. 95. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  96. 96. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  97. 97. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  98. 98. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  99. 99. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  100. 100. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  101. 101. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  102. 102. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  103. 103. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  104. 104. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  105. 105. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  106. 106. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  107. 107. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  108. 108. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  109. 109. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  110. 110. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website
  111. 111. JCFGMW Trends presentation Joseph C. Imberman LLC August 9, 2017 Foundation Retreat
  112. 112. Simple data • JCFGMW assets - $345,642,246 • JCFGMW distributions - $40,146,836 • Total assets in the Federation endowment system: 17.5 billion in 2015, likely 20 billion today. • All giving in 2016 – 390 billion with individuals leading the growth and bequests down by 9% • Bequests – 30.36 billion • First endowment funds created at the turn of the last century in 3-4 large ciites. • Data courtesy of Giving USA
  113. 113. Endowment trends in our system • Continuing dominance of the entire endowment system by growth in donor advised funds but growing visibility of large scale Centennial or endowment/capital campaigns focused on permanent funds • Comparative lack of true endowment • Continued efforts to secure endowment for the annual campaign (“unrestricted”) or PACE/LOJE – a 25 year project • Incredible growth over time from 1 billion to 20 billion
  114. 114. Trends continued • Dominance of the donor and his/her family in decision making. • Relatively high focus by the endowment/foundation funders on the Jewish community. 70% of distributions go to Jewish entities. • Limited number of nationally generated priorities for endowment, e.g. Birthright, CJL, Life and Legacy, Family Philanthropy… and complexity overseas and in Israel (40,000 amutot) …but no lack of institutions wanting support • Enormous challenge built into the system regarding creativity and innovation because of the nature of our focused asset base and decentralized governance structure • Creativity, technology, current unique projects tend to surface for private foundation donors at JFN. “Leading edge of the spear” • We occupy a unique middle ground between fund development and grant making and we prosper as community foundations when we are able to make partnerships with our most influential families, local funders and even corporate grantmakers. This requires unique personnel!
  115. 115. Trends • Variability in outlook by governance boards on their own role. Are we grant makers or fund developers? Are we here to strengthen the community or serve the interests of the families? • Confidence by donor families in the Federation CEO’s as stewards but lingering bickering between federations and foundations in 35 communities. The role of the Federation CEO and potentially the Foundation Director is crucial for endowment funders. (Lessons from Chicago and Cleveland). • Trust as the key variable in giving endowment to the community. That we will “do the right thing” and manage the assets well. This single phenomenon can produce enormous gifts (Montreal example). • Growth of the legacy movement pioneered by the Lester Society 30 years ago. Create a Jewish Legacy and Grinspoon Life and Legacy come into their own. • Investment business as the key variable in growth. As a system “we spend as much on fees as we send to Israel.” Investment as a driver of giving is frequently overlooked but never underestimated.
  116. 116. Trends • The biggest puzzle in federation life – how could we have this much money under management and so little flexibility with regard to its use? (Mark Wilf’s question) • Public vs. private foundations – the respective roles and advantages. • Lack of strategic planning, business model innovation, wholesale creativity particularly in places with two entities • Comparative lack of visibility and perceived importance by the community foundations. “We’re subservient”. • Continuing challenges in Washington to the charitable deduction, donor advised funds, estate tax charitable, etc. • Private critics surrounding the issue of donor advised funds and the “hoarding” of dollars for charitable purposes (Ray Madoff, etc.) • Enormous and continuing involvement of the corporate sector in philanthropy…investment firms, banks, trust companies are all offering both investment as well as family and grantmaking expertise. • Increasingly universities are charging fees for all types of legacy and endowment gifts….”built into the cake”.
  117. 117. What are our options as endowment entities? • Separate our donor advised fund operations from our permanent fund operations. • Continue to campaign for unrestricted and restricted endowments as a way of courting donor interest. • Funding and supporting simple eternal legacy development. • Adjusting the investment allocations toward growth • Perfecting the relationships between federation and foundation to make “seamless” a reality • Assure that federation annual campaigning and endowment development are integrated
  118. 118. Options • Manage on a continuous basis the development of needs data which promotes giving. Help the donor understand the community’s long term priorities which exceed the annual campaign…forever. • Anticipate the community’s needs and create programs to do more than react to emergencies. Involve donors in the conversation.
  119. 119. Montreal – learning from a big city Centennial endowment campaign • Two strong entities working together as seamlessly as possible to raise up to 200 million in new commitments, while… • Giving credit to 200 m of early gifts to the JCF • Federation seen by its CEO as a “one trick pony”; Foundation as the great legacy and endowment entity • Early recognition of donors and unusual lobby sculpture • Remarkable culture of giving and highly experienced strong staff and leadership; “the Bronfman event” • Some integration with annual campaign but largely seen as a separate project. Annual campaign raises approximately 38 million per year. Asset value of JCF now 1.2 billion as a result of one major gift. • Federation had earlier raised 70 million for a Generations fund devoted to Jewish identify…the involvement of 15 families dedicated to the subject.
  120. 120. References • Giving USA 2017 annual report • Bank of Montreal, “A Guide for Professional Financial Advisors, The Philanthropic Conversation”, sponsored by CAGP, Giv3 Foundation, PFC, 2017 • The U.S. Trust Study of The Philanthropic Conversation, Understanding Advisor Approaches, October 2013, U.S. Trust, Bank of America Private Wealth Management • Jewish Federations of North • America 2014 Annual Endowment Survey • “Community Foundation Business Model Disruption”, Council on Foundations 2017 • Greater Miami Jewish Federation, Foundation of Jewish Philanthropies, 2005 Report of the Long Range Planning committee • Chronicle on Philanthropy article on donor advised fund growth, 2015 • FSG reports on community foundation models
  121. 121. References (2) • Columbus survey results 2016 • Four community foundation operating model charts • Charitable solutions LLC, Bryan Clontz • “The Givers: Wealth, Power, and Philanthropy in a new Gilded Age, David Callahan”, founder of Inside Philanthropy website

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