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Kaye M. Ridolfi Ginger F. Mlakar Kristin Warzocha

Organizational Endowments: Recruiting Agency Endowments, Pitfalls, and Approach Sunday, October 19, 2014. Kaye M. Ridolfi Ginger F. Mlakar Kristin Warzocha

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Kaye M. Ridolfi Ginger F. Mlakar Kristin Warzocha

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  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 FoundationThe 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. 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 3

  4. Establishing an Organizational Fund Seed Money Agreement Partnership 6

  5. Fund Growth Fund Growth Investment Growth Additional Contributions Distribution Seed Money 5

  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 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

  9. 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

  10. Benefits to an OrganizationFinancial Stewardship

  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 organizationmeeting 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 varietyof assets. • *offer maximum tax advantage. • *preserve donor intent even when community needs and organizations change. • *known forprudent 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

  13. Organizational Partner PerspectiveGreater Cleveland Food Bank

  14. 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

  15. Organizational Partner PerspectiveGreater Cleveland Food Bank Why we affiliate with the Cleveland Foundation: • Financial management expertise and guidance • Planned giving and marketing services • Reputation

  16. 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)

  17. 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)

  18. Questions?

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